This month, the London Stock Exchange (LSE) marks a significant milestone: 25 years since the first Exchange Traded Fund (ETF) was listed in the UK. The ETF market has grown tremendously since that pivotal moment in April 2000 when the iShares Core FTSE 100 UCITS ETF was listed. Over the past quarter-century, the landscape of Exchange Traded Products (ETPs) has expanded dramatically, reflecting shifts in investor preferences, financial innovation, and market demand for cost-effective, transparent investment solutions.

The introduction of ETFs to the LSE provided investors with a novel way to gain diversified exposure to markets while enjoying the flexibility of daily trading. At the LSE, our approach has always been guided by our four pillars: innovation; partnership; integrity; and excellence.

From a single ETF in 2000, the LSE now hosts over 2,350 ETPs with over £1 trillion in AUM. In 2024 alone, 270 new ETPs joined the Exchange.

One of the most striking aspects of the ETF market’s growth has been the pace of innovation. We are thrilled that we get the honour of working with over 50 issuers at the LSE. Over the years, these issuers have evolved the ETF landscape moving from simple index-tracking products to encompass a wide range of strategies and exposures, including environmental, social, and governance factors, smart beta, active management, crypto-currencies and leveraged solutions. In May 2024, we celebrated another milestone, enabling access for professional investors to crypto currency ETNs to the market for the first time. 

Jane Sloan, EMEA Head of iShares and Global Product Solutions, BlackRock

"For 25 years, ETFs have been a catalyst for investors across Europe to access markets. Innovation in ETFs has redefined wealth management propositions, redefined how bonds are traded and how institutions allocate at scale – all whilst providing convenience, choice and trading efficiency”.

ETP trading now makes up 20% of the LSE daily turnover, with trading spread across 19 market makers, who have been pivotal in supporting this growth. In 2024 alone we saw the average daily volume traded for ETPs increase 30% year on year. Advances in technology, particularly the rise of ETF algorithms for trading, could lead to the creation of even more sophisticated ETF products and trading strategies. In April 2025, we also recorded our highest trading day in ETPs, with £2.6bn traded on the LSE order book. 

Paul Bermingham, Head of ETF Trading, Susquehanna International Group

“We are proud to have been one of the first movers in providing significant liquidity in ETFs on the London Stock Exchange, transforming the market and offering investors unparalleled access to diversified assets. It was just a field of dreams back then”.

Being at the forefront of a growing market means we must continue to innovate our ETP services to support market participants across the world. In December 2020, the LSE launched its request-for-quote service order type, ‘RFQ 2.0’, which offers auto-complete RFQ functionality, with an order book sweep to both visible and hidden liquidity while also having direct central counterparty clearing. By not limiting sub-LIS orders (orders less than £1m) to just RFQ responses, RFQ 2.0 can improve the risk price, achieving a better execution price for our clients. With strong market supervision capabilities, we remain committed to order book integrity and believe that initiatives like RFQ 2.0 will enhance liquidity while ensuring fair and orderly pricing. 

Over the past 25 years we’ve also seen the increasing participation of retail investors in the space. Advances in technology, the rise of online trading platforms, and the introduction of commission-free trading have democratised access to ETFs. Retail investors can now build diversified portfolios at a fraction of the cost previously associated with traditional fund investing. 

The accessibility of ETFs has been further enhanced by robo-advisors, which utilise these products to construct low-cost, diversified investment strategies for clients of all experience levels.

Beyond the expansion of offerings, regulatory developments have played a crucial role in shaping the industry. Regulatory bodies have continued to refine frameworks that ensure transparency, investor protection, and market stability. These developments have helped build investor confidence in ETPs as reliable and resilient investment vehicles, even during periods of market volatility.

Katya Nelyudova, Head of FTSE Russell Sales, EMEA, FTSE Russell elaborates: 

“At the heart of every successful ETF lies an index.  An index can be thought of as a recipe in a cookery book:  it sets out the ingredients necessary to make a dish, together with the instructions to combine them.  FTSE Russell produces the recipes that fund managers like BlackRock/iShares can follow.  But the index is not the dish itself!  It’s just the guide to produce it.  The step-by-step ground rules of an index help produce the desired dish –a fund’s constituents.  Therefore, the right ETF starts with the right index.  And your choice of index really matters!

As we mark 25 years of ETFs on the LSE and in Europe, FTSE Russell, and its flagship indices like FTSE 100, Russell 2000 or the FTSE Fixed Income Series, is proud to have been a trusted index partner since the very beginning, having played an integral part in the evolution of this transformative investment vehicle. Our strong brand, deep heritage, commitment to innovation, and partnership with leading issuers like BlackRock/iShares have helped drive the growth, transparency, and accessibility of ETFs for investors in the UK and across the globe. From pioneering benchmarks to powering innovative ETF strategies across asset classes, FTSE Russell remains committed to delivering reliable solutions that help investors, and the ETF ecosystem navigate ever-changing markets”.

As we celebrate 25 years since the launch of the first ETF at the LSE, it is clear that the industry has come a long way. From a single fund in 2000 to a thriving ecosystem of thousands of products, ETFs have transformed the way both institutional and retail investors can access financial markets and increase their exposure to a wider range of asset classes and geographies, enabling them to diversify their portfolios and evolve their investment strategies.  At the LSE, our commitment to innovation, excellence and integrity – guided by strong partnerships with our clients- will continue to shape the progress of our ETP markets. We take the importance of keeping our order books open seriously, ensuring that capital and risk are priced fairly and transparently to support global financial stability and economic growth. We look forward to the next 25 years and playing our part in the ETP market’s continued growth.