Thematic, ESG, and Fixed-Income Products Are Set to Play a Key Role in the European ETF Market in the Coming Years


Cerulli Associates’ latest report, European Exchange-Traded Funds 2020: Adding Variety to Low Costs and Transparency, shows that the future is bright for the exchange-traded fund (ETF) market in Europe, with nearly all the ETF issuers surveyed by Cerulli expecting healthy levels of annual growth in the ETF market over the next two years.

ETFs have gone from playing a minor, tactical role in European investors’ portfolios to standing strong as core building blocks; their lower costs may be sustainable as part of long-term buy-and-hold strategies. Cerulli’s research shows that the fastest growth is likely in Switzerland and the U.K., where 50% and 45% of survey respondents respectively expect the passive ETF market to expand at an annual rate greater than 10%.

Several factors are driving European investors’ increasing use of ETF products. More than one-third (35%) of the ETF issuers Cerulli surveyed in Europe consider institutional investors’ increasing adoption of ETFs the major driver of ETF asset growth. A similar number (32%) see the increased availability of fixed-income ETFs and the use of ETFs by digital platforms as two of the other main drivers of ETF asset growth.


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