Central bank interest rate policy divergence has become a reality, there have been increased levels of geopolitical risk due to rising tensions in the Middle East and political change has swept across Europe. With the financial landscape changing at pace, many of the recent themes impacting markets have also been seen in ETF securities lending activity, writes Seeking Alpha.
Additionally, there have been new developments in the US Presidential race and an increase in market volatility, which recently caused the Cboe Volatility Index (VIX) to register its largest intraday jump on record.
As uncertainty grows across both the political and financial spectrums, interest in ETFs within the securities lending market is expected to grow further.
“The growing use of ETFs to express investor sentiment and to hedge portfolio risk has been working to the benefit of ETF lenders, as securities lending revenues for both June and July 2024 have shown positive growth when compared on a year-on-year basis (June revenues +26%, July revenues +19%) – one of the only asset classes to do so,” according to Seeking Alpha.