A view of the assets under management shows that the headline couldn’t be better chosen, as ETF promoters in the U.S. held $10,484.2 bn in assets under management (AUM) on April 30,2025, while ETF promoters in Europe held “only” $2,335.5 bn in AUM at the same date. Now, one can argue that the difference in the AUM is caused by the fact that the U.S. ETF industry is older than the European. Well, I think everybody involved in ETFs in Europe will be very happy when the European ETF industry reaches assets under management of more than $10 trillion within the next seven years—the first ETF in the U.S. was listed in 1993, while the first ETF in Europe started trading in the year 2000. That said, I don’t think that the ETF promoters in Europe will catch up with these numbers. Even as there are several reasons for this, there are main two reasons which are holding back the growth in Europe.
Graph 1: Assets Under Management in the U.S. and European ETF Industry – April 30, 2025 (in bn USD)
Source: LSEG Lipper
The first reason is what is counted as an ETF. While there are several legal structures—including some structures which are closer to a structured note than an ETF—which are seen as ETFs in the U.S. and therefore are contributing to the assets under management. Conversely, ETFs in Europe are products which are regulated under the mutual funds regulation and must comply with respective rules on diversification and/or eligible assets in most ETF domiciles. There are some exceptions with regard to precious metals, which can be used as underlying for an ETF in some domiciles. Instruments which do not comply to the respective fund regulations are normally structured as notes or similar instruments in Europe and are traded as exchange traded products (ETPs). As a result, these products do not contribute to the overall assets under management in the European ETF industry.
The second reason are the different tax treatments of ETFs and mutual funds in the U.S. The AUM in the U.S. ETF industry grew massively when U.S. investors started to move from active managed mutual funds to active managed ETFs, as these products have a tax advantage over mutual funds. Conversely, ETFs do not offer any tax advantage compared to mutual funds in Europe. Even the opposite is true in some states. For example, ETFs have a tax disadvantage compared to mutual funds in Spain.
Graph 2: Comparison of the Structure of the U.S. and European ETF Industry (April 30, 2025)
Source: LSEG Lipper
It might be surprising for some market observers that the number of listed products in the U.S. compared to Europe is somewhat similar. There are 4,152 instruments listed in the U.S., while there are 4,168 instruments listed in Europe. That said, ETF promoters use so-called convenient or additional share classes as enhancement to the actual ETF portfolio (the so-called primary) to attract investors with specific needs. That said, the launch of convenience/additional share classes is much more popular in Europe than in the U.S. Therefore, it is no surprise that there are 2,073 convenience/additional share classes in Europe, while there are only 69 in the U.S. Excluding the convenience/additional share classes from the ETF count shows that investors in the U.S. have a much broader choice when it comes to available investment strategies since they can chose from 4,083 different ETFs, while their European peers can only choose from 2,095 different ETFs.
Nevertheless, the average assets under management of an ETF in the U.S. at the end of April 2025 are more than twice as high ($2.57 bn) as in Europe ($1.11 bn).
Talking about choice, U.S. investors may have a larger choice when it comes to investment strategies, but European investors have a larger choice when it comes to different investment classifications. While the U.S. ETF industry is split into 139 different Lipper Global Classifications, the product offering in the European ETF industry is split into 177 Lipper Global Classifications.
It is no surprise that there are much more ETF promoters active in the U.S. (398) than in Europe (63), as the tax advantage for ETFs compared to mutual funds literally forced the promoters of mutual funds in the U.S. to start an ETF business to maintain their competitiveness. With regard to this, it might be surprising that the market concentration on promoter level in the U.S. compared to Europe is somewhat on the same level when it comes to the 10 largest ETF promoters. The 10 largest ETF promoters in the U.S. held 90.38% of the overall assets under management at the end of April 2025, while their European peers held 93.65% of the overall AUM. That said, while there is some competition for the leading position between largest two promoters in the U.S., the number one promoter in Europe held more AUM than the number two to number six combined.
I know, these are only a few facts to compare the U.S. with the European ETF industry and there are other factors that needs to be considered for a full industry review, but covering all topics would be too much for this kind of review.
This article is for information purposes only and does not constitute any investment advice.
The views expressed are the views of the author, not necessarily those of Lipper or LSEG.
