Active ETFs are emerging as the fastest-growing investment vehicle, with 37% of professional investors planning to increase allocations over the next 18 months, according to Fidelity International’s survey. Interest is stronger among intermediary investors, where 61% expect to boost exposure.
Despite surpassing $2 trillion in assets under management in 2024, the European ETF market remains underrepresented in active ETFs, which account for just 3% of the region’s total ETF assets, compared to 8% in the US, according to Morningstar. However, according to the survey, the European active ETF market surging from $38 billion to $64 billion over the past year.
The survey, conducted in partnership with Crisil Coalition Greenwich, found that 24% of professional investors already use active ETFs, with demand set to grow as investors seek cost efficiency, alpha generation, and access to specialist areas. It gathered insights from 120 institutional investors and intermediaries across Europe and Asia.
Active ETFs gain momentum as investors shift from mutual funds
“The anticipated growth in investor allocation to active ETFs reflects evolving preferences,” said Alastair Baillie Strong, global head of ETFs at Fidelity International. “Investors increasingly recognise that active ETFs combine the benefits of traditional active funds—flexibility and potential outperformance—with the advantages of ETFs, such as lower costs, transparency, and ease of access.”
The global ETF market will reach $20 trillion in assets under management by 2030, according to PWC, growing at a 17% compound annual rate, with active ETFs expected to expand at an even faster pace as investor adoption rises.
“We face ongoing market complexities, including high valuations and uncertainty,” Baillie added. “Given this backdrop, ETF selection is more critical than ever. Our active ETF strategy leverages our long-standing research capabilities to help clients navigate today’s macroeconomic and geopolitical risks while enhancing diversification and returns.”