ETFs
European ETFs cross $2 trillion milestone
The European ETF market has surpassed $2 trillion in assets under management (AUM) for the first time, marking a monumental milestone for the sector.
According to ETFbook data, the European ETF market has double its assets under management since January 2020, a period that included the COVID-19 crash and the inflation-driven sell-off in 2022.
The milestone comes after European ETFs recorded net inflows of $158 billion in 2023, the second highest on record and a 70% increase from the previous year.
ETFs also exceeds mutual funds at the end of last year, recording 119.7 billion euros in inflows while the rival structure suffered outflows of 61.1 billion euros.
The model for ETF market growth over the past 12 months has been active ETFs. Flows into active ETFs almost doubled to €2.1 billion in the first quarter of 2024, compared to €1.1 billion in the previous quarter.
Overall, simple ETFs that track indexes such as the S&P 500 and MSCI World continue to capture the bulk of capital flows.
Pawel Janus, co-founder and head of analysis at ETFbook, said: “As more issuers package their actively managed strategies into the ETF wrapper, recognizing the benefits of the ETF as a structure practical fund beyond a simple index-only tracking vehicle. – the potential for future growth in assets under management indeed seems rather substantial.
The rise of retail trading in Europe is also linked to accelerated market growth, with the number of ETF savings plans in Europe expected to reach quadruple over the next five years to 32 million compared to 7.6 million in September 2023.
Furthermore, European mutual fund managers are increasingly swing in favor of the structure, with a recent Blackwater survey finding that 92% of respondents plan to expand into ETFs or plan to increase their due diligence in the next two years, up from 9% in 2021.