Research in Finance has announced the release of the second annual edition of its European Active ETF Report, titled “Unlocking Growth in Europe’s Active ETF Market.”
The firm’s latest study builds on last year’s research and significantly expands its scope, incorporating insights from nearly 1,000 ETF users across Europe, including wholesale, institutional and end investors.
The report finds that active ETF adoption is now firmly established across Europe, with around 50 per cent of professional ETF investors currently allocating to or recommending active ETFs. While this remains below the near‑universal adoption of passive ETFs (approximately 90 per cent), the breadth of uptake demonstrates that active ETFs have moved beyond early adoption.
Importantly, growth potential remains substantial, the firm writes. Among investors not yet using active ETFs, a further 30 per cent expect to begin doing so this year, representing a significant pipeline of future demand.
Understanding the barriers preventing these investors from moving from intention to adoption will be critical for asset managers seeking to accelerate growth, Research in Finance says.
However, the research also highlights that usage depth remains limited. Most current users allocate only a small proportion of portfolios to active ETFs, compared with significantly higher penetration of passive ETFs. Addressing perceived barriers, including trading costs, limited fractional dealing and higher fees relative to passive products, will be essential to driving deeper adoption over time, the firm says.
Research in Finance conducted in‑depth end‑investor research in Italy, Germany and the UK, revealing that fewer than half of end investors who use ETFs currently invest in active ETFs. Awareness levels remain materially lower than among professional investors, and a meaningful proportion of respondents are “holdouts”, aware of active ETFs but not yet considering them.
For end investors, the most important factor influencing adoption is time and track record visibility, the research found. Unlike professional investors, retail users on self‑directed platforms often lack access to long performance histories due to regulatory constraints, slowing confidence‑building in the structure.
As a result, adoption is likely to be slower in the retail market. However, this only heightens the importance of action today.
The report concludes that asset managers cannot rely solely on track records to drive future growth. Building brand recognition, clearly articulating investment beliefs and establishing credibility in the end‑investor ETF market today will be critical to capturing demand as familiarity and confidence increase.
Contrary to common perceptions, the study finds that institutional investors are already engaging with active ETFs at similar rates to wholesale investors, albeit with relatively small allocations. While active ETFs often replace active mutual funds, the research also reveals that a significant proportion of institutional investors are replacing passive ETFs with active ETFs, expanding the opportunity set.
This finding confirms that active ETFs are not merely a substitution vehicle, the firm says, adding that, instead, they represent a way for asset managers to compete for new assets, expand market share and rethink product design, pricing and distribution strategies as the market evolves toward 2026 and beyond.
