Clearstream’s ETF Business Rises to All-Time High in May

ETF trading continued to rise in 2017, with Clearstream seeing a fresh high in ETF assets under custody.

Post-trade services provider Clearstream has reported its latest tranche of volumes detailing its assets under custody. Amongst the latest figures, the group’s custody business has shown a groundswell of demand for exchange-traded-funds (ETFs), which managed to rise to over $334.2 billion (€300.0 billion) in May 2017.

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European ETF trading has seen a large uptick in volumes this year, a trend that has also unfolded globally. Last year, ETF assets climbed to an all-time high of $2.6 trillion, up 18 percent year-over-year from $2.2 billion in 2015, as measured by Broadridge’s Fund Distribution Intelligence (FDI) tool.

ETF growth has largely been driven by an increase in third-party distribution channel sales from broker-dealers (B/D), registered investment advisors (RIAs), and banks. On Clearstream’s part, ETF assets under custody rose to a fresh high of $334.2 billion. Over the past year however, Clearstream’s custody business for European ETFs has also jumped by a factor of 25 percent, justifying a large increase in its market share in Europe.

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Philippe Seyll

The ETF sector as a whole has been one of the fastest growing over the previous twelve months, in light of the elimination of several technical challenges, improvements in issuance and settlement, and listings across multiple jurisdictions. Clearstream Banking Co-CEO Philippe Seyll commented: “Our system takes care of the complexity. It is low on cost and it is automated. This means that a French investor can buy into a German-listed ETF and sell it on the UK stock exchange seamlessly.”

May Overview

In terms of May 2017, the value of assets under custody held on behalf of customers registered at Clearstream was reported at $15.00 trillion (€13.45 trillion) – this constituted a year-over-year climb of 3.1 percent from $14.53 trillion (€13.04 trillion) in May 2016. Additionally, securities held under custody in Clearstream’s international business as an international central securities depository (ICSD) declined marginally by 1.5 percent on a year-over-year basis to $7.5 trillion (€6.70 trillion) in May 2017, relative to (€6.80 trillion) in May 2016.

Securities held under custody in the German central securities depository (CSD) trended lower in May 2017, edging higher to $5.08 trillion (€4.56 trillion), or 3.9 percent year-over-year from $4.90 trillion (€4.39 trillion) in May 2016.

Clearstream’s Global Securities Financing (GSF) services disclosed a reading of $503.2 billion (€451.5 billion) in May 2017, or 13.6 percent lower on a yearly basis from $582.5 billion (€522.8 billion) in May 2016. Finally, Clearstream’s Investment Fund Services (IFS) processed 2.0 million transactions during the month ending May 2017, which reflected a rise of 42.9 percent year-over-year from 1.4 million transactions in May 2016.

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