GLOBAL - Several US exchange traded funds (ETFs) providers are considering listing their products in Europe, due to a more flexible regulatory environment, a ETFs expert has claimed.
"The abolition of stamp duty in the UK was a turning point, which changed the perception on this kind of financial product."
Looking at the different markets in Europe, Poletto pointed out that while the UK was a market mainly driven by institutional investors, the Italian market was a combination of institutional and retail investors [the London Stock Exchange and Borsa Italiana merged in 2007].
He also said: "I believe there is a potential for growth in both markets, with London growing on the retail side of the business and Milan growing on the institutional side of the business.
Germany, with an ETF turnover of €110.8bn, was the largest European market, but, he explained, almost only driven by institutional investors.
Poletto concluded the new frontier for the business proposition of the LSEG was Eastern Europe and China.
Speaking at the same conference, EleanorHope-Bell, head of wealth management at iShares, warned investors they should fully understand and question providers on their securities lending policy.
She explained: "Securities lending can offset some costs related to ETFs investment. However, it is important investors understand the counterparty risk involved and how the provider manages the collateral offered by the counterparty in the lending transaction and the nature of such collateral."
Deborah Fuhr, global head of ETF research and implementation strategy, Barclays Global Investors (BGI), told delegates the European ETF market was growing faster than the in US, largely due to the activity of institutional investors.
She also emphasised the characteristics of this product were suitable for the needs of both retail and institutional investors, but also active and passive investors.
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