Bloomberg Tradebook’s ETF Volumes Explode as Liquidity Demand Grows

The Tradebook ETF RFQ service managed to triple its volumes during Q1 2016.

Bloomberg Tradebook, the company’s global agency brokerage business, has disclosed its volumes for its exchange-traded-fund (ETF) Request for Quote (RFQ) service, which secured a sizable advance YoY, according to a Bloomberg statement.

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Bloomberg Tradebook’s ETF RFQ service caters to institutional traders, which helps anonymously source block liquidity on ETFs from liquidity providers across the US and Europe. After launching over two years ago, Bloomberg has managed to extend its services to over 250 firms.

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One of the stimuli behind the growth in this sector was the increase in ETF trading in the US throughout 2016. During Q1 2016, ETF assets climbed by 2.4% QoQ to $2.3 trillion in the US, which was fueled by retail channels, as calculated by Broadridge’s Fund Distribution Intelligence. In parallel to this trend, market volatility and the demand for block liquidity in ETFs also drove the value of the total ETF market to new highs over the same period.

In particular, its recent volumes have undergone a three-fold increase YoY in Q1 2016, relative to Q1 2015. In addition, Bloomberg Tradebook’s total notional value traded also tripled in terms of European ETFs, fueled in large part by the number of investors utilizing the ETF RFQ service growing – users of the service also swelled by over 50% YoY in Q1 2016.

kiran
Kiran Pingali, Head of ETF Product Development, Bloomberg Tradebook

According to Kiran Pingali, Head of ETF Product Development at Bloomberg Tradebook, in a recent statement on the business’ performance: “Bloomberg Tradebook developed its ETF RFQ service to address the unique challenges facing ETF investors in the United States and Europe, while also meeting client demand for direct access to liquidity in a greater variety of ETF products.”

“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,” he added.

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