European ETF trading commentary for the week ending 18 September 2009, provided by LaBranche Structured Products Europe (LSPE).

The market rose 3% last week and LSPE saw buyers outweigh sellers by 3:1. Our creation/redemption ratio was 10:1 with net inflows exceeding €100 million.

The focus was back on high yield and inflation-linked bonds such as the iShares Euro Corporate Bond ETF (LSE: IBCX), Lyxor ETF Euro Corporate Bond (NYSE Euronext: CRP) and iShares Euro Inflation Linked Bond ETF (LSE: IBCI), which were our largest creations by far. We continued to see large sellers of China ETFs, which accounted for the majority of redemptions. We saw substantial buyers of broad Eurozone and USA ETFs such as the iShares S&P 500 Index Fund (LSE: IUSA) and the iShares DJ Stoxx 600 DE ETF (Deutsche Borse: SXXPIEX).

The rush into global (developed) property markets has slowed down but we still saw strong daily investments in ETFs such as the iShares FTSE EPRA/NAREIT Developed Markets Property Yield Fund (LSE: IDWP).

In terms of sectors, we saw substantial sellers in banks following a 4% gain during the week – possibly profit taking, although investment banks still hold strong buy recommendations – and we witnessed buyers in the auto and insurance sectors.

Finally, nickel remained under pressure (as it has been since the peaks of mid-August).

Please bear in mind that the Tokyo Stock Exchange is now closed for 3 days. This will affect all Japan ETFs as market makers will not be able to create until Thursday. South Africa will then be closed on Thursday.

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.