Deutsche Borse claims is XTF segment is now the “leading” marketplace for exchange-traded funds (ETFs).
“The XTF segment presently boasts 68 index funds, the largest range of ETFs offered by any exchange in Europe,” says Rainer Riess, Managing Director of Stock Market Business Development at Deutsche Borse, and responsible for the XTF segment. “In the first quarter of 2005, XTF generated with more than EURO 11 billion the highest quarterly turnover since the introduction of the segment. This means that more than 55 per cent of all ETF-turnover in Europe was generated in the XTF segment.”
Five new ETFs, the first to be based on the benchmark share indices DivDAX, Dow Jones STOXXSM 600 , Dow Jones STOXXSM 200 Small, Dow Jones STOXXSM 200 Mid, and Dow Jones STOXXSM 200 Large, started trading on Monday.
INDEXCHANGE Investment AG is the issuer of the funds, and Bayerische Hypo- und Vereinsbank designated sponsor.
Trading volume at XTF in March 2005 was €3.73 billion, bringing total turnover for Q1 to €11.04 billion. This represents a 12 percent increase year-on-year (Q1 2004: €9.87 billion).
Fund assets under management in the XTF segment reached a record high of €16.4 billion at the close of 2004, which is a 66 per cent increase over 2003 (€9.9 billion). At the end of March 2005, fund assets under management already totaled €18.4 billion.
The XTF segment was launched on 11 April 2000. The world’s first ETFs based on the European share indices Dow Jones STOXX 50SM and Dow Jones Euro STOXX 50SM were listed in the XTF segment. ETFs based on German indices such as the DAX and MDAX followed at the beginning of 2001. With the introduction of the eb.rexx Government GermanyEX from Indexchange and iBoxx € Liquid Corporates from iShares Europe?s first bond ETFs started in 2003. Further ETFs on German and international equity and bond indices were followed, in December 2004, by Indexchange’s eb.rexx Jumbo PfandbriefeEX in the XTF segment. XTF also offers ETFs on US equity indices, a section further expanded in January of this year with the inclusion of NASDAQ-100 European Tracker (EQQQ SM). With the iShares FTSE/Xinhua China 25, available since February 2005, the first ETF on a Chinese index can also be traded in Germany.
Deutsche Borse further enlarged its range of products in January 2005 with the introduction of a second DAX-based ETF, Deutsche Bank DAX DVG, offering investors an additional investment option for direct participation in the performance of the German bluechip index. DAXEX, the first DAX-based ETF, has been among the highest-turnover products on Xetra since its launch in 2001, and has therefore played a vital role in the Europe-wide success of the XTF segment. The two DAX products are presently the most liquid instruments being traded on Xetra.
Deutsche Borse says exchange-traded funds have established themselves as products of choice for private investors, who account for about half of all ETF orders. When the segment was introduced, private investors made up only 15 percent. “The principal benefit for private investors trading in ETFs on Xetra is the flexibility of exchange trading as well as the low costs, due to the absence of any front-end load and the high liquidity of the products,” explains a spokesman for Deutsche Borse. “The high level of liquidity owes mainly to the large group of participating institutional investors and international designated sponsors, who contribute liquidity to XTF on an ongoing basis.”