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ETFs have become an opportunity impossible for asset managers to ignore. As the European exchange-traded fund (ETF) market turns 25 this year, we explore the growth story behind this disruptive trend. The last few years in particular have seen ETF investment soar, with 2024 marking a record year for inflows within the ETF market, drawing in €247 billion, outstripping the previous record of €159 billion in 2021. [1]
In what promises to be another bumper year for ETFs, Keeping Track uncovers the key trends and developments fund managers and institutional investors are forecasting. Drawing on our proprietary research undertaken for Change 2025, amongst other sources, we’ll explore the appetites from both fund managers and investors for ETFs, pinpoint what is fuelling the growth story, and assess how fund managers can capitalise on the opportunities emerging in this rapidly expanding space.
These findings are informed by 251 C-suite executives in fund management and 200 institutional investors we surveyed, collectively responsible for more than $4.6 trillion AUM, on their strategy for the year ahead.
Growth on the horizon:
Europe emerges as an epicentre for ETF growth with fund managers catering to an investor base demanding low cost, transparent and flexible products.
- Almost all (97%) of the equity and fixed income fund managers we surveyed say offering ETFs is important to the future longer-term prospects of their organisation, while almost two-thirds (69%) identify ETFs as a key driver for growth.
ETFs get active:
Active ETFs are fuelling the next stage of the growth story in Europe, offering tailored asset class exposure and with room for some excess market return.
- 58% of the investors we surveyed expect active ETF products to account for the majority of funds launched in the sector by 2026. Assets in European active ETFs totalled €54.4 billion by the end of 2024, up from €29.6 billion in 2023. Equity is the largest segment (€34.4 billion),
Getting to market:
The European ETF market is complex, fragmented and heavily regulated, and ETF issuers must navigate various hurdles to successfully launch an ETF. The trend toward outsourcing is creating a whole new ETF ecosystem.
- Almost two-thirds (64%) of those surveyed say they use third parties to help them select service providers such as administrators and custodians, while 63% use support to establish legal structures typically under UCITS.
Download Keeping Track for detailed insights into the drivers behind the ETF growth story, the surge in active ETFs, and the support options available to help managers capitalise of an opportunity they cannot afford to ignore.
As interest in private markets continues to grow, there is mounting pressure for asset managers to deliver products swiftly whilst addressing stringent regulations. It is a highly a complex landscape to navigate.
This is partly owing to the recent rapid expansion of the market. With total global assets under management expected to reach $13.01 trillion by July 2024, the market is evolving, as is the legislation that surrounds it. Whilst regulations are now designed to make it easier for investors entering Europe, it still takes time to understand all the finer details and avoid potential pitfalls along the way.
To better understand the pain points, Carne Group conducted a survey with US fund managers. Our fascinating new Atlas 2024 Report maps out the private market landscape, explores the US fund manager’s unique perspective and pinpoints their strategies for addressing the issues.
Our new Atlas 2024 report shines a light on the outlook for the different private markets, from the challenges facing private market fund managers in raising capital and their plans for addressing these, to looking at how wealth managers and DC pension schemes intend to invest in these markets.
Carne can provide the critical outsourcing solutions needed to steer the way through this complex landscape and has partnered with many private market fund managers accessing Europe for the first time or looking at new structures as we see the democratisation of private assets gaining more momentum.
As Europe’s leading third-party fund management company with over 20 years of experience, we offer a deep understanding of European fund regulations. Our expertise in governance, compliance and distribution can streamline your market entry, enhancing efficiency and reducing costs, whilst you remain in control. Talk to Carne if you would like to access European investors faster and with absolute confidence.
Download the Atlas 2024 report
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For expert insights on our Carne Atlas 2024 Report, see our Pinpoint of view series.
Change 2025
We surveyed 251 C-suite executives in fund management and 200 institutional investors, collectively responsible for more than $4.6 trillion AUM, on their strategy for the year ahead. The results? While there’s continued bullishness about asset growth, new markets, and new products - fund managers are under pressure to be more transparent in how they operate – for regulators and investors alike. That’s happening against a backdrop of economic pressures, tightening margins and fierce competition – all at a time when the complexity of going to market has arguably never been higher.
Supermodel
Insights from 200 global leaders on succeeding in today’s rapidly transforming industry. The asset management industry has been going through a super silent evolution. In recent years, product innovation has transformed the industry and how it operates. This has brought benefits and growth – but also costs and complexity.
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