A lot has been said about the growth of actively managed ETFs in Europe, and literally no week passes by in which we don’t hear that a new promoter will enter the European ETF industry with an active ETF. In addition to this, there are also a lot of market comments talking about the rise of actively managed ETFs in the U.S., declaring that the respective growth pattern might be the blueprint for the growth of active ETFs in Europe.
As a neutral market observer, I can say that this won’t be the case, since actively managed ETFs have a tax advantage for investors compared to actively managed mutual funds in the U.S. This tax advantage does not exist in Europe, which means that there is no incentive on the surface, which could drive investors into exchange traded funds instead of mutual funds.
Obviously, one can argue that actively managed ETFs are in general much cheaper than actively managed mutual funds. This argument is true, but it may turn out that European investors are less concerned about fees and expenses than one may think.
As Graph 1 shows, the growth in assets under management in actively managed ETFs in Europe started strong over the course of the year 2023, when the assets under management grew by €8.6 bn, or 37.12%, from €23.3 bn at the end of the year 2022 to €31.9 bn at the end of 2023. The growth of assets under management over the year 2024 showed the highest percentage growth rate in the recent history (70.79%) of actively managed ETFs in Europe. 2025 marked another year with an exceptional growth rate for actively managed ETFs in Europe, as the assets under management grew by €29.2 bn, or 53.46%, over the course of the year.
Even the rough market environment over the course of the first four months of 2026 couldn’t stop the growth of actively managed ETFs, as the assets under management increased from €83.7 bn at the end of December 2025 to €99.9 bn at the end of April. In turn this means that the assets under management in actively managed ETFs grew by €16.2 bn, or 19.41%, over the course of the first four months of the year.
Graph 1: European ETF Industry – Assets Under Management in Active ETFs – December 31, 2019 – April 30, 2026 (in bn EUR)
Source LSEG Lipper
Since the growth in assets under management can be mainly driven by the performance of the underlying markets, the estimated net flows might be a better indicator to evaluate whether or not there is a trend toward actively managed ETFs in Europe.
Graph 2 shows that the annual fund flows confirm the assumptions made above, since the estimated net inflows into actively managed ETFs started to increase at a high pace over the course of 2023 (+€6.7 bn) and continued to grow year after year from there.
Graph 2: European ETF Industry – Estimated Annual Net Flows in Active ETFs – December 31, 2019 – April 30, 2026 (in bn EUR)
Source LSEG Lipper
For 2026 it looks like this pattern repeats itself, as the estimated net inflows into actively managed ETFs for the year so far stood at €12.0 bn at the end of April 2026, which means if the flow trend for the year continues the estimated net inflows may reach a new record at around €36.0 bn at the end of 2026.
An additional analysis which shows if there is real demand from European investors for actively managed ETFs is the analysis of the estimated net inflows into newly launched ETFs in this market segment. We analyzed this flow pattern in the LSEG Lipper European ETF Industry Yearbook 2026 and came find that the increasing number of newly launched actively managed ETFs between 2023 and 2025 is leading to increasing estimated net inflows into these newly launched products. Hence, there is a real demand for the newly launched ETFs, which also confirms that there is a strong trend toward actively managed ETFs in Europe.
With regard to this, it can be said that there is a real trend toward actively managed ETFs visible in the European ETF industry. But given the market size and the lack of tax incentives, the overall growth of actively managed ETFs in Europe might be much lower than in the U.S.
The LSEG Lipper European ETF Industry Yearbook 2026 can be downloaded on Lipper Alpha Insight (click here).
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.
