European ETF trading commentary for the week ending 16 October 2009, provided by LaBranche Structured Products Europe (LSPE).

LSPE enjoyed another strong week of inflows and we created ETF shares with all providers. We had a solid 7:1 creation/redemption ratio and buyers outweighed sellers by 10:1. Although there was a lot less demand for bond and index-linked ETFs than in previous weeks, overall we saw a record level of creations.

The emphasis last week was again on ETFs tracking liquid equity indices such as the DJ Euro Stoxx 50. There was also interest in the Lyxor ETF MSCI EMU (NYSE Euronext: MFE), broad Euro Stoxx index ETFs such as the iShares DJ Euro Stoxx DE (Deutsche Borse: SXXEEX) and small cap funds such as the iShares DJ Euro Stoxx SmallCap ETF (LSE: DJSC).

We saw strong inflows into ETFs tracking the DJ Stoxx 600 Personal and Household Goods (SXQP) and DJ Stoxx 600 Construction and Materials (SXOP) indices but large sellers in funds tracking the DJ Stoxx 600 Banks (SX7P) and DJ Stoxx 600 Industrial Goods and Services (SXNP) indices.

We also redeemed a substantial amount of ETF Securities’ industrial metals ETCs (such as those tracking aluminium, zinc and copper), with possible profit taking over the last couple of weeks.

Finally, we had large two-way flows in ETFs tracking emerging markets and Turkey. The iShares MSCI Emerging Markets Index ETF (NYSE: EEM) remains the largest of these funds by far with over US$400 million in creations last week.

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.