Morningstar publishes 'Guided Tour' of Europe's ETF market

Jonathan Boyd
Morningstar publishes 'Guided Tour' of Europe's ETF market

Morningstar has published the third edition of its "A Guided Tour of the European ETF Marketplace", which analyses trends in asset growth, product proliferation and investment stewardship.

This latest issue highlights a number of key developments, including:

  • AUM of European domiciled ETFs have more than doubled in the past five years to some €760bn as at the end of March 2019.
  • European domiciled ETFs account for some 8.6% of total AUM in European investment funds, up from 5.5% five years ago.
  • Assets in the sector could hit €2trn by 2024.
  • There is no end in sight to product proliferation
  • Actively managed ETFs still represent just 1% of assets.
  • Cost pressures are forcing ETF providers to consider smaller and cheaper index providers, and even self-indexing.
  • The biggest ETF providers in Europe are becoming incresingly active in the oversight role of the companies they invest in, however, stewardship approaches vary between poviders.

Hortense Bioy, director, Passive Strategies and Sustainability Research, Manager Research, said: "The well-entrenched trend of investor preference for low-cost investment solutions continues to support our positive outlook for the European ETF industry. Assets in European-domiciled ETFs are well on course to hit €1trn by 2020 and €2trn by 2024. In a market where product proliferation and price compression have become the norm, it is crucial that ETF investors do their due diligence. Looking beyond fees, understanding the index and evaluating the quality of the manager, not only based on its portfolio management techniques but also its stewardship practices, have never been so important."

Click here to see the full research.

Jonathan Boyd
Author spotlight

Jonathan Boyd

Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope.