European ETF Assets May Double by 2030, EY Says
The consultancy predicts total European ETF assets under management AUM will hit $4.5 trillion in Europe and $25 trillion worldwide by 2030.
The European ETF market is set to double by 2030 as adoption of the wrapper continues to accelerate, according to EY research.
The consultancy predicted total European ETF assets under management (AUM) would hit $4.5 trillion in Europe and $25 trillion worldwide by 2030.
In 2024, European ETF growth outpaced the U.S., hitting $2.24 trillion by the end of 2024 which EY tied to the expansion of online retail platforms. Still, the U.S. industry is several magnitudes larger, with assets topping $10 trillion in October.
Active ETFs were also cited as an “increasingly important” driver of growth in European markets and the report identified several regulatory changes in Ireland and Luxembourg aiding the growth of the product class.
For example, "several" mutual funds were set to add ETF share classes after the Central Bank of Ireland (CBI) changed its stance on its ETF share class naming convention, while Luxembourg removed its subscription tax for active ETFs and amended transparency requirements for ETFs.
Active ETF Growth in Europe
The growth of active ETFs and tweaks to European regulation has fostered greater innovation in the space, with Europe welcoming its first AAA CLO UCITS ETF last year from Fair Oaks Capital.
The report also highlighted the European retail market as a catalyst for growth, though the portion of retail ETF investors still lags significantly behind the US.
The rise of low-cost investment platforms and robo-advisors offering ETF-based portfolios are also fueling growth.
The retail segment of the European market saw a stream of partnerships across 2024, including Franklin Templeton teaming up with Trade Republic to offer its entire ETF range and Amundi extending its partnership with Scalable Capital to offer ETFs on the platform.
ETF white labeling has also seen an uptick in 2024 as asset managers can enjoy dipping their toe in the market without building the infrastructure themselves.
Key examples include Jupiter entering the market via HANetf with an actively managed bond strategy.
This article was originally published in etf.com sister publication ETF Stream.
