European ETF trading commentary for the week ending 6 November 2009, provided by LaBranche Structured Products Europe (LSPE).

Last week LSPE saw buyers outweigh sellers by 13:3 in the secondary market although we had flat net inflows (creations minus redemptions) due to some large redemptions in emerging market funds. The focus was again on property ETFs with investors continuing to accumulate UK property stocks.

We also witnessed some very large investments in Latin America ETFs such as the iShares MSCI Latin America ETF (LSE: LTAM) and Lyxor ETF MSCI EM Latin America (LSE: LLAT and NYSE Euronext: LTM). Interestingly, Mexican stocks fell for the first time in six sessions following investor concerns that prices had become too expensive in relation to expected earnings. Mexico has the second biggest weighting in the Latin America ETFs.

Meanwhile, the iShares MSCI Emerging Markets Index ETF (NYSE: EEM), a US emerging markets fund, saw over US$1 billion of redemptions following seven consecutive weeks of inflows and a solid 12.3% gain since early September.

We saw good two-way flows in sector products tracking the DJ Stoxx 600 Food and Beverage (SX3P) and Telecommunications (SXKP) indices, with strong creations and bullish research notes from banks. However, we traded large blocks of ETFs tracking the DJ Stoxx 600 Construction and Materials index (SXOP), with investors taking profit following a 5% rally in the sector the previous week.

US markets will be closed on Wednesday for Veterans Day, which will affect all US ETF products trading in Europe.

This report is not an offer to sell or a solicitation of any investment products or other financial product or service, an official confirmation of any transaction, or an official statement of LSPE.