As the ETF ecosystem expands and matures, industry experts agree that the future holds significant transformation – from technological innovation and white-label platforms to greater adoption in global savings plans and model portfolios.
Tony O’Brien, chief commercial officer at US Bank, highlighted the evolution of the ETF infrastructure itself. He pointed to platforms like the ICE ETF Hub—an integrated system used to manage and disseminate ETF data—as a sign of where the industry is headed.
“Everybody can get the same data in the same place. There are firms doing that now, but in the future, others will do it better,” he said. “The data revolution will impact ETFs as much as it impacts the rest of the investment management business.”
From education to adoption
Deborah Fuhr, founder of ETFGI and one of the most prominent voices in the ETF landscape, believes the expansion lies more in usage than in radical transformation. “Is it more about ETFs going into savings plans and being used in model portfolios?” she asked rhetorically. “Savings plans are seen as a big growth driver with retail investors in Germany and Italy. Even here, you’re seeing growth.”
Fuhr sees model portfolios as particularly powerful due to their “stickiness.” Once an investor commits to a model, “you are responsible for rebalancing if something’s moved,” Fuhr explained. “It creates long-term commitment.”
Yet, despite growing familiarity, there’s still an education gap among investors. “The irony I always found was you’d be talking to someone about ETFs for ten years, but it wasn’t until they did their first trade that they actually would understand them,” Fuhr said. “You have to be open to people asking ETF 101 questions years after they say they know what ETFs are.”
Trading infrastructure and price transparency continue to pose challenges for investors, noted Caroline Baron, head of ETF Distribution EMEA at Franklin Templeton. “There’s still a lot of work to do in that space to make sure they get more timely execution,” she said. “There could be convoluted mechanisms of trading.”
Standardisation across exchanges is another area ripe for improvement. “It’s becoming very interesting to understand who’s trading your ETFs. Some exchanges do that well. Others, you’ve got no information,” Baron noted. “From a data perspective, having a company that can centralize this is very valuable.”
Innovation on the rise
Hannah Evans, head of manager research at Omnis Investments, said that the ETF industry has seen significant innovation over the past decade, from smart beta and thematic exposures to active strategies.
“Looking ahead, I would expect the next phase of evolution to include deeper integration of alternative assets, regulatory shifts, and technological advancement driving distribution and product customisation. That said I still think the traditional ETF space has room to grow.
“There are plenty of other blue sky thinking options but it remains to be seen what traction they will get.
“With the tokenisation of real-world assets gaining traction, ETFs could evolve into fully on-chain structures.
Roxane Sanguinetti, ETF trading & market making specialist, sees efficiency as the next big wave, especially in such a low-margin industry. “We need to find efficiency everywhere,” she said. “Now you can launch an ETF with a white label, which years ago wasn’t possible. Every layer of the ETF journey has improved — trading, fund processes, primary market portals, and data providers.”
Sanguinetti emphasised that the shift toward white-label platforms has democratised the ability to launch funds. This infrastructure not only lowers barriers to entry but also attracts global asset managers who might otherwise avoid setting up a local footprint.
“We’re seeing a lot of interest from US managers who understand the benefits of ready-made architecture,” said O’Brien. “They don’t want to have boots on the ground in Europe unless they’re large.”
This sentiment was echoed by Manooj Mistry, COO at HANetf. “It’s better to invest resources in salespeople or marketing rather than product manufacturing,” he said. “That’s a natural reason to use a platform to enter the market.”
The ETF space is also becoming more crowded as traditional asset managers look to diversify. “Just where I come from in France, you have pretty much every asset management company looking into ETFs,” said Baron. “Should they launch new products through ETFs? Is that the future? There’s a lot of discussion about that.”
What’s clear is that the assumption that ETF innovation had plateaued is unfounded. “We thought it would just stall,” Baron said. “But what you see happening is the contrary.”
Fuhr further noted that ETFs are becoming increasingly global, unlike traditional US-centric mutual funds. “The ’40 Act funds and ETFs don’t travel well anymore,” she said. “So you’re seeing many firms come here [to Europe] and launch Ucits ETFs to go to Asia, Latin America, and even the Middle East. Abu Dhabi, Saudi Arabia and Qatar are all very interested in ETFs.”
Even hedge funds are starting to embrace the ETF structure as a more scalable and accessible wrapper for strategies that were once reserved for institutional investors.
“It’s interesting,” said Mistry, with a nod to the ongoing globalisation and technological cross-pollination.
