The European ETF market has flown past $2trn assets under managements (AUM) for the first time, marking a monumental milestone for the industry.
According to data from ETFbook, the European ETF market has doubled its AUM since January 2020, a period that has included the COVID-19 crash and the inflation-driven sell-off in 2022.
The milestone comes after European ETFs saw $158bn net inflows in 2023, its second highest on record and a 70% increase on the prior year.
ETFs also outpaced mutual funds at the end of last year, seeing €119.7bn inflows while the rival structure suffered €61.1bn outflows.
The posterchild of growth for the ETF market over the last 12 months has been active ETFs. Flows into active ETFs nearly doubled to €2.1bn in Q1 2024, up from €1.1bn in the previous quarter.
Overall, plain vanilla ETFs that track indices such as the S&P 500 and MSCI World continue to capture the bulk of inflows.
Pawel Janus, co-founder and head of analytics at ETFbook, said: “As more and more issuers package their actively-managed strategies into the ETF wrapper – recognising the advantages of ETF as a convenient fund structure beyond merely index-tracking-only vehicle – the potential for further AUM growth appears indeed rather substantial.”
The rise of retail across Europe has also been tied to the accelerated growth of the market, with the number of ETF savings plans across Europe set to quadruple over the next five years to 32 million from 7.6 million in September 2023.
Moreover, European mutual fund managers are increasingly pivoting towards the structure, with a recent Blackwater survey finding 92% of respondents plan to expand into ETFs or are planning to intensify their due diligence over the next two years, rising from 9% in 2021.
