In terms of the volume of trading, Lyxor
says that there was a minor fall during the first half of 2008 on various European stock exchanges. The European ETF market experienced a revival of activity from July (22 per cent higher than in June) and a surge from September with volumes 38 per cent higher than the same month in 2007.
Lyxor believes that investors were attracted to ETFs
throughout 2008 because of their cost efficiency, transparency, high liquidity and intra-day trading.
"Investors have been increasingly selecting index-tracking investments because the correlation between asset classes and their overall volatility are at high levels, making stock-picking extremely difficult. Those parties wishing to invest are buying whole markets and ETFs provide the most cost-efficient and convenient way to do so," the firm says.