Barclays Global Investors (BGI), the largest player in exchange-traded funds, sees the Nasdaq Stock Market Inc having an expanded role through its new NASDAQ ETF Market.
BGI recently launched five iShares ETFs with a primary listing on the Nasdaq, a first for BGI. Other iShares ETFs have their primary listings on the American and New York Stock Exchanges and on the electronic NYSE Arca.
"These are the first products that we've ever done with a primary listing on the Nasdaq," Michael Latham, head of iShares Americas, told Reuters in an interview on November 29. "From our perspective that's a big deal."
He said BGI expects to continue to list new iShares ETFs with the Nasdaq but at the same time the Amex and the NYSE Arca will not be shut out.
"We'll continue to use NYSE Arca and continue to use the American stock exchange and Nasdaq," Latham said. "From our perspective, competition is good. It keeps spreads tight for customers."
He noted that regardless of where products are listed, they trade on all of the exchanges.
Nasdaq is not a newcomer to ETFs, the index-based funds that trade throughout the day on exchanges. Nasdaq had a 37.9 percent share of all US ETF trading volume in October, more than any other US exchange.
"The money is following liquidity," Latham said, adding that the key to liquidity is tight spreads.
BGI has been moving its NYSE-listed iShares ETFs from the NYSE to the electronic NYSE Arca, as exchange parent NYSE Euronext works to make NYSE Arca its single platform for listing and trading ETFs.
Latham said BGI worked closely with the Nasdaq to develop the NASDAQ ETF Market, which made its debut in October.
He said a key feature of the NASDAQ ETF Market is having a primary market maker for each ETF product. The Nasdaq calls the market maker a "Designated Liquidity Provider" and says one of the goals is to help support ETFs and index-linked notes in their early stages when volume is on the light side.
Of the five new BGI ETFs, one is based on an index of non-North American small-cap stocks, and the others are based on real estate investment trust indexes with each focused on a specific region.
The new ETFs are the iShares FTSE Developed Small Cap ex-North America Index Fund, the iShares FTSE EPRA/NAREIT Global Real Estate ex-US Index Fund, the iShares FTSE EPRA/NAREIT Asia Index Fund, the iShares FTSE EPRA/NAREIT North America Index Fund and the iShares FTSE EPRA/NAREIT Europe Index Fund. Barclays global investors is a unit of Barclays PLC.