European ETF turnover reaches record high

On-exchange turnover in the European ETF industry has reached an all-time high, fuelled by fluctuating markets and investor uncertainty, Lipper says.

Lipper's latest Pan-European ETF report shows the average monthly ETF turnover for Q2 was up 31.40% at €51.40bn, compared with €39.11bn in Q1.

This significant increase was largely driven by the new all-time high in on-exchange turnover that was reached in May.

The report says trading activity tends to highly correlate with market volatility. Rising volatility combined with an "unusually high" demand for ETFs from a range of investors therefore led to higher turnover numbers on the pan-European exchanges in Q2.

In June, the exchanges in Germany had the highest market share in terms of monthly turnover volume, at 30%, followed by the Euronext European exchanges with 19% and then the London Stock Exchange, with almost 18%.

In terms of assets under management (AUM), the European ETF market grew 1.79% to €183.24bn over Q2, which Lipper dubs a "surprising" inflow due to global stock market movements.

The report says emerging market and gold mining equities were the best performing equity ETFs over Q2, while the bond ETF segment has been boosted by currency movements and a flight to quality.