As we gather data and commentary for the 9th edition of ISLA’s Securities Lending Market Report which is due for release in early September, interesting trends within the industry are worth reflecting upon as the summer draws to a close.
Equity securities lending markets, particularly in North America are performing well. Institutional investors appear to be coming back to the product, a direct or indirect consequence of more assets moving from active to passive structures. The recent announcement by Fidelity to launch zero fee tracker funds will only raise the debate around the role of securities lending further. The end of Quantitative Easing in Europe appears to be in sight. With the unwind of buyback programmes, we expect to see knock-on impacts within both the government bond securities lending markets. We believe what we are seeing is an industry that is running to several different drum beats that will fundamentally reshape much of what we do in the future. That is before we even consider the impacts of Brexit!
The ISLA Securities Lending Market Report is a bi-annual review of the industry, published by the Association. To download the most recent edition, please visit www.islaemea.org.