The first $500 billion in assets took the European ETF market about 16 years to grow. The second $500 billion took more than three years. Eighteen months later, the next milestone is already in sight.
A deluge of inflows has swelled assets in the region’s exchange-traded product industry to $1.475 trillion, according to data compiled by Bloomberg.
If this year’s rate of growth is sustained, the market should top $1.5 trillion in August. Predictions it will pass $2 trillion by 2025 now look “conservative,” according to BlackRock Inc.
“The European market is now growing at a faster rate than that of the U.S.,” said Brett Pybus, head of iShares EMEA investment and product strategy at BlackRock.
Pybus puts it down to the region’s evolving wealth industry, a shift to sustainable investing and the growing adoption of fixed-income ETFs. For a market that’s long played second fiddle to the U.S., those factors are proving “transformational,” he said.
ESG Friendly
Overall flows into European ETPs total $108 billion so far in 2021 — easily on course to top the record full-year flows of $120 billion notched in 2019.
More than 40% of that new cash in 2021 has gone to products focused on environmental, social and governance standards.
