European ETF trading has increased its market share over traditional equity trading with volumes reaching €1.4trn in H1, according to a Bloomberg Intelligence report.
ETF trading increased 19% year on year to €1.4trn, tripling between 2018 and 2024, with trading predicted to grow 12-15% by year-end, the report said.
The increase in ETF trading has been tied to market volatility spikes after COVID-19 and the Ukraine war with investors drawn to products with greater diversification.
It added that since price swings have evened out, equity trading has remained stagnant and ETF trades have continued to gather pace.
The report also revealed that request-for-quote (RFQ) trading accounted for 46% of European ETF trading in 1H, reaching €673bn in the first half of 2024, up 12.5% versus the year earlier.
RFQ platforms being the dominant mechanism for trading is a trend that has extended from 2023, making up 53.5% of all ETF trades in Europe in 2023.
Lit order book transactions accounted for 25% of all European trading in H1, while bilateral ETF trades – which include over-the-counter, systematic internaliser and off-book and on-exchange trades – made up 29% of ETF trading volumes.
On-exchange trading still accounts for a small portion of trades, which has been tied to slower retail adoption.
Despite this, the retail market has continued to expand, with multiple ETF issuers recently announcing partnerships with neobrokers, including Scalable Capital announcing in July it is set to offer over 300 Amundi ETFs on its platform.
