Pan-European trading venue Spectrum Markets has announced today the listing of 1,757 exchange traded funds (ETFs) for trading.

Spectrum is seeking to capitalise on the rise in popularity of ETFs and its extended trading hours to enable brokers to facilitate intraday trading for their retail investors to expand its portfolio of available products.

"The launch of ETFs is part of our plan to build out our product offering to go along with the proposition on the exchange side and take our offering into the mainstream," Nicky Maan (pictured), chief executive at Spectrum, told SRP. "Following on from that, we'll start work on our equities offering."

The addition of ETFs to the Spectrum trading venue is a big step for the trading venue, because it complements its short-term focused turbo warrants all the way through the ETP range.

Major market-maker in Germany, ICF BANK AG, a German securities trading bank, will provide liquidity for ETFs on Spectrum. According to Maan, ICF BANK AG was chosen for its quality of execution, uptime presence in the order book, and pricing quality.

"Having a reputable market maker like ICF BANK AG will provide the liquidity these products need, and we expect it to have an impact in terms of onboarding and volume in the medium term," he said.

Our main USPs remain the 24-hour trading and the focus on retail - Nicky Maan

ETFs from more than 30 global fund providers will be available for trading on Spectrum, including BNP Paribas, Goldman Sachs, Fidelity, Franklin Templeton, HSBC, iShares, JP Morgan, Legal & General, Pimco, State Street, UBS, Vanguard, or WisdomTree, during extended trading hours.

“ETFs are one of the most exciting product classes right now," said Maan. "This marks a significant milestone for brokers and retail investors throughout Europe, as they can now access a diverse range of ETFs from some of the most recognised providers through Spectrum."

Commenting on recent activity, Maan noted that from a general macro market point of view 2024, has not been the most volatile year yet it has been a consistent first half of the year for Spectrum with 30% to 35% of its trading flow being out of hours "which validates our philosophy".

"This activity also indicates that the retail market has appetite for it and that demand has remained consistent over a number of periods across the different products and providers," said Maan. "Our main USPs remain the 24-hour trading and the focus on retail."

Trading activity

Looking at the trading activity on the Spectrum hub, most of the trades are focused on indices "as they provide a macro point to invest".

"It's always been our strongest underlying market and we expect an even greater focus as we go into tracker funds and ETFs," said Maan, adding that commodities "have also been very popular, particularly in the last few months especially gold which had nearly a 20-25% increase price".

Year-to-date, Spectrum has reported one million trades with a turnover of €1.3 billion and 35% of out of hours trading. From an asset class perspective, 77.8% related to indices, 10.6% to commodities, 3.6% to FX, 4.5% to single equities, and 3.5% to cryptocurrencies. The most traded underlyings were the DAX (29.2%), Nasdaq (23.2%) and Dow (10.7%).

"Going forward with the political dynamics - US/UK elections - there could be some market volatility, but I think everybody is factored in that there will be some volatility compared to other elections," said Maan. "A bigger point will be the slow unwinding of interest rates, that will have a greater impact on the financial markets and will play through into some of the underlyings that are traded."

"With an increasing appetite for liquidity pools across Europe, we look forward to continuing our partnership with Spectrum and expand our business beyond Germany and enter into the wider European markets in the near future," concluded Lars Lautenschläger (right), managing director at ICF BANK AG.