On April 11, 2000, the first two exchange-traded funds (ETFs) based on the EURO STOXX 50 and the STOXX Europe 50 were listed on Deutsche Börse in Germany. With this listing, Merrill Lynch International brought a product to Europe which had been established in the U.S. since 1993 and laid the foundation for the European ETF industry. In addition to Germany, the trading of ETFs also began in Sweden, Switzerland, and the U.K. over the course of the year 2000. Even as the first reactions to these new products were positive, no one at that time really expected the future

When the patent of Vanguard on ETF share classes expired on May 16, 2023, market observers and participants expected a significant number of new ETFs which are actual share classes of existing mutual funds since the promoters of active managed mutual funds may want to attract investors who are only using ETFs in their portfolios. Opposite to this expectation, the promoters of mutual funds in Europe have been rather shy in using this new feature to enhance their fund distribution strategies. Nevertheless, the use cases and advantages for ETF share classes are still valid and a further increase of the

February 2025 was another month with strong inflows for the European ETF industry. These inflows occurred in a volatile market environment in which investors around the globe acted nervous over any political and economic news. Investor sentiment was impacted by the discussions around tariffs by the U.S. president and potential tit-for-tat reactions from the markets which are the targets of the new tariffs. That said, the tariffs are seen as a kind of trade war between the U.S. and the rest of the world by some market observers. When it comes to this, investors were concerned about a political shift

Before the financial crisis occurred in 2008, the market share of the main replication methods used by ETF promoters in Europe was nearly evenly split between physical (full/optimized) and synthetic replication. That said, one needs to bear in mind that the vast majority of assets in the European ETF industry was invested in equity ETFs at this point in time. This changed in the aftermath of the financial crisis as European investors realized that a swap or other derivatives used for synthetic replication have a counterparty risk and, therefore, avoided ETFs which were using synthetic replication where possible. As a

November 2024 was another month with strong inflows for the European ETF industry. These inflows occurred in a positive market environment. While most equity markets were on the rise despite the high valuations of the market leaders over the course of the month, some bond segments faced the impacts from rising rates as yield curves have somewhat started to normalize. This might also be the reason why investors are somewhat nervous and reacting quickly on any news that may impact the current market environment negatively. That said, the election of Donald Trump as the next US president had a positive

Within the current market environment in the European ETF industry where the estimated net inflows are at a record high level and assets under management (AUM) are moving from one all-time-high to the next, one may think that it must be easy for ETF promoters to participate from the trend toward ETFs. Frankly speaking, nothing could be farther from the truth than such a statement. The European ETF industry is highly concentrated at the assets under management and the fund flows level. This means that the vast majority of assets are held by a small number of ETF promoters. The

There is currently a lot of noise around active ETFs in Europe. But is the trend toward active or semi-active ETFs really so strong or are all the headlines on this topic are just chasing attention? Generally speaking, the trend toward active/semi-active ETFs is visible as an increasing number of managers of actively managed mutual funds speak about possible launches of respective ETFs, while only a small number of these managers have launched an active/semi-active ETF so far. But how big is the market for active/semi-active at the moment? Is it really worthwhile that this market segment gets so much

August 2024 was another month with strong estimated net inflows (+€19.9 bn) for the European ETF industry. These flows were way above the rolling 12-month average (€17.0 bn) and confirmed the strong fund flows trend for the European ETF industry, which may lead to a new all-time high for estimated net inflows. If the current trend continues, the European ETF industry can expect estimated net inflows between €180.0 bn and €210.0 bn for the year 2024 overall. The inflows for August were driven by equity ETFs (+€14.6 bn), followed by money market ETFs (+€3.4 bn), bond ETFs (+€1.9 bn), commodities

July 2024 was another month with strong inflows for the European ETF industry. These inflows occurred in a positive market environment. Nevertheless, equity markets looked somewhat vulnerable given the high valuations of the market leaders. With regard to this, it is not surprising that investors are nervous and reacting quite fast on any news that may impact the current market environment negatively. This is not only true for economic news, as the geopolitical tensions in the Middle East, especially the developments around the Red Sea, are seen as a risk for the general economic growth in Western countries since a

Since the Sustainable Finance Disclosure Regulation (SFDR) is a topic of interest for all kinds of market participants and observers, it is worthwhile to shed a light on the current assets under management and the fund flow trends in the European ETF industry with regard to the SFDR.   Assets Under Management by SFDR Article With regard to overall structure of the European ETF industry, it is no surprise that the vast majority of the assets under management (€1,392.3 bn, or 76.74% of the overall AUM) was held by ETFs classified as article 6 compliant. Since the majority of ETFs

The European ETF industry enjoyed healthy inflows over the first half of 2024. Opposite to mutual funds, ETFs had estimated net inflows in every month so far. These inflows into ETFs occurred in a generally positive market environment. Nevertheless, equity markets looked somewhat vulnerable given the high valuations of the market leaders. With regard to this, it is not surprising that investors are nervous and reacting quite fast on any news that may impact the current market environment negatively. This is not only true for economic news, as the geopolitical tensions in the Middle East, especially the developments around the

May 2024 was another month with healthy inflows for the European ETF industry. These inflows occurred in a positive market environment. The positive investor sentiment was driven by some stronger than expected earnings for Q1 2024. Nevertheless, there were also some companies which didn’t meet the expectations of analysts and saw their stock prices declining respectively. These market reactions on lower-than-expected numbers showed how vulnerable the markets are. In addition, the geopolitical tensions in Middle East, especially the developments around the Red Sea, are seen as a risk for the general economic growth in Western countries since a number of