Investors, market observers, and regulators raise questions about the competitiveness of the European ETF industry since the majority of the assets under management is held by a small number of ETF promoters. Respectively, the high concentration of the assets under management at the promoter level is seen as a threat for market efficiency. Generally speaking, I would agree with the statement that one needs to be concerned about the efficiency of a market when a few players are dominating this market, but I disagree with this thesis when it comes to the European ETF industry.
Graph 1 shows that the European ETF industry is highly concentrated at the promoter level since the 10 largest ETF promoters in Europe held between 93.44% (June 30, 2025) and 94.90% (December 31, 2019) of the overall assets under management in the analyzed period (December 31, 2013 – June 30, 2025). The average market share of the 10 largest promoters in the European ETF industry was 94.18% over the analyzed time period.
While the 10 largest ETF promoters in Europe had their highest market share at the end of December 2019, the lowest market share was marked on June 30, 2025. More generally, the market share of the 10 largest promoters by assets under management in the European ETF industry hovered around between 94.09% and 94.62% between December 31, 2013, and June 30, 2019, while reaching its top (94.90%) on December 31, 2019. Since then, the market share of the 10 largest ETF promoters was falling at a slow pace until reaching its current low on June 30, 2025.
Meanwhile, the assets under management increased from €287.3 bn to €2,198.9 bn over the same period. The number of ETF promoters with at least one ETF registered for sale in Europe increased from 50 to 63 despite some mergers of promoters over the observation period. In addition, one needs to bear in mind that some promoters which have been launched within the observation period, have disappeared before the end of the observation period. This means there has been some change with regard to the number of ETF promoters who are active in Europe.
Graph 1: Market Share (%) at the Promoter Level by Assets Under Management (December 31, 2014 – June 30, 2025)
Source: LSEG Lipper
Within an environment of increasing assets under management, the falling market share of the 10 largest ETF promoters might be a sign that the increasing number of ETF promoters in Europe is leading to more diversification on the promoter level and a resulting lower market share largest ETF promoter in Europe. This means that the competition between the ETF promoter in Europe is growing. This is especially true if one takes into account that rising markets are seen as favorable for large promoters with a (broad) generalist product offering.
In more detail, the 10 largest ETF promoter lost 0.91% market share over the course of the first half of 2025. iShares (-0.66%) was the ETF promoter which lost the most market share of the 10 largest ETF promoters in Europe over the course of the first half of 2025. It was bettered by Xtrackers (-0.23%), SPDR (-0.19%), and Invesco (-0.14%). Conversely, Vanguard (+0.13%) enjoyed the largest increase in market share of the 10 largest ETF promoters in Europe, followed by Amundi ETF (+0.11%) and BNP Paribas EASY ETF (+0.09%).
Graph 2 depicts iShares—the largest ETF promoter in Europe—accounts between December 31, 2013, and December 31, 2016, for more assets under management than the other nine of the 10 largest ETF promoters in Europe combined. June 2017 marked the first date at which iShares did not hold more assets under management than its top competitors combined and lost further ground up until June 30, 2025. Overall, iShares lost 7.80% of market share over the observation period, which means in turn that its competitors have been growing faster than the market leader by assets under management.
Despite the fact that the respective market share from iShares compared to the combined market share of the other nine promoters of the top 10 has declined over the analyzed time period, it has maintained a very dominant market position. In any other industry, such a high concentration would be concerning for regulators and clients, as this may lead to a monopoly or an oligopoly, which might bring prices up and/or product quality down.
Graph 2: Market Share (%) iShares vs the Combined Other Top Nine Promoters by Assets Under Management (December 31, 2013 – June 30, 2025)
Source: LSEG Lipper
In fact, the dominating position of iShares is so strong that it would require a merger of the next six largest promoters (as of June 30, 2025) to create a new rival for iShares as the most dominant player in the European ETF industry. Such a move, however, would create an even larger gap between the two-top ETF promoters and the rest of the European ETF industry, which would be even more concerning with regard to the competitiveness of the European ETF industry.
