The European exchange-traded fund (ETF) market recorded its strongest year on record in 2025, growing by 41% to reach $3.2 trillion (over €2.7 trillion) in assets under management (AUM), according to new research by EY Ireland.
This growth outpaced the global market, which grew by 33%, from $14.9 trillion to $19.9 trillion, driven by record net inflows of $2.4 trillion, amid increasing investor demand for diversified, transparent, and cost‑efficient investment tools.
Strong performance, expanding product choice, and growing institutional and retail participation supported global momentum. EY forecasts that ETF AUM will reach $6 trillion in Europe (over €5tn) and $40 trillion worldwide by 2030, underlining the sector’s resilience and long‑term growth trajectory.
Ireland maintained its role as the operational heart of the European ETF industry in 2025. The country now administers 70% of all European ETF assets and an exceptional 96% of active ETF AUM.
Ireland’s strong regulatory environment, highly developed financial services ecosystem and specialist talent base continue to attract both established issuers and new market entrants. These factors, combined with the country’s long‑standing leadership in fund administration and its ability to support increasingly sophisticated ETF structures, position Ireland at the centre of future European growth.
However, this position cannot be taken for granted. Targeted measures to boost individual participation in ETFs, combined with improved financial literacy, will help Ireland strengthen its role as a key hub for ETFs and wider financial services.
Lisa Kealy, EMEIA ETF leader at EY, said: “2025 was another stellar year for the European ETF market – we’ve seen record highs, record inflows and record adoption, all set against one of the most unpredictable years any of us can remember. We are not operating in the same world we were in even 18 months ago, yet ETFs haven’t just held firm, they’ve delivered their strongest year on record.
“ETFs aren’t just outpacing mutual funds – they’re outpacing private markets. Their growth is not a short‑term trend, it is a structural shift that is redefining the market. Investor behaviour is changing, distribution is changing and the competitive landscape is changing, and ETFs continue to be at the forefront of that evolution.”
Younger generations drive European retail boom, opportunity knocks for Ireland
Individual (retail) participation has continued to transform the European landscape. The number of online savings plan accounts rose 39% last year to more than 15 million and is forecast to exceed 54 million monthly executions by 2030.
Germany continues to set the pace with 14.5million ETF holders generating €20.5bn of ETF inflows during the first quarter of 2025 alone. France is closely following – the number of ETF investors grew by 117% last year while the Netherlands tripled between 2022 and 2025.
The EY research found that 72% of European investors planning to make their first ETF investment within a year are aged 44 or under. Generation Y and Z are more self-directed and digitally active than older peers, and are driving demand for low-cost, accessible investment products, including crypto and ETFs.
In response, online brokers and neobanks are increasingly competing through low-cost offers, portfolio management tools and fractional investing. This also means providers are investing in investor education or partnering with wealth managers and robo-advisers. This is reflected in the likes of Revolut adding hundreds of ETFs to its trading platform, or Monzo partnering with BlackRock to offer ETFs through its app.
Global trends: active ETFs accelerate
The standout story of 2025 was the acceleration of active ETFs, which grew 65% worldwide to reach $1.9 trillion in AUM. Active ETFs are exchange‑traded funds managed by professional portfolio managers who actively select and adjust the fund’s holdings with the goal of outperforming a benchmark or achieving a specific investment objective. Although active ETFs still represent a minority share of global assets, they generated nearly one quarter of global net inflows and are drawing a diverse new mix of issuers into the market. EY forecasts global active ETF AUM will reach $6 trillion by 2030.
Growth was also fuelled by demand for alternative strategies including private credit, thematic funds (which grew nearly 50% globally to $468bn), CLO ETFs and fixed maturity bond ETFs. The use of derivatives, including buffer and covered call ETFs, also expanded significantly.
Outlook to 2030
EY Ireland is forecasting continued double‑digit expansion driven by rising retail engagement, the rapid adoption of active ETFs, and accelerating product innovation. At the same time, increased competition and market complexity will require issuers to strengthen their capital markets capabilities, enhance data and transparency, and differentiate in a crowded market.
The long‑term structural themes shaping the industry: demographic shifts, technological advances and growing investor demand for low‑cost, accessible investment solutions, are set to define the next era of ETF development. As Europe’s leading ETF domicile, Ireland is well positioned to support this transition and to remain central to the industry’s future growth.
