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ETF Growth Abroad Outpaces Americas’

Global market volatility is helping to drive growth in ETF listings and turnover, says a World Federation of Exchanges report.

Although exchange-traded fund listings and turnover volume grew significantly in 2011, the fastest growth has occurred outside the Western Hemisphere, according to a recent report. The authors suggest market volatility may have something to do with this.

ETF listings in the Americas grew by 24 percent to 2,269, up from 1,806 in 2010, according to recently released 2011 market highlights from The World Federation of Exchanges, a trade association comprising 54 publicly regulated stock, futures and options exchanges. 

But the WFE report also found that U.S. turnover grew a mere 4.8 percent last year, from $8.6 trillion to $9 trillion. To be sure, this still represents approximately 87 percent of global turnover value; however turnover in the Asia Pacific region grew from $263 billion in 2010 to $335 billion last year, an increase of 27.4 percent.

Turnover growth in Europe, Africa and the Middle East was even stronger, rising from a total of $753 billion in 2010 to $996 billion last year, a 32.3 percent increase.

“The Americas region is still largely dominating this segment, but the two other regions are continuing to catch up with higher growth rates,” the report observes.

The WFE regarded the overall growth in ETF listings and turnover as a by-product of the same volatility that led to an increase in derivatives volumes, as the report notes “hedging needs were probably driven upward by volatility.” The WFE also noted that “the relative preference for indices or ETFs underlyings compared to single stocks could also be interpreted similarly.”

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