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BATS Looks to be Dominant ETF Exchange


Most exchange traded products in the U.S. trade on the New York Stock Exchange or the or the Nasdaq Global Market. That is not stopping Kansas City-based BATS Global Markets from the ambitious goal of being the largest U.S. ETF listing venue in three to five years.

“There was a total of 1,411 U.S.-domiciled ETFs at the end of 2014, according to the Investment Company Institute, with more than 1,000 listed by Intercontinental Exchange’s NYSE unit and the balance by Nasdaq OMX Group,” report John McCrank and Jessica Toonkel for Reuters.

BATS entered the ETF listing business in January 2012 with the launch of the iShares MSCI Norway Capped ETF (ENOR) . ENOR’s BATS debut was followed by several other single-country offerings from iShares, including the iShares MSCI Denmark Capped ETF (EDEN) , iShares MSCI Canada Small Cap Index Fund (EWCS) and the iShares MSCI Finland Capped ETF (EFNL). [BATS Lures ETF Issuers]

Today, ETFs from iShares, a unit of BlackRock and the world’s largest ETF issuer, account for 21 of the 31 BATS-listed ETFs.

However, BATS has attracted some listings from other well-known ETF providers in addition to being the listing venue of choice for providers behind several new ETFs. For example, ProShares lists seven ETFs on BATS, including the ProShares Investment Grade-Interest Rate Hedged ETF (IGHG) and the ProShares High Yield Interest Rate Hedged ETF (HYHG) .

New additions to the BATS ETF lineup include the KraneShares FTSE Emerging Markets Plus ETF (KEMP) , which debuted last month. The ValueShares U.S. Quantitative Value ETF (QVAL) and the recently launched ValueShares International Quantitative Value ETF (IVAL) , both courtesy of Dr. Wesley Gray’s ValueShares, also opted to list on BATS. [Tapping Into Undervalued Stocks]

“BATS is now the top U.S. exchange for ETF trading volume” and the exchange “gives cash rewards to market makers that put up their own capital to provide tight bid and ask spreads, so that others can get their trades done more easily at better prices,” according to Reuters.

Some ETFs listed on BATS have achieved impressive asset growth. For example, the iShares Short Maturity Bond ETF (NEAR) has over $631 million in assets while the iShares MSCI India ET (BATS: INDA ) has $3.3 billion.

iShares MSCI India ETF


ETF Trends editorial team contributed to this post.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.