On April 11, 2000, the first two exchange-traded funds (ETF) based on the EURO STOXX 50 and the STOXX Europe 50 were listed on Deutsche Börse in Germany. With this listing, Merrill Lynch International brought a product to Europe which had been established in the U.S. since 1993. In addition to Germany, the trading of ETFs also began in Sweden, Switzerland, and the U.K. over the course of the year 2000. Even as the first reactions to these new products were positive, no one at that time really expected the future success that ETFs would experience. The following is a

On April 11, 2000, the first two exchange-traded funds (ETFs) based on the EURO STOXX 50 and the STOXX Europe 50 were listed on Deutsche Boerse in Germany. With this listing, Merrill Lynch International brought a product to Europe which had been established in the U.S. since 1993. In addition to Germany, the trading of ETFs also began in Sweden, Switzerland, and the U.K. over the course of the year 2000. Even as the first reactions to these new products were positive, no one at that time really expected the future success that ETFs would experience. The following is a

On April 11, 2000, the first two exchange-traded funds (ETFs) based on the EURO STOXX 50 and the STOXX Europe 50 were listed on Deutsche Börse in Germany. With this listing, Merrill Lynch International brought a product to Europe which had been established in the U.S. since 1993. In addition to Germany, the trading of ETFs also began in Sweden, Switzerland, and the U.K. over the course of the year 2000. Even as the first reactions to these new products were positive, no one at that time really expected the future success that ETFs would experience. The following is a

Even as 2020 was a tough year, the European ETF industry seems to be in good shape as assets under management increased from €870.0 bn as of December 31, 2019 to €874.3 bn at the end of October 2020. An increase in assets under management of €4.3 bn (+0.50%) year to date might look small for a growth industry, but these developments were driven by the performance of the underlying markets (-€46.2 bn). Meanwhile, the industry enjoyed healthy estimated net sales of €50.5 bn. Graph 1: Assets Under Management in the European ETF Industry (in bn EUR) Source: Refinitiv Lipper

As the security markets further recovered from the lockdown-induced downturn caused by the onset of the coronavirus pandemic, June was another positive month for the European ETF industry. ETF promoters enjoyed inflows during the month. The combination of above average inflows and the positive performance of underlying markets led to an increase in assets under management from €798.5 bn as of May 31, 2020, to €830.0 bn at the end of June. The increase of €31.5 bn for June was driven by the performance of the underlying markets (+€17.8 bn), while the net inflows contributed €13.7 bn to the increase

Investors, market observers, and regulators always raise questions about the competitiveness of the European exchange-traded fund industry since the assets under management seem to be concentrated among a few ETF promoters. Generally speaking, I would agree with the statement that one needs to be concerned if a few players are dominating a market, but not with regard to the European ETF industry. The graph below depicts the fact that the European ETF industry is highly concentrated at the promoter level since the 10-top promoters in Europe held 93.22% of the overall assets under management (€725.2 bn) in the European ETF

After the announcement on July 3, 2018, of the takeover of the Commerzbank Equities Markets and Commodities (EMC) unit by Societe Generale, some market observers are speaking about possible further consolidation in the European ETF industry. There are also concerns that the concentration of the market is increasing further, since this takeover means that ComStage (the ETF promoter of Commerzbank) might now become integrated into Lyxor ETF (the ETF promoter of Societe Generale). But are these fears of increasing concentration actually justified, and is the European ETF industry really in a consolidation mode? At first look both assumptions seem to

A topic I hear discussed frequently is securities lending as a modern management technique to increase returns of mutual funds and ETFs. Even though I see some benefits for the markets in general and investors in specific, I think that securities lending is—under the current regulation regime—a management technique that should not be used for funds sold to retail investors. This opinion may lead to some raised eyebrows from industry participants who don’t see a risk for investors coming from securities lending. They would say that lending transactions are normally over-collateralized, and in many cases the possible shortfall risk is