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20 years of ETF trading in Europe

Release date:
08 Apr 2020
| Deutsche Börse Cash Market

20 years of ETF trading in Europe

ETFs established as standardised products for private capital accumulation/The first products in Europe were listed on Xetra on 11 April 2000/Deutsche Börse factsheet shows development of ETF trading

Exchange Traded Funds, better known as ETFs, have seen increasing demand from investors for years due to the continuing trend towards passive investing. More and more private investors are now using ETFs, especially to build up long-term wealth. 11 April marks the 20th anniversary of the launch of the first two products in Europe.

It all began with two exchange-traded index funds by Merrill Lynch International, which were listed on Deutsche Börse’s Xetra market, enabling investors to participate in the performance of the EURO STOXX 50 and the STOXX Europe 50 indices. Today, more than 1,500 ETFs are listed on Xetra. With this selection and a monthly trading volume of €13 billion, Xetra is the leading one for ETFs in Europe.

"The breakthrough of ETFs was achieved thanks to the steadily growing demand for passive investments", explains Stephan Kraus, who is responsible for Deutsche Börse’s ETF segment. "More and more private investors are making use of the opportunity to track a wide range of markets, sectors, trends and strategies with ETFs." The share of private investors on Xetra, measured by order size, is now around 8 percent – this has almost doubled in five years.

Within the various ETF categories, thematic ETFs are currently attracting a lot of interest. These offer investors targeted access to megatrends such as automation and robotics or cyber security. In addition, ETFs on sustainable investment strategies (ESG; environmental, social and governance) are also among the fastest-growing categories; one tenth of all tradable ETFs now focus on sustainability.

However, the greatest interest in ETFs continues to be in classic benchmark indices such as DAX, EURO STOXX 50 and S&P 500. In addition, investors focus on investments in broadly diversified European and global indices such as STOXX Europe 600 or MSCI World. They continue to serve as a basic tool for long-term investing and are popular indices for ETF savings plans.

“We assume that ETFs will continue to be the standard product for private capital accumulation,” explains Kraus. “The three letters E-T-F could also stand for easy, transparent and flexible. Together with a low cost base, these are key characteristics to convince more savers of the benefits of long-term investments via capital markets".

Costs have always been a high priority in ETF trading – even within the industry. Increasing competition and numerous new products – over 180 new ETFs were launched on Xetra in both 2018 and 2019 – have meant that the already comparatively low management fees for passive funds continue to fall steadily.

To help investors keep track of the growing ETF market, Deutsche Börse offers a comprehensive range of trainings and news services for both beginners and advanced investors alike, such as free online seminars and handbooks. In addition, Börse Frankfurt’s investor portal offers extensive reference and trading data that support investors in product selection and order entry.

Development of tradable products on Xetra since the year 2000

Further information:

To mark its 20th anniversary, Deutsche Börse published a factsheet on the development of ETF trading.

In addition, a series of topics on ETFs has been published in Deutsche Börse's online magazine "Insights" from April to July, highlighting various trends, new offerings and structural developments on the markets.