European exchange equities may profit from the Credit Suisse (CSGN.S) collapse as investors seek conservative market operators with low valuations.

As investors pursued banks due to increasing interest rates (.SX7P), the exchanges’ share prices have underperformed the region-wide STOXX 600 (.STOXX) index by much to 13 percentage points since September.

After a slow start to the year, March’s turmoil is prompting some investors to diversify away from banks.

As credit conditions tighten, defensive industries like exchanges may benefit from rising bond and equities volatility.

In recent weeks, exchange operators’ shares have gained, with traders and analysts citing investor rotation into exchanges, partially at banks’ cost. As a result, volume spikes increase exchange operator trade activity.

“There’s rotation, the most obvious and public example of this is in the price action,” said Andrew Morgan, president of U.S. financial technology supplier TS Imagine.

“Exchange operators are data and technology businesses with defensive utility-like features, while banks are highly cyclical and exposed to idiosyncratic business model risks.”

Euronext (ENX.PA), which operates exchanges in seven major European cities from Paris to Amsterdam and Milan, had its third-highest equity trading value on March 17. In addition, March had its highest average daily traded volumes in a year.

SIX, at the center of UBS’s (UBSG.S) bailout of Credit Suisse, saw March turnover rise 44.6% over February. Deutsche Boerse (DB1Gn.DE) cash market turnover jumped 23.7% last month compared to February.

London Stock Exchange (LSEG) (LSEG.L) average daily value increased by 12.9% in March. Since 2021, Thomson Reuters—the owner of Reuters News—has owned LSEG. LSEG pays Reuters for news.

In a few weeks, mutual fund filings will indicate any changes.

In April, UBS research using the bank’s prime brokerage data and other sources revealed that investor “crowding” in exchange operator stocks had rebounded from four-year lows.

Exchange stocks have the highest volatility correlation among European financials.

Banking turbulence and options expiries pushed the Euro STOXX volatility index (.V2TX) to its highest since October last month. In addition, the fixed-income volatility index MOVE (.MOVE) reached 2008 levels and remains high.

“Investors view exchanges as protective names. “In recessionary environments, we tend to see money allocated increasingly to the exchanges,” said UBS London senior equities analyst Michael Werner.

“The number of incoming calls I have had on the exchanges has certainly increased over the past two or three weeks as people are working at the allocations within the financial space of their portfolio,” he added.

Werner said uncertainty over monetary policy should keep bond volatility high, boosting exchange stocks, while equity volatility spikes hurt investment banking, M&A, and client fund flows at major universal banks.

Since March’s SVB bankruptcy, Deutsche Boerse has gained almost 10%. Deutsche Boerse shares reached a record high Thursday.

LSEG and Euronext are up over 8% and 4%, respectively, while Amsterdam-based market maker Flow Traders (FLOW.AS), which benefits from volatility, is up over 13%.

European banks lost 12% during the same time.

Long-term investors expect data demand to boost the exchange business. Exchange values are approaching multi-year lows, limiting the downside.

Refinitiv Datastream reports that Euronext trades at 14 times 12-month ahead earnings and LSEG at 22 times, 18% below their five-year averages.

Nasdaq Inc (NDAQ.O) trades on a multiple of 20, 3% below its 5-year average, while Intercontinental Exchange Inc (ICE.N) trades at 19, 4.7% lower.

“Beyond being volatility beneficiaries, which makes them attractive within a diversified portfolio context, we also believe they are well-placed for data demand and consumption trends,” said RBC Wealth Management head of equities Thomas McGarrity. “We prefer exchange stocks.”