IMF warns of concentration of liquidity providers in ETF market

Ireland holds 60% of European ETF AUM

The International Monetary Fund has warned that Irish ETFs, which make up the majority of European ETFs, should look towards using a greater range of liquidity providers.

The dominant player in the Irish ETF market is BlackRock, which controls 61% of ETF AUM in the country. However, just two liquidity providers make up to 90% of activity for certain ETFs from BlackRock. Ireland is the domicile for 60% of European ETFs by assets under management, with ETFs accounting for 23% of Irish fund AUM. The AUM of ETFs has more than doubled since 2017, totalling €878bn by 30 September 2021. The vast majority (97%) are passively managed, with 70% of ETF AUM in equities. For bond ETFs, the sector is split evenly between government and corporate debt. European ...