Assets under management (AuM) for Europe’s ETF industry reached an all-time high in 2023, according to market data provider Lipper.
Assets increased to reach €1.564 trillion– the majority of which (€1.19 trillion) were invested in ETFs assigned to article 6 of the SFDR, the EU’s sustainable fund labelling regime.
Within the active ETF market, equity ETFs held the highest AuM at €14.3 billion. Equity ETFs also posted the highest estimated net inflows within Europe (+€92.7 billion).
ETF inflows outstrip mutual funds in first two months
There was also a high number of product launches across all share classes over the course of 2023, equivalent to one a day (366).
The figures have led Detlef Glow, head of Lipper Emea research, LSEG, to predict that Europe’s ETF industry will continue to grow at a rate that exceeds the overall funds industry in Europe.
Furthermore, Glow predicted that assets in Europe’s ETF industry will exceed €2.5 trilliion before the end of 2030.
LSEG Lipper reviews European market performers for 2023
According to Glow, this forecast assumes an annual growth rate of 8% which “may sound conservative” but is tempered by the prospect of worsening conditions in the securities markets.
Glow also made a number of other predictions in his review of the European ETF market, including wider adoption of ETFs by European investors, more bond ETF launches, growth of ESG-related ETFs and greater use of AI in ETF product development and promotion.
“A Europe-wide adoption of ETFs by retail investors will, in combination with new fit-for-purpose conventional as well as ESG-related bond and equity products, be the core drivers for the future growth of the European ETF industry,” wrote Glow.
“Nevertheless, an industry wide usage of ETF share classes of actively managed mutual funds would be a game changer for the whole fund industry ecosystem in Europe and may make the forecast of a doubling in AUM obsolete, as such a move will drive the growth rate of the AUM much higher.”
