Exchange-traded products in Germany: development and substitution of exchange-traded funds, exchange-traded commodities and exchange-traded notes. - Publication - Bridge of Knowledge

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Exchange-traded products in Germany: development and substitution of exchange-traded funds, exchange-traded commodities and exchange-traded notes.

Abstract

Research background: Exchange-traded products (ETPs) are one of the most rapidly growing categories of financial products. Their fast development has been boosted by innovative features. Three main categories of ETPs are exchange-traded funds (ETFs), exchange-traded commodities (ETCs) and exchange-traded notes (ETNs). ETCs and ETNs remain least known, even though their number on some stock exchanges is high. In Europe, Germany is one of the largest and most active ETPs markets. ETCs and ETNs are debt instruments, in contrast with the most popular ETFs, which are equity securities. Therefore, they offer investors different advantages but also expose them to other types of risks. Purpose of the article: The key aim of the article is to present the features of ETPs and to provide in-depth insight into the issues linked with the development of ETPs market in Germany, with the special emphasis on the ETCs and ETNs. Methodology/methods: In the main empirical part of the article, German ETPs market is analyzed using descriptive statistics and technological substitution framework (employed for the analysis of innovations in order to evaluate the changing market shares of, first, ETFs versus ETCs and ETNs, as well as, second, ETFs versus other types of investment funds). The period of the analysis is 2010-2016 in the former case and 2007-2016 in the latter. Findings: Share of ETPs other than ETFs in the total market in Germany remains low. Even though market position of the leading products, i.e. ETFs, is still very strong, some substitution has been observed, especially after 2015. Predictions indicate that this trend will continue in the upcoming years. Results of the analysis of the investment funds’ market confirm the substitution between ETFs and tradi-tional investment funds over 2007-2017, in particular in the first years of this time period.

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Category:
Articles
Type:
artykuły w czasopismach recenzowanych i innych wydawnictwach ciągłych
Published in:
EQUILIBRIUM Quarterly Journal of Economics and Economic Policy no. 13, edition 4, pages 643 - 665,
ISSN: 1689-765X
Language:
English
Publication year:
2018
Bibliographic description:
Marszk A.: Exchange-traded products in Germany: development and substitution of exchange-traded funds, exchange-traded commodities and exchange-traded notes.// EQUILIBRIUM Quarterly Journal of Economics and Economic Policy. -Vol. 13., iss. 4 (2018), s.643-665
DOI:
Digital Object Identifier (open in new tab) 10.24136/eq.2018.031
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Gdańsk University of Technology

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