Exchanges Try to Boost ETF Trading Volume, Liquidity

ETF Trends

Despite gathering more assets under management, ETFs have reportedly witnessed a dip in trading volume. As a way to rekindle investment interest within the ETF space, a new marketplace and new fund structure are in the works.

ETFs have gathered over $1.4 trillion in assets under management, but ETF daily volume declined 22.0% last year to 941,000 shares a day, reports Tom Steinert-Threlkeld for Traders Magazine.

“Investing in ETFs is continuing to increase. It’s just happening in places other than the secondary markets, like NYSE Arca or Nasdaq or BATS,” Laura Morrison, senior vice president for global indices and exchange-traded products at NYSE Euronext, said in the article. “It really is critical to us that volumes stay at the levels they are at,” or pick back up.

In an attempt to stoke interest in the ETF space, Nasdaq, NYSE and BATS have been providing market makers with incentives in less-liquid funds to create more volume.

Next page: New developments

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