Automated ETF Trading Shows Resilience During Tariff Turmoil

Data analysis by: Matthew Greenstein, Director, U.S. Equities, Jessie Durlacher, Assistant Vice President, EU Equities, and Jackson Emus, Assistant Vice President, U.S. Equities

The term “flight to safety” was used a lot over the course of the month of April as global markets responded to the Trump administration’s tariff policies. In conventional Wall Street terminology, the phrase refers to a large-scale move by investors to de-risk their portfolios as they seek shelter in so-called safe-haven asset classes. In the world of electronic trading, this kind of response was also historically accompanied by a shift away from electronic and automated trading protocols and toward the perceived comfort of the old standby: voice-based trading.

During the market volatility in early April, neither of those approaches played out the way everyone expected. Instead of flocking to products deemed ‘safer’ like Treasuries, investors sought shelter in non-U.S. markets—including European equities—and in some cases, diversified investment funds and crypto assets. And, instead of turning to the phone, they kept trading electronically via Request-for-Quote (RFQ) platforms, like Tradeweb. Also, in many cases, clients used automated solutions like our Automated Intelligent Execution (AiEX) tool, a rules-based solution that allows clients to pre-program the release of orders into the market, to keep trades moving without the conventional level of human-control and hand-holding that typically accompanies periods of extreme market stress.

Automated ETF Volumes Surge in April

Trading activity on Tradeweb’s institutional U.S. and European ETF platforms during April this year illustrates this trend clearly. As the Volatility Index (VIX) surged more than three times beyond its 30-day average over the course of the month, total traded volume on our ETF platforms skyrocketed. In U.S. markets, we saw total notional volume on our institutional platform top $120.8 billion (bn), which was up 110% on a year-over-year (YoY) basis. In Europe, we saw a similar trend, with $98.0bn in notional volume, which was up 79% YoY. Together, the two combined to create a record $218.7bn in notional volume, an increase of 95% YoY.

However, the surge in ETF volumes, while noteworthy, was not a total surprise. We saw a similar trend of heightened volumes in previous periods of extreme market volatility, such as the early days of the COVID pandemic in March of 2020, when U.S. ETF notional volumes surged 226% YoY and EU ETF volume climbed 242% YoY. In April 2025, we saw an increase of 445% in U.S. ETF volume and 122% in EU ETFs as compared to March 2020, a significant jump. The combination of extreme liquidity, low trading costs and huge flexibility that comes along with ETFs has been a major attraction for market participants looking to tailor and reposition their risk profiles when markets get jumpy. That said, April 2025 stood out not just for the elevated activity, but for the context in which it occurred. This time around, the volume surge we saw was underpinned by a broader structural shift: the growing participation of a broader range of client types, including new entrants, in electronic workflows on our ETF platform, enhancements to our trading protocols and platform functionality and a more widespread embrace of electronic workflows across market participants, especially for trading larger orders. Together, these factors point to a more mature and resilient electronic ETF ecosystem—one that’s increasingly central to how investors manage risk in volatile market conditions.

While this surge in electronic trading was expected, something we haven’t seen so prolifically in previous periods of market volatility is an increase in clients turning to automation. However, in April, we saw investors using automated tools like Tradeweb’s AiEX tool to enhance reactivity to a challenging trading landscape with greater speed of execution. We also saw this trend toward more automation play out in our notional trading activity, with a higher number of trades executed via automated RFQ in April 2025 as compared to March 2020. Globally, ETF automation continued to grow in April 2025. The proportion of ETF volume executed through automation increased by 83% YoY, and increased by 408% as compared to March 2020. In Europe, we saw a record proportion of trades and notional volume completed via AiEX, increasing by 193% and 78% YoY, respectively.

Tracking the Evolution of Automation

Looking a little more closely at the composition of those trades and recent evolution in how market participants have been using automated tools such as AiEX in much more sophisticated ways, it becomes easy to understand why automated trading gained momentum during this period of heightened volatility. Driven by market evolution and clients’ changing needs, we have continued to build out diverse functionality to redefine trader workflow automation. We have increasingly seen clients optimize enhanced features within AiEX like our time release function, which allows clients to schedule an order at a time most beneficial for them, like automatically trading the open or the close, while simultaneously bypassing time zone constraints. Another significant enhancement is AiEX RFQ Pro, which gives clients more flexibility and control over trades. We have also continued to enhance our Portfolio Trading functionality, which allows clients to buy or sell multiple ETFs simultaneously as a single package. Furthermore, in Europe, we saw a record-month for market-on-close in-comp trading, as clients continued to turn to automation to more efficiently manage what are often their largest and most critical credit trades.

Together, these tools have helped clients evolve their automated trading strategies from only focusing on simple, low-touch trades to much more elaborate trading strategies contingent on a multitude of different variables. Beyond these examples, new technologies to ETF trading, like ETF Snap which optimizes the dealer selection process by using historical trade data on Tradeweb and generative AI algorithms to help identify the best dealer for a specific trade, are making it possible for market participants to understand all the element components of a trade before an RFQ is even sent.

Buckle Up for the Road Ahead

The X-Factor in all of this, of course, is trust. At the end of the day, our clients would not be comfortable maintaining ‘business-as-usual’ or even ramping up their trading strategies as we have seen with automation, during periods of volatility on the scale of what we saw in April if they did not trust our protocols to deliver consistently and accurately. We’ve earned that trust by working closely with clients to develop these solutions, and by continually tweaking and refining workflows until we get to the best possible outcome. It’s been a wild ride this past month, but we’re grateful to our clients for putting their faith in us and we look forward to working closely with them to keep conquering whatever the market throws at us next.

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