In the 2nd quarter of 2022, trading turnover in ETFs on SIX Swiss Exchange amounted to CHF 26.5 billion. It was thus down 24.4% on that of the first quarter, but up by a third compared to the same quarter of the previous year. The weak financial markets in the second quarter influenced trading on the ETF market only to a limited extent. Compared to the previous quarter, the number of trades fell by 22.5%. Compared to the same quarter of the previous year, however, there was an increase of 2.6%. These and more detailed statistics are available in the latest edition of the ETF Market Report.
Over 1,600 ETFs: More Options for Investors Than Ever Before
The number of ETFs listed on SIX Swiss Exchange increased by 40 in the second quarter to a total of 1,628 as of 30 June 2022. The threshold of 1,600 ETFs had been passed for the first time at the start of Q2/22, commented by Alain Picard, Head Products at SIX Swiss Exchange: “Every milestone we are reaching in our 21 year success story of ETFs on SIX Swiss Exchange is an opportunity for us to thank our issuers and our market makers. They make sure that investors have one of the biggest choices of ETFs and attractive trading conditions.” The main focus of the new listings again related to sustainability.
All asset classes except for the minor category of “other ETFs” increased their turnover in comparison to the previous year. Equities remained the most popular category with a 75.1% share of total turnover. Seven of the 20 most-traded ETFs posted increases in volume compared to the previous quarter. The best performance in CHF in the second quarter was achieved by the ETF LYSSL from Lyxor based on the SMI Daily Short Leverage (up 24.6%). The turnover ranking by issuer was again led by UBS in the second quarter. Its relative share increased by 3.0% to 49.8%.
Interview: Industry Outlook
In addition to detailed statistics on the ETF segment of SIX Swiss Exchange, the latest market report also includes an interview with Ron Heydenrijk, European Head of Sales & External Relations, Flow Traders. He talks about how the ETF trading landscape has evolved over the past years, what issues are currently shaping developments in the ETF sector and where he sees the ETF market in Switzerland in the near future.
Improving Execution and Lowering the Trading Cost for End Investors
Ron Heydenrijk also shares his view on the advantages of Quote on Demand (QOD), the Swiss stock exchange’s STP-supported RFQ-platform for trading ETFs and ETPs on exchange. For him, RFQ trading is a great way to trade blocks in ETFs, tapping into the full liquidity potential – so QOD improves the execution of ETF orders, lowering the total trading costs for the end investor: “The key difference between the QOD service of SIX Swiss Exchange and the large pan-European RFQ platforms is the fact that QOD is CCP cleared vs the bilateral clearing at the RFQ platforms. This lowers the total trading costs for the market maker, which in turn could result in lower spreads.”
Quote on Demand
Starting from this issue, the ETF Market Report will inform readers about developments in Quote on Demand (QOD). QOD offers institutional investors the opportunity to execute orders in a bidding process directly with the most important registered liquidity providers in Europe. QOD was launched in December 2020 and in 2022, its monthly turnover has risen continuously. In June, it reached its second-highest turnover after March at CHF 278 million. The average monthly turnover via QOD since the beginning of the year amounts to CHF 207 million, representing an increase of 1,782% compared to the average monthly turnover in the previous year. The number of trades came to 3,760, the highest level registered to date.