There's no stopping ETFs

2024 should be a record year for ETFs, especially in Europe, where inflows should be better than in 2021, the benchmark year which was exceptional.

ETFs continue to win over investors

MarketScreener regularly reports on the growing popularity of ETFs. Products can be found for virtually any investment theme. Witness the capital-guaranteed funds mentioned last week, which make equity investing as personalized as you like. The success of these products can also be attributed to the upward momentum of the markets over the past two years, the low cost of these products and their ease of access, for example through online banking. These factors are whetting the appetite of retail customers, and appealing in particular to young people. There are also a growing number of ETF producers: 60 of the world's top 100 asset managers offer ETFs.

In Europe, ETFs exceed EUR 2,000 billion in assets under management

Recent figures from Morningstar confirm the positive trend for ETFs. In October, the European ETF market took in EUR 27.3 bn, the most prolific monthly total ever recorded. And that's not all. Total net inflows since the beginning of the year have risen to 188.3 billion euros, 30 billion euros more than the record set in 2021. So, barring any last-minute reversals, 2024 will be a record year for European-domiciled ETFs.

These figures enable the European ETF market to break through the EUR 2,000 billion mark in assets under management for the first time. The vast majority (71%) are invested in equities, followed by bonds (21%). Taking all categories together, most ETFs are domiciled in Ireland (78%), obviously for tax reasons.

The European ETF market has exceeded EUR 2,000 billion (source: Morningstar).

What's the global picture?

According to a PwC report, worldwide ETF assets under management will total $11,500 billion by the end of 2023. Growth is set to continue at a sustained pace in the future: the global market could reach $19,200 billion by 2028.

However, market growth is not expected to be the same across the globe. In North America, active management products are expected to flood the market, supported by the fact that more and more managers are willing to put their know-how at the service of these products. In Europe, the market is likely to be driven more by ETFs containing sustainable criteria (ESG).