Citi added Exchange Traded Funds (ETFs) to the list of instruments it accepts as collateral in agency securities lending transactions. Using Markit’s IHS collateral lists to identify eligible ETF instruments – both in equity and fixed income- Citi uses its agency securities lending platform to help clients optimize collateral management by accessing a wider range of funds.
With over $4.9 trillion in global assets under management and witnessing over $630bn of inflows in 2017 alone1, the ETF market is still a relatively untapped source of collateral that can enable investors to access further liquidity and improve collateral efficiency, while minimizing counterparty risk through index diversification.
In the US, Citi was recently mandated by EntrepreneurShares to provide full ETF Services for its inaugural ETF fund. In 2018, Citi will launch an integrated fund administration for ETFs in Europe, following the successful buildout of its ETF Services business in the US, Latin America, and Asia.