When comparing the European ETF industry with the U.S. ETF industry it is clear that one is looking at two very different markets. The first and most important difference is the market structure. While the U.S. is a single market, Europe is split up in many different markets inside and outside the European Union (EU). Nevertheless, ETFs are the fastest growing market segment in the fund industries on both sides of the Atlantic.
Assets Under Management
It is common sense that the U.S. ETF industry ($13,651.1 bn) is much larger when it comes to assets under management (AUM) than the European ETF industry ($3,063.2 bn). Therefore, any comparison between the two markets should be made on a relative basis. As graph 1 shows, actively managed ETFs ($1.798.6 bn) held 13.18% of the overall AUM in the U.S. ETF industry, while their peers in Europe ($104.9 bn) held only 3.42% of the overall assets under management.
These numbers show that active ETFs may have reached the investing mainstream in the U.S., since it looks like a wide range of U.S. investors are using active ETFs in their portfolios. This gets even clearer if one is looking at the market share of the estimated net inflows (graph 2). Conversely, active ETFs seem to be in their infancy in Europe. That said, one needs to bear in mind that the trend toward actively managed ETFs in the U.S. started several years before the trend in Europe.
Graph 1: Market Share of Overall Assets Under Management by Management Approach (in %), March 31, 2026
Source: LSEG Lipper
This leads to the question of whether the trend from the U.S. can be used as blueprint for the future of actively managed ETFs in Europe.
Will Actively Managed ETFs in Europe Follow the Growth Pattern of Their U.S. Peers?
The answer to this question is no and the reason for this is quite simple. While actively managed ETFs have a tax advantage over actively managed mutual funds in the U.S., such an advantage does not exist in Europe. Even worse, in some European jurisdictions ETFs have a tax disadvantage compared to mutual funds. This might pose a hindrance for the future growth of ETFs in these countries. In other words, a large portion of the estimated net flows into actively managed ETFs in the U.S. were and still are driven by the fact that U.S. investors are optimizing their portfolios when it comes to potential tax payments.
In addition to this, one needs to bear in mind that the market structure of the two markets regarding fund distribution is quite different since the fund distribution in Europe is still dominated by the payment of commissions and other inducements. These kinds of payments are generally not used in the U.S. ETF industry., U.S. investors are used to paying service fees to their advisors.
With regard to the above, it is quite clear that the growth of actively managed ETFs in Europe will not reach the growth numbers of the U.S. but is on track to become one of the major growth drivers for the overall ETF industry.
The Market Share of Actively Managed ETFs of the Overall Estimated Net Flows in ETFs is Growing
Graph 2 shows that the market share of the overall estimated annual net flows of actively managed ETFs in the U.S. jumped up from 6.47% for the year 2016 to 10.46% over the course of 2017. After this, the market share of actively managed ETFs in the U.S. slowed down over the course of 2018 (9.39%), a level never seen again since, as actively managed ETFs grew their market share to 40.00% of the overall inflows into ETFs in the U.S at the end of Q1 2026.
Conversely, actively managed ETFs in Europe showed rather weak growth numbers. In fact, actively managed ETFs had two years with slight outflows (2018 and 2020) during the observation period. The first significant increase in the market share of the overall estimated annual net flows of actively managed ETFs in Europe was seen in the year 2023, when market share jumped up from 0.63% at the end of the year 2022 to 4.29% at the end of 2023. Nevertheless, the market share of actively managed ETFs has more than doubled (8.77%) until the end of the year 2025. This shows that actively managed ETFs are also a growth driver in Europe, even as the estimated net flows have slowed down a bit (7.93%) over the course of Q1 2026.
Graph 2: Market Share of Overall Estimated Net Flows in ETFs by Management Approach (in %), March 31, 2026
Source: LSEG Lipper
This means that the adoption of actively managed ETFs by investors in Europe is slower than in the U.S. As mentioned previously, the faster growth in the U.S. is caused by a tax advantage for ETFs in the U.S. That said, another phenomenon which can be seen in the U.S. is that investors may sell their actively managed mutual funds and buy ETFs, hence the inflows into actively managed ETFs may mainly come from switching existing investments. This means these flows are not contributing to the overall growth of the U.S. fund industry. Generally speaking, this pattern seems currently not to be the case for actively managed ETFs in Europe
When it comes to the above, it is fair to say that actively managed ETFs have become successful and are growth drivers within their respective industries. That said, it looks like actively managed ETFs have become a staple for U.S. investors, while they are still somewhat niche products in Europe. From my point of view this is obviously a subject of change, as a more detailed fund flow analysis shows that European investors are demanding actively managed ETFs (Please see our ETF Yearbook 2026 for an in-depth analysis of the segment of actively managed ETFs in the European ETF industry).
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.
