Unique geographies lead to exchange growth
Euronext | Best European Exchange for Listing ETFs - Silvia Bosoni, Group Head of ETFs, Euronext believes that its offering is unique, covering seven pan-European economies, now including Borsa Italiana in Milan.
“Our goal is to supply services to all ETF issuers, to the liquidity providers and the buyside in all our geographies in a standardised manner,” Bosoni says.
“I believe that Euronext won this award because ETP issuers appreciate the efficiency of our markets and the exposure we can give to their products, and for this reason they are increasing the offer on our markets. In 2021 we were able to list 765 ETPs and welcome 18 new ETP providers”
Last year’s turnover on Euronext was EUR221 billion. The offer of listed ETPs at the end of 2021 was made up of 1,482 products in Italy and 1,333 in Paris and Amsterdam.
A number of trends has dominated new listings, with ESG and sustainability being the most prevalent.
“209 ESG ETPs were listed last year, nearly double what we did the previous year,” Bosoni says. “Almost all ETP issuers have increased their range of ESG products, emphasizing the fact that many companies are expanding their offers of sustainable exposures due to the high interest that both institutional and retail investors have on this topic.”
She also notes that thematic exposure keeps growing, with ETPs based on a wide range of trends such as exposure to energy innovation, blockchain, technological evolution and products and services targeting the ageing population and millennials.
Cryptocurrencies are another growing trend, with 60 cryptocurrency ETPs listed over 2021. These products, listed in Paris and Amsterdam, were particularly popular with retail investors.
Single stock short and leveraged ETPs are also appreciated by retail investors looking for more volatility. Retail investors are important on the Italian market, in terms of volume, on overall products invested in by retail investors, they represent about 21 per cent, while in Paris this number is 14 per cent but steadily growing in the last two years.
Looking forward, Bosoni believes that the increasing interest in commodities exposure will inevitably make ETPs in this sector more widely adopted and will also likely happen with products that capture the spike in inflation and its subsequent volatility.
“From an industry point of view, it is clear that ESG has become a crucial component for every type of investment, influencing all products that are offered. One area that has huge potential is fixed income ETFs, which until now the ESG development has mainly been concentrated in the equity space.”
She believes that this thematic trend will also continue with increased granularity and customisation to reflect the appetite from investors.
Considering the European regulatory outlook, she also considers that the ongoing MiFID II review might have a relevant impact in shaping European markets in the next few years, while financial products will be modelled by the implementation of the Sustainable Finance Disclosure Regulation (SFDR).
“From an exchange point of view, our aim is to continue to provide a marketplace where ETP issuers can offer the widest range of products, and investors can find the perfect match to their needs in a fair and efficient trading environment” Bosoni says.