Growth in ETF trading as investors' confidence remains high

The popularity of ETFs (Exchange Traded Funds) continues to grow, according to Barclays Stockbrokers, with May seeing assets held in ETFs at the highest levels recorded - having increased 96% since September 2008. April and May also saw investors taking advantage of market movements - adopting short term positions on the FTSE 100 and identifying opportunities in emerging markets.

The iShares FTSE 100 remained the most popular investment for Barclays Stockbrokers clients, accounting for just over a fifth of all purchases (23% in April and 18% in May). Investors are also continuing to seek income generating investments, with the iShares Sterling Corporate Bond the second most popular purchase for the fourth and fifth consecutive months, accounting for 10% and 11% of all ETF trades in April and May respectively.

Analysis also reveals that for the first time in 2009, investors' appetite to explore more diverse investments through opportunities identified in emerging markets is increasing - with four emerging markets ETFs in the top ten in May, accounting for 11% of all purchases in both April and May. These include the iShares FTSE Xinhua China 25, iShares, FTSE BRIC ‘50', iShares MSCI Brazil and iShares MSCI Emerging Markets.

Barbara-Ann King, Head of Investments at Barclays Stockbrokers, comments: "It is encouraging to see that our clients remain confident in using ETFs for their investment objectives across their varied investment strategies. Furthermore, it is clear some investors are beginning to diversify their portfolios and are seeking opportunities in areas where they are anticipating growth such as the emerging markets sector."

Barclays Stockbrokers found investors trading in ETFs are also continuing to take advantage of tax efficient benefits, with over 50% holding them within an ISA or SIPP wrapper.

Barbara-Ann King continued: "With the current tax year in full swing, it is positive to see savvy investors continuing to combine simple and transparent investments like ETFs with the tax benefits of holding them in their ISA or SIPP account."