From their origins as passive index trackers, ETFs are evolving into dynamic financial instruments supported by cutting-edge technology, sophisticated trading platforms, and expanding global adoption.
Whether it’s through more efficient data systems, integration into retirement savings, or serving as a launchpad for asset managers entering new markets, ETFs are proving to be one of the most versatile tools in modern finance.
As Fuhr summarised, “ETFs have definitely become a global phenomenon… and that’s only going to continue.”
CLO ETFs: fixed income’s next frontier in Europe?
The panellists then went on to consider whether CLO-Linked ETFs are becoming Europe’s next frontier in fixed income innovation.
As Europe reconsiders its rules around securitised assets—particularly collateralised loan obligations (CLOs), once branded as the villains of the 2008 financial crisis—an unexpected window of opportunity is opening for exchange-traded funds (ETFs).
Ireland, long a hub for ETF listings, currently has a regulatory environment that allows ETFs to hold CLOs. With Brussels watching how securitised assets might help finance the real economy, the question now is: where do CLO-linked ETFs fit into modern investment portfolios?
O’Brien tackled this question head-on: “Where would CLO-linked ETFs fit into portfolios? They would sit at that end of the investment continuum delivering more returns with a certain risk-return profile — something more investors are moving towards,” he explained. “When you take away the ETF, which is just a wrapper, what you’re really asking is: why private markets? Why are they important?”
The answer, according to O’Brien, lies in growing investor appetite for enhanced yield, and greater familiarity with previously opaque asset classes. “We’ve developed systems and processes around the administration and rating of these products to better understand them,” he noted. “So it makes sense for the market to wrap an ETF around them to deliver exposure more effectively and efficiently.”
That said, the complexity of underlying CLO assets poses a challenge, particularly around liquidity. “You’re now wrapping a less liquid asset in an ETF. How is that going to work?” O’Brien asked. “Do you have to build in some sort of liquidity buffer?”
Despite these risks, there is genuine enthusiasm in the market for the innovation that CLO ETFs represent.
Evans said that, with more robust structuring, transparency, and investor protections, the narrative around CLOs is now beginning to shift.
“Ireland’s role is pivotal,” she said. “As one of the most ETF-friendly jurisdictions in Europe, it provides a regulatory environment that permits ETFs to hold CLOs. This sets a precedent for other EU countries.
Evans added that CLO-linked ETFs could play multiple roles in a diversified portfolio, for example as yield-enhancing tools, particularly in a low or falling rate environment, or as credit diversification instruments, offering access to senior secured loans with floating rates and relatively low duration.
They could also form part of a barbell strategy, balancing high-quality core fixed income holdings. “The challenge will be investor education, liquidity, and transparency, Evans said.
Mistry echoed this optimism, emphasising that ETFs offer a way to democratise access. “ETFs are a wrapper, an access tool. What we’re providing is the building blocks for any portfolio,” he said. “They can be more liquid than the underlying. If you’re a professional investor, buying a CLO ETF instead of the underlying CLOs might offer tighter trading spreads.”
In other words, the ETF doesn’t need to replace the underlying market—it can enhance it. “It’s not going to be the be-all and end-all,” Mistry added. “But it’s a useful part of the toolkit for tactical or strategic use. Whether it succeeds depends on how investors use it.”
Still, not all investors are ready for the nuances of CLO exposure. Sanguinetti emphasised the importance of transparency and investor education. “You have to look inside the product,” she cautioned. “This isn’t the S&P 500. Some of these markets don’t have the depth of liquidity. You need to understand how the product is constructed.”
To illustrate the stakes, Baron shared a cautionary tale: “We had a client who wanted to trade platinum in a way that would’ve impacted the entire market because the volume he intended to move was equivalent to a week’s trading—done in one day. It sent a false signal. CLOs are similarly specific. This isn’t the same as trading government bonds.”
ETFs holding CLOs often blend in more liquid instruments — like corporate bonds — to maintain tradability. But even this requires investor diligence. “Get to know your provider. Get to know your product. Get to know the liquidity,” she urged. “That way, you’re not caught off guard when markets shift.”
Sanguinetti agreed, saying, “Knowledge is power. These products are becoming more specific and more tailored to professional investors. It’s essential people understand what they’re buying.”
