ETFS mulls fixed income ETF launch

Mark Weeks, incoming chief executive of the firm's new ETF Exchange, which will feature only ETFS's products and associated white-labelled versions, said the platform would probably feature equity ETFs to begin with, followed potentially by fixed income ETFs and ETCs.

He said the new exchange would be a joint venture between ETFS and six banks, three of which would be announced by the end of the month and three within the next three months.

The chief executive pointed out that, unlike many ETF providers, ETFS is not a subsidiary of a bank, so the six banks would feel more comfortable giving business to its ETFs than to a rival's.

He added the firm's smaller size and entrepreneurial culture was attractive compared with the large brokers, where he said "the bureaucratic nature of decision-making only got worse after the Lehman default".

Despite this, the firm faces increased competition from larger players in the industry.

The market for ETFs is also growing following disillusionment with active management, raising the chances large institutions may invest heavily in their own exchange-traded products.

Through its launch into the UK, Vanguard Group has increased its presence in Europe, where the ETF Exchange will initially operate.

IShares may also be able to leverage increased economies of scale following the mega-merger of its parent company Barclays Global Investors with BlackRock.