Rather than the aforementioned scenario, we see falling management fees and a very good quality of products when it comes to the tracking of the underlying indices in the European ETF industry. In comparison to their actively managed peers, it can be said that the European ETF industry looks way more competitive than the European fund industry overall. This is because actively managed funds experienced rather stable management fees, even as the concentration of assets under management on promoter level is way lower than in the ETF space. That said, the ongoing discussion about the value added by active management and the high fees charged by the asset managers, in combination with the rise in popularity of ETFs, seems to drive down the overall costs in this market segment. Especially as some of the promoters of actively managed funds have started to offer actively managed ETFs, which do have much lower fees than their mutual funds peers.
At the same time, the falling management fees for core market products in the European ETF industry are a concern for some market observers since they see the current fee levels for core products such as ETFs replicating the S&P 500 or the MSCI World as a barrier for entry for new ETF promoters in this segment.
Nevertheless, the high competitiveness of ETF promoters in Europe has led to a high product quality, driven by the expectations of professional fund selectors with regard to the quality of index tracking, service, management fees, and total expense ratios.
That said, one could argue that the competition in the industry drove prices down to a point where only asset managers with decently scaled products could earn money. Even worse, large ETF promoters could subsidize core products over a given time period to gain a competitive advantage over smaller promoters who might not be able to afford such a pricing policy. This is especially true for the so-called core markets, as these markets are by nature those markets which are attracting the most investor money. As a result, such behavior by the large ETF promoters can foster an increased concentration of the assets under management in the so-called core market segments, since new ETF promoters may rather launch niche products to avoid the competition with the market leaders in the core markets.
Nevertheless, new market participants are able to gather significant amounts of inflows at the ETF level, especially with innovative passive investment solutions for core and niche markets. That said, we are now seeing the rise of actively managed ETFs in Europe. Even as these products currently hold only a low percentage of the overall assets under management in the European ETF industry, there is a high number of promoters who are in the process of, or at least interested in, the launch of active ETFs in Europe. Even as only the future will tell if these products will be successful in Europe, active ETFs are seen as one of the major drivers of the future growth of the European ETF industry.
That said, JPMorgan has become the leading promoter for actively managed ETFs in Europe and has in this market segment currently an even more dominating market share than iShares in the overall market. Hence the growing market share of JPMorgan in the segment of actively managed ETFs might be one reason for the shrinking market share of the 10 largest ETF promoter in Europe.
In fact, JPMorgan held AUM of €409.0 mn at the end of Q2 2018 and was the twenty-third largest ETF promoter in Europe at that point in time. This changed after the company launched its first actively managed (research enhanced) ETF on October 10, 2018, as these products became the preferred choice of European investors in the segment of actively managed ETFs. With the increasing success of actively managed ETFs in Europe the assets under management of JPMorgan grew to €38.3 bn at the end of June 2025. As a result, JPMorgan is now the eighth largest ETF promoter in Europe.
Taking all this into consideration, it can be said that while the barriers to enter the market for new ETF promoters are rather low, it is common sense that the barriers to succeed in the European ETF industry are high. This means new ETF promoters need to have an in-depth understanding of the market and a clear strategy to succeed in this environment.
With all this in mind, it is quite clear that not all market participants will be able to survive in the competitive market environment within the European ETF industry. Therefore, it can be seen as a sign of the maturity of the market if an ETF promoter is absorbed by a competitor (like the recent takeover by AXA Investment Managers by BNP Paribas) or is going out of business. One example for the latter can be seen in the case of circa 5000, a European ETF promoter which launched its ETF business (six equity ETFs) in June 2023 and left the industry in August 2024.
As I said before, I am not concerned about the current concentration of the assets under management at the promoter level in the European ETF industry since it is clear that there is strong competition between the different ETF promoters. This is because European investors enjoy some advantages such as falling management fees or innovative products from this competition.
However, I also see that the competition around management fees allows for some creativity at the promoter level because the majority of ETF promoters have implemented securities lending programs to earn additional income. The latest example for this was State Street Global Advisors (SPDR), which introduced a securities lending program when it lowered the management fees for its S&P 500 products in 2023. Securities lending strategies are marketed as value-added strategies for investors because the promoters share the income from the securities lending with investors. Nevertheless, some of the revenue sharing models have come under scrutiny in the past, as they may have not been exactly in favor of the investor. From my point of view, however, it is questionable whether these kinds of strategies should be used within investment products that are sold to retail investors. This, however, is a topic which should be discussed in another article.
The views expressed are the views of the author, not necessarily those of LSEG.
This article is for information purposes only and does not constitute any investment advice.
