82% of institutional investors and wealth managers now view ETFs as core portfolio holdings, moving beyond their traditional use as short-term asset allocation tools, according to a research.
Commissioned by Carne Group, a provider of fund structuring, regulation and governance solutions, the research captured the views of European investors as the ETF industry marks its 25th anniversary.
The study highlighted a growing appetite for active ETFs, with nearly two-thirds of investors predicting a rise in their market share by the end of the decade. While active ETFs currently account for 2% of Europe’s total ETF assets, respondents expect this figure to climb to between 6% and 9% in the coming years.
One in four investors said they first entered crypto through ETFs, while over half report increased allocations to the asset class via ETFs. Furthermore, 13% of investors indicate plans to explore more esoteric assets through ETF structures.
Global ETFs draw $620.5bn in 2025 inflows
Despite this enthusiasm, concerns are emerging around the rise of so-called ‘shy active’ ETFs—funds that market themselves as active but closely mirror benchmark indices, offering limited deviation and low active share. Almost 90% of investors surveyed believe managers of such ETFs are misleading the market, according to the findings.
The researchers suggested a need for greater transparency and clearer labelling within the ETF space, as investors increasingly rely on ETFs for core holdings and alternative exposures.
Patrick O’Brien, managing director, business development at Carne Group, said: “Active ETFs will provide the momentum for the next stage of the ETF growth story to take flight. Unlocking the opportunity in this highly competitive space requires careful consideration and speed of execution which is why we are seeing managers increasingly partner with third parties. At Carne, we work with managers who want to establish their own ETF fund, as well as providing the management company underpinning many leading European ETF white label platforms.”
“We share concerns about the risk of ‘shy active’ ETFs which can be problematic for investors because they often operate under the guise of active management while closely hugging a benchmark index. Fund managers need to be sure they are transparent about the strategies they offer,” Patrick added.
Carne Group commissioned research company Pureprofile to survey 200 institutional investors and wealth managers across 10 European countries, representing $2.33 trillion in assets. The research was conducted in December 2024 and January 2025.
