Europe’s fund-of-funds market touched €1.3tn in assets in 2025, with investors favouring lower-cost and scalable multi-asset strategies, according to Morningstar’s data.
Allocation funds accounted for around 75% of the market and attracted €30.8bn of net inflows in 2025 following two consecutive years of outflows.
European market growth is becoming concentrated among the largest providers, according to the findings, with the top 10 managers controlling around 31% of total assets.
Vanguard was the largest provider in Europe, while BlackRock recorded the fastest asset growth among the top 10 managers over the past year.
UK-domiciled funds accounted for nearly one-third of total assets at €409bn and continued to record inflows between 2023 and 2025, contrasting with relatively more volatile trends in continental Europe.
Average fees for key UK fund-of-funds categories stood at around 0.7%, compared with 1.6% for European peers.
Investors continued to favour lower-cost products, with the cheapest fee quintile attracting €96bn in net inflows over the past three years, while higher-cost products experienced outflows.
“The European fund-of-funds market is no longer focused on expanding the opportunity set, it’s focused on efficiency. We’re seeing fewer launches, lower fees, and a clear shift toward scalable, systematically built multi-asset solutions,” said Lena Tsymbaluk, associate director, equity strategies at Morningstar.
“In an environment where costs matter more than ever, investors are concentrating assets with managers that can combine diversification, discipline and price competitiveness. That’s reshaping the competitive landscape across Europe, particularly in the UK, where fee pressure and regulatory scrutiny have accelerated this trend,” she said.
