The European ETF market has grown steadily and now boasts approximately $511bn AUM. Industry participants expect asset growth to accelerate by approximately 27% annually over the next five years.
Having benefited from an evolving regulatory environment and lowering barriers across individual markets, several additional factors are expected to drive growth over the next five years.
The expansion of robo-advice and online platforms in particular is likely to play a key role in the growing use of ETFs by European retail investors. Investor education also continues to be another important factor driving this growth.
Structural changes in the way advice is delivered have helped to expand the use of ETFs in European markets.
This momentum has been boosted further by regulations such as the retail distribution review (RDR), which is causing distribution models to shift away from commissions.
Almost two thirds of European survey participants say these particular initiatives have had a positive impact on ETFs in their market, while the other one third indicate that it is too soon to measure.