LSE Celebrates 10 Years Of ETFs
Tuesday, April 20, 2010

The London Stock Exchange has celebrated ten years of growth for Exchange Traded Funds (ETFs) listed on its markets.

A decade after iShares launched its product tracking the FTSE 100 index, there are now over 240 ETF products available for trading on the Exchange, from nine separate issuers.

An ETF is an investment company with shares which trade intraday on stock exchanges at market-determined prices. Investors can buy and sell them in the same way as they currently trade in equities on the LSE. First listed in the US in 1993, and in Europe in 2000, it is believed that there are now well over 2,000 ETFs being traded globally, worth almost USD1 trillion.

Trading activity in ETFs has seen constant year-on-year growth. There has been an average annual growth rate of 69% in the value of ETFs traded, and an average annual growth rate of 100% in the total number of trades.

The range of products available has diversified to include ETFs which track indices based on companies in emerging economies, cleantech and carbon neutral firms and businesses which are Shariah compliant.

Commenting on 10 years of ETFs, Rory Tobin, head of iShares International, said:

“This is a significant milestone in the history of ETFs in Europe.  ETFs have been characterised by simplicity, transparency, tradability and cost effectiveness, and have thus presented a very attractive value proposition for investors. The recent financial crisis has served to highlight these attributes even more.  After ten years, the conversation has certainly moved from 'what is an ETF?' to 'how do I use an ETF?' and even more recently to 'do you have an ETF on…?'.

"These are exciting times for ETFs in Europe and we look forward to working with investors and educating them as to the investment possibilities that can be realised through usage of ETFs.”

Donald Keith, Deputy Chief Executive at FTSE Group, added:

“The last decade has seen ETFs rapidly evolving to offer investors a range of exciting opportunities. At the same time, FTSE has continued to support ETF investment with incredible innovation and growth, increasing investor access and prospects for diversification. By combining our expertise with that of the world’s leading ETF providers, FTSE has opened up a host of robust approaches for ETFs, and we look forward to continuing this effort with the London Stock Exchange and our industry partners.”

Pietro Poletto, Head of ETFs and ETCs for London Stock Exchange Group, commented:

“Showing particular resilience during the volatility and uncertainty of the last two years, ETFs have represented one of the most notable success stories of the last decade. The London Stock Exchange has facilitated the strong, sustained growth of a new kind of trading for both institutional and retail investors.”