Growth in ETF Trading as Retail Investors Capitalise on Market Volatility
Investors are making the most of market volatility by trading exchange-traded funds (ETFs), according to Barclays Stockbrokers. Trading activity in ETFs through Barclays Stockbrokers has increased significantly over the past three months, with October 2008 experiencing the highest volume of trades for the year to date. September volumes increased 91.5% on August, followed by October up a further 92% on September volumes; in total Barclays Stockbrokers has seen August to October volumes increase by 268%.
The iShares FTSE 100 was the most traded ETF during August, September and October, by a considerable margin. It represented almost half (44%) of all trades over the period, with iShares S&P 500 taking second spot with 9% of trades. Developed equity is the most popular sector for client purchases over the period, while emerging equity and government bonds are also proving popular.
The majority of Barclays Stockbrokers clients are using ETFs for diversified market exposure at a low cost, however there is a trend emerging of clients trading ETFs frequently to capitalise on market conditions. Some clients have traded more than 100 times in the three month period August-October, with a number of clients trading intra-day predominantly in the iShares FTSE 100.