European ETF trading commentary for the week ending 2 October 2009, provided by LaBranche Structured Products Europe (LSPE).

The equity market fell some 2.5% last week and we saw sellers outweigh buyers by 3:1. However, we recorded positive net inflows (creations minus redemptions) of a modest €100 million. LSPE also helped break volume records in the ETFS Natural Gas ETC (LSE: NGAS), in which 73.8 million shares were traded on Friday.

LSPE witnessed large sellers in funds tracking the MSCI Europe index such as the iShares MSCI Europe ex-UK ETF (LSE: IEUX), which fell 5% last week, and the iShares MSCI Europe (LSE: IMEU), down 3.5%. Our largest creations were in the iShares FTSE BRIC 50 ETF (LSE: BRIC), which was up 1% last week, and the iShares MSCI AC Far East ex-Japan (LSE: IFFF), which nevertheless fell 2%.

The iShares MSCI World (LSE: IWRD) and iShares MSCI Emerging Markets ETF (LSE: IEEM) were still in heavy demand and we sold decent blocks of these funds to institutional investors. iShares’ US MSCI Emerging Markets ETF (NYSE: EEM) also continued to enjoy strong creation volumes with another US$380 million injection (following US$1 billion the previous week). The db x-trackers MSCI Emerging Markets ETF (Deutsche Borse: XMEM) saw large creations with net inflows of more than US$450 million (LSPE executed large two-way OTC trades in it with European investors).

In terms of sectors, investors took profits in ETFs tracking the DJ Stoxx 600 Banks index (SX7P). We also saw large sellers of ETFs tracking the DJ Stoxx 600 Oil & Gas index (SXEP), other oil ETPs and funds tracking Brazil. This sell off was possibly due to profit taking after oil hit a high of US$72.

Finally, there wasn’t much appetite for interest rate products and we saw sellers in ETFs tracking TIPS, although Dutch pension funds bought decent amounts of the iShares Barclays Euro Corporate Bond ETF (LSE: IEAC).  

Remember that the Tokyo Stock Exchange will be closed next Monday, which will have an impact on all Japan ETFs.

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.