When exchange-traded funds (ETFs) were introduced in Europe in the year 2000 it was hard to predict that these products would write an unbroken success story for more than 20 years. This becomes especially true when one is taking into account that the last two decades saw so many so-called “black swan events” in the financial markets—like no other period before—and each of these events had the power to derail the ETF industry from their growth track. But ETF assets increased during rough market periods—times during which common sense would dictate that active managers would have an advantage over passive

Investors, market observers, and regulators always raise questions about the competitiveness of the European exchange-traded fund industry since the assets under management seem to be concentrated among a few ETF promoters. Generally speaking, I would agree with the statement that one needs to be concerned if a few players are dominating a market, but not with regard to the European ETF industry. Graph 1 depicts the fact that the European ETF industry is highly concentrated at the promoter level since the 10-top promoters in Europe held between 93.07% (June 30, 2016) and 92.78% (June 30, 2020) of the overall assets