Growth in ETF trading

Investors are making the most of market volatility by trading ETFs, according to Barclays Stockbrokers. Trading activity in ETFs through Barclays Stockbrokers has increased significantly over the past three months, with October 2008 experiencing the highest volume of trades for the year to date. September volumes increased 91.5 per cent on August, followed by October up a further 92 per cent on September volumes; in total Barclays Stockbrokers has seen August to October volumes increase by 268 per cent.

The iShares FTSE 100 was the most traded ETF during August, September and October, by a considerable margin. It represented almost half (44 per cent) of all trades over the period, with iShares S&P 500 taking second spot with 9 per cent of trades. Developed Equity is the most popular sector for client purchases over the period, while Emerging Equity and Government Bonds are also proving popular.

The majority of Barclays Stockbrokers clients are using ETFs for diversified market exposure at a low cost, however there is a trend emerging of clients trading ETFs frequently to capitalise on market conditions. Some clients have traded more than 100 times in the three month period Aug-Oct with a number of clients trading intra-day predominantly in the iShares FTSE 100.

Barbara-Ann King, Head of Proposition at Barclays Stockbrokers, comments: "Market volatility has continued to dominate the headlines so it's encouraging to see investors capitalising on these movements to get the best returns. We have seen a significant increase in ETF trading activity over the past three months with purchases peaking on Friday 10 October when market volatility was at its height, this also shows how comfortable our clients are in trading ETFs in these market conditions.

"If investors are looking for the portfolio diversification of a fund with the liquidity of a share then trading ETFs through iShares presents the ideal solution - we have seen some particularly active clients trade more than one hundred times over the three month period. While traditionally investors have bought and held iShares over a long period of time, increasingly we have seen clients displaying sophisticated trading techniques through buying and then selling within days to capitalise on short term movements in the markets."