THETRADETECH DAILY THE OFFICIAL NEWSPAPER OF TRADETECH 2018
Growth of the passive
Tom Digby , head of client trading coverage , capital markets , Invesco PowerShares , talks to TRADETech Daily about the rise of exchangetraded funds and offers his thoughts on this year ’ s TradeTech conference .
easier to understand . Around 20-30 % of ETF secondary market trading volume was visible pre-MIFID II via on-exchange trading . Now , with post-trade reporting requirements , we are seeing over-the-counter ( OTC ) volumes come to light whether via multilateral trading facilities ( MTF ), organised trading facilities underlying trading volumes .
What is driving the growth in passive investing and ETF instruments , and do you expect this growth to continue ? TD : ETFs are market access instruments . We live in an on-demand society which has been
“ With fees continuing to decrease across the ETF passive industry , trading ETFs efficiently becomes an increasingly significant component of any investor ’ s total cost of ownership .”
What does the European exchange-traded fund ( ETF ) landscape currently look like ? Tom Digby : The European ETF industry continues to see double digit growth year-on-year . In 2017 , assets under management ( AuM ) grew 40 % to reach $ 802 billion , making it a record year since 2009 . Whilst being a highly competitive industry amongst issuers this remains an exciting space to be in for all involved .
Furthermore , regulatory tailwinds are favouring ETFs as they aim to further increase transparency and to make investments
( OTF ) or reported to a trade reporting facility .
This means firms , with the help of an issuer ’ s Capital Markets team , can get a better sense of the true liquidity and trading cost of an ETF from the secondary market and the brought about by having technology at our fingertips . ETFs are as much an example of this as any . The easy-to-use nature of ETFs and the ability to express a market view instantaneously have drawn investors towards
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