London’s ETF market generated turnover of £185.4bn last year, up from £3.9bn in 2004, according to figures from the London Stock Exchange.
“The growth of ETFs over the last 15 years has been extraordinary, radically transforming investment strategy and placing increased focus on passive management,” boss of the FTSE Group Mark Makepeace said.
The first ETF to trade in London – the iShares Core FTSE 100 Ucits ETF – was launched by Barclays on 27 April 2000. There are now 791 ETFs listed on the London Stock Exchange, which is the largest trading platform in Europe with 33.4 per cent of market share.
Barclays’ fund management arm, Barclays Global Investors, created the ETF by drawing on the growth of similar products in the US. It launched about 40 ETFs in 2000 under the iShares brand, which was later sold to US manager BlackRock. “ETFs are one of the success stories of 21st century investing in Europe,” said BlackRock’s head of Europe, Middle East and Africa iShares Rachel Lord.
ETFs, which are baskets of stocks and bonds traded on a market like a share, have soared in popularity in recent years with 2014 seeing inflows of €77bn (£55bn) – triple the amount in 2013.
EXCHANGE TRADED FUNDS
■ European ETF assets now total £330bn and have grown 10 times since 2005.
■ There were £24bn worth of trades on the London Stock Exchange last month.
■ Just 7.8 per cent of ETFs listed in London track FTSE indices.
■ The first ETF in Europe listed on the Deutsche Boerse on 11 April 2000.
■ The first equity ETF to list in London is now the biggest – it is worth £3.7bn.