INTRODUCTION
The second quarter of 2021 saw as much trading as the first, as insurance companies continued to trade ETFs actively. While trading volume was lower relative to 2020, insurance companies traded in the first half of the year almost as much as they held in their portfolios at the beginning of the year. In this report, we analyze these trades and explore the differences between the two quarters.
ETF TRADES
In the first quarter of 2021, insurance companies traded USD 15 billion in ETFs. In the second quarter, insurance companies increased this amount slightly to USD 16 billion. In the first half of the year, insurance companies traded USD 31 billion in ETFs. The amount of trading was slightly lower than for the same period in 2020, when companies traded USD 38 billion. However, the COVID-19 crisis affected the trading volume in 2020.
As seen before, trading volume isn’t uniform over the period. Insurance companies traded more at the end of each quarter, with irregular spikes during the middle of the quarters (see Exhibit 1).
In terms of asset classes, the trading pattern was markedly different between the first and second quarters. In the first quarter, the trades were roughly even between Equity and Fixed Income ETFs. However, trading in Equity ETFs dominated the second quarter (see Exhibit 2).
