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Bloomberg Tradebook ETF RFQ service sees volumes triple

First Published 13th May 2016

Bloomberg Tradebook's ETF RFQ service sees volumes triple as demand for block liquidity grows - Total notional value traded also triples in European ETFs.

New York - Bloomberg Tradebook has announced that trade volume on its ETF RFQ (Request for Quote) service tripled compared to the same quarter in 2015. Total notional value traded also tripled in European ETFs as the number of investors actively using the ETF RFQ service grew by more than 50 percent.

Market volatility and the demand for block liquidity in ETFs drove the value of the total ETF market to new highs, industry analysts report. According to research firm ETFGI, assets in global ETFs topped $3 trillion at the end of 2015.

Bloomberg Tradebook's ETF RFQ service enables traders to anonymously source block liquidity on ETFs from liquidity providers in the United States and Europe. Since its launch in 2014, more than 250 firms across the United States and Europe are using Bloomberg Tradebook's ETF RFQ service to source liquidity in more than 1,000 unique ETFs.

Access to liquidity and trading volume are important considerations for ETF investors. "Institutions are finding new and increasingly strategic applications for ETFs, with 77 percent of them using ETFs to obtain Core Exposures," said Andrew McCullum, Greenwich Associates Consultant and author of Institutional Investment in ETFs: Versatility Fuels Growth. "Additionally, when selecting an ETF to trade, 76 percent consider liquidity and trading volume the most important factor."

"Bloomberg Tradebook developed its ETF RFQ service to address the unique challenges facing ETF investors in the United Statesand Europe, while also meeting client demand for direct access to liquidity in a greater variety of ETF products," said Kiran Pingali, Head of ETF Product Development at Bloomberg Tradebook. "In the United States, liquidity is concentrated in the top 150 ETFs by AUM, with more than 90 percent of them trading less than a million shares per day. Europe faces its own challenges in sourcing ETF liquidity because of market fragmentation and low transparency due to deficiencies in trade reporting," Pingali concluded.

Bloomberg Tradebook developed and launched the ETF RFQ service in October 2014 to allow institutional clients to trade blocks of ETFs with minimal market impact. The service anonymously sources block liquidity from multiple providers with full depth and transparency, all within 60 seconds. The service gives institutional investors a clearer picture of the ETF marketplace, as well as best execution opportunities. Audit trails also provide full transparency around order routing decisions.