European asset managers are increasingly adopting actively managed exchange-traded funds (ETFs) as they face pressure from low-cost passive options and changing investor expectations. This shift aims to rejuvenate product lines and remain competitive. Active ETFs are growing in popularity, projected to reach USD 54 billion by the end of 2024, driven by investor desires for liquidity and transparency. Despite modest institutional adoption, many large investors are considering their integration into portfolios amid lingering concerns over costs and performance. Legislative changes in Luxembourg may enhance attractiveness and stimulate growth in this sector, projected to exceed USD 4.5 trillion by 2030.
European asset managers are pivoting towards actively managed ETFs to stay relevant amidst competition from passive investment vehicles and evolving investor preferences.
The growth of active ETFs responds to the weakening demand for traditional mutual funds, with assets projected to double by 2025.
Active ETFs provide a solution for asset managers looking to enhance their offerings, thereby improving liquidity, transparency, and potential alpha in uncertain markets.
Despite concerns about cost and performance consistency, many European investors are considering incorporating active ETFs into their portfolios.
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