Keeping Track

An emerging ETF ecosystem to support a growing industry

251 C-suite fund managers and 200 institutional investors share their strategies for the year ahead.

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ETFs have become an opportunity impossible for asset managers to ignore. As the European exchange-traded fund (ETF) market turns 25 this year, we explore the growth story behind this disruptive trend. The last few years in particular have seen ETF investment soar, with 2024 marking a record year for inflows within the ETF market, drawing in €247 billion, outstripping the previous record of €159 billion in 2021. [1]

In what promises to be another bumper year for ETFs, Keeping Track uncovers the key trends and developments fund managers and institutional investors are forecasting. Drawing on our proprietary research undertaken for Change 2025, amongst other sources, we’ll explore the appetites from both fund managers and investors for ETFs, pinpoint what is fuelling the growth story, and assess how fund managers can capitalise on the opportunities emerging in this rapidly expanding space.

These findings are informed by 251 C-suite executives in fund management and 200 institutional investors we surveyed, collectively responsible for more than $4.6 trillion AUM, on their strategy for the year ahead.

A preview of what’s inside:

Growth on the horizon:

Europe emerges as an epicentre for ETF growth with fund managers catering to an investor base demanding low cost, transparent and flexible products.

• Almost all (97%) of the equity and fixed income fund managers we surveyed say offering ETFs is important to the future longer-term prospects of their organisation, while almost two-thirds (69%) identify ETFs as a key driver for growth.

ETFs get active:

Active ETFs are fuelling the next stage of the growth story in Europe, offering tailored asset class exposure and with room for some excess market return.

• 58% of the investors we surveyed expect active ETF products to account for the majority of funds launched in the sector by 2026. Assets in European active ETFs totalled €54.4 billion by the end of 2024, up from €29.6 billion in 2023. Equity is the largest segment (€34.4 billion).

Getting to market:

The European ETF market is complex, fragmented and heavily regulated, and ETF issuers must navigate various hurdles to successfully launch an ETF. The trend toward outsourcing is creating a whole new ETF ecosystem.

• Almost two-thirds (64%) of those surveyed say they use third parties to help them select service providers such as administrators and custodians, while 63% use support to establish legal structures typically under UCITS.

Download Keeping Track for detailed insights into the drivers behind the ETF growth story, the surge in active ETFs, and the support options available to help managers capitalise on an opportunity they cannot afford to ignore.