Fuhr noted that the perception of ETFs in fixed income has evolved significantly —especially since the pandemic. “The way fixed income performed during Covid showed many that ETFs could be a better source of price discovery, especially in times of volatility,” she said. “So the wrapper is being embraced in a way it wasn’t before.”
That embrace could be a game-changer for Europe. Regulators, seeking ways to strengthen the continent’s capital markets and reduce reliance on bank lending, are revisiting securitised products like CLOs as potential tools for unlocking private financing. If structured responsibly, ETFs could become a key mechanism for channelling capital into these markets.
O’Brien pointed out that it all ties back to improving confidence in the structure. “Better ratings, better administration, better transparency — these are the reasons CLO ETFs are viable now,” he said.
For now, CLO-linked ETFs remain a niche segment. But their trajectory reflects broader trends in the ETF universe: greater specialisation, improved technology, and increased access to once-restricted market segments.
In the end, as Mistry put it, “It’s all about giving investors the tools. The rest depends on how wisely they’re used.”
Whether European regulators open the doors wide to CLOs in ETFs — or proceed cautiously — one thing is clear: the conversation around securitised assets is no longer taboo. It’s evolving. And ETFs could be central to that transformation.
ETFs gain institutional ground
The high-level panel wrapped up the event by debating whether the developments discussed would be likely to expand the distribution channels for ETF products in Europe in an impactful way.
“The quick answer is yes, and also globally,” said Fuhr, when asked if these developments will broaden ETF uptake among insurers. “Usage travels around the world, and I do think insurance companies are looking at ETFs a bit because they feel they have to now.”
Baron emphasised that while interest is growing, Europe still lags behind the United States due to regulatory differences. “In the US, ETFs have been embraced more by insurance companies because of the specific regulation there,” she explained. “In Europe, it’s not the same. Some ETFs require more capital, making it more costly from a capital standpoint.”
However, Baron noted that the landscape is changing. “As regulation keeps evolving, maybe ETFs find sweeter spots in insurance portfolios. Already, some insurers use ETFs tactically or even for core holdings, depending on the type of insurance company.”
She highlighted the difference between various parts of the insurance business. “On the unit-linked side, which is more retail-focused, there’s a tonne of evolution taking place. More insurance companies are plugging ETFs into their platforms,” Baron said. “On the balance sheet side, some insurers have been using ETFs for years.”
Evans noted that insurers, traditionally conservative in their investment approach, have increasingly warmed to ETFs — especially for liquidity management, tactical allocation, and cost-efficiency.
“With regulatory clarification around securitised exposures, insurers may become more active ETF users, particularly for spread product exposure in a UCITS wrapper,” she said. “Insurers will be interested in ETF wrappers that deliver credit and illiquidity premia with regulatory clarity.”
Mistry added that pension funds—closely tied to insurance ecosystems—are also seeing greater ETF adoption. “Traditionally, pension funds have bought index funds, but there are certain segments where ETFs offer cheaper or more accessible exposure,” he said.
“While larger pension funds still prefer segregated mandates, smaller funds appreciate the flexibility ETFs offer for trading in and out of sectors or asset classes.”
Baron also pointed out that insurance companies have been among the early adopters of ETFs in Europe. “I remember the first users used to be insurance companies on their own balance sheets,” she said. “It used to be significant amounts they were putting into ETFs, especially for core exposures or tactical areas where they didn’t have the capacity to do extensive research.”
For insurers with small investment teams, ETFs offer a streamlined solution. “Sometimes it’s just a team of two people. Using ETFs is quick, easy, and doesn’t require a tonne of research,” Sanguinetti explained.
Mistry concluded by noting that insurers often play a critical role in the early stages of an ETF’s life. “Insurance companies and pension funds are good sources for seeding new ETFs. They’ll put the initial money in to get the product going,” he said.
With regulatory frameworks becoming more favourable and insurers seeking efficient investment tools, ETFs look set to gain even greater traction among Europe’s insurance and pension sectors.
The panel
Caroline Baron, head of ETF distribution EMEA at US-based asset manager Franklin Templeton
Hannah Evans, head of manager research at fund buyer/distributor Omnis Investments
Deborah Fuhr, founder and managing partner of independent research and consulting firm ETFGI
Manooj Mistry, chief operating officer at white label ETF provider HANetf
Tony O’Brien, chief commercial officer at custodian and fund administrator US Bank
Roxane Sanguinetti, ETF trading & market making specialist at consultancy firm Alimeia Ventures
Mark Latham, deputy editor, Funds Europe (moderator)
