The assets under management in the European ETF industry are highly concentrated at the classification level. Even as one would expect that the AUM are concentrated at the classification level since this reflects the asset allocation views of the investors—which are, in general, rather somewhat streamlined than widely diverging—the level of concentration might be surprising. The 10 largest Lipper classifications by assets under management accounted for €1,737.2 bn, or 67.38%, of the overall AUM in the European ETF industry at the end of December. The 16 classifications which held each more than 1.00% of the assets under management accounted for €1,937.5 bn, or 75.15%, of the overall AUM. This means in turn, that the other 169 Lipper classifications, available to European ETF investors, held only €640.8 bn, or 24.85%, of the overall assets under management.
The largest Lipper global classification, Equity U.S., held 23.99% of the overall assets under management at the end of December 2025. The second largest classification, Equity Global, held 18.61% of the overall AUM, Equity Europe held 8.41%, Equity Emerging Markets Global 4.89%, and Bond EUR Corporates 2.33%. Given the fact that Equity U.S. and Equity Global are somewhat core asset classes in the portfolios of European investors, one could argue that this level of concentration seems to be normal since these two classifications may represent two of the largest building blocks in the portfolios of European investors. If the assumption that European investors are using ETFs as building blocks for their core exposures were true, other core asset classes such as Equity Europe should also hold high assets under management. This means that ETFs investing in European equities do not play a major role in the portfolios of European ETF investors, despite the relatively strong inflows.
That said, one needs to bear in mind that a high number of investors follow one of the major global equity indices regarding the asset allocation of their portfolios. This implies that Equity U.S. should be by far the largest classification, as it is the largest region in all market capitalization weighted indices, followed by Europe.
Graph 1: Lipper Global Classifications Holding More Than 1% of the Overall Assets Under Management, December 31, 2025 (Euro Billions)
Source: LSEG Lipper
This means that the high concentration of assets under management in the European ETF industry can be considered normal when it comes to the market share of Equity U.S. and Equity Global as leading Lipper classifications in the European ETF industry.
Nevertheless, one might be surprised that ETFs classified as Equity Emerging Markets Global play such an important role in the European ETF industry since emerging markets are normally considered as inefficient markets where active fund managers should be able to outperform the market (indices). The same is true for Bond EUR Corporates and Equity Sector Information Technology.
Even as it is to be expected that the market share of these three classifications might be driven by market trends and might therefore be a subject to change in the future, one can assume that some European investors prefer to implement their exposure to non-core asset classes via passive instruments. In other words, one may conclude that these European investors prefer the pure beta of these asset classes over a possible outperformance. In addition, these investors may like also the transparency and intraday liquidity of ETFs, as this means they know what they hold in their portfolios and can react immediately to any events in the respective markets.
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.
