Industry Insights - Beyond the ETF: Building the Route to the European Investor

Europe’s ETF market is entering a new phase. Assets continue to grow, active ETFs are gaining momentum and investors are becoming increasingly comfortable using ETFs as core building blocks of portfolios. For asset managers, however, the opportunity is no longer simply about bringing an ETF to market. It is about building the route from product launch to investor adoption.

This creates an opportunity for two groups in particular: established European asset managers with successful mutual-fund ranges looking to enter the ETF market, and global managers that already have ETF capabilities but have yet to establish a European ETF presence.

For both, Europe offers significant potential. But success requires more than a strong investment proposition. It requires the right fund structure, capital-markets infrastructure and most importantly, access to distribution across European markets.

Europe’s ETF Opportunity is Changing

The European ETF market has moved beyond €3 trillion in assets, reflecting the rapid development of ETFs as a mainstream investment vehicle. At the same time, the market is becoming more diverse, with active strategies, fixed income and more sophisticated portfolio solutions expanding the role ETFs can play.

A traditional mutual-fund manager entering ETFs is not simply launching another share class. The ETF requires a different operating model, different capital-markets relationships and a different approach to distribution and investor engagement.

For global managers that already have established ETF capabilities, the opportunity is different again. The investment proposition may already be proven, but entering Europe means adapting that proposition to the UCITS framework and establishing the infrastructure and distribution relationships required to gather assets across European markets.

In both cases, the challenge is the same: how do you turn a successful investment strategy into a successful European ETF business?

Active ETFs Broaden the Opportunity

Active ETFs are playing an increasingly important role in answering this question.

Europe has seen a rapid expansion in active ETF launches, as managers use the ETF structure to deliver differentiated investment strategies with the transparency, liquidity and accessibility investors expect. Assets in Europe-domiciled active ETFs reached €78.8 billion at the end of 2025, up from €52.5 billion a year earlier and nearly three times their level two years previously1. However, they still remain a relatively small proportion of total ETF assets.

The opportunity extends across the investor landscape.

Retail investors are becoming more comfortable accessing sophisticated strategies through ETFs. Advisers and wealth platforms are incorporating ETFs into model portfolios and broader portfolio solutions. Institutional investors are also using active ETFs in areas where the structure can offer operational or liquidity advantages.

That makes the active ETF opportunity particularly relevant for established asset managers. A European manager with a successful mutual-fund strategy may already have the investment capability, brand and distribution relationships. The ETF can provide another route to market and another distribution channel to reach investors.

For global managers, meanwhile, an established ETF range can provide a strong starting point for European expansion.

But the product itself is only one part of the equation.

Launching the ETF is Only the Beginning

The European ETF market is becoming broader, whilst also more competitive.

Getting the fund structure right is essential, but so is everything that happens around it. The choice of domicile, trading venues, authorised participants, market makers, custody and settlement arrangements and distribution relationships all influence how effectively an ETF can gather assets after launch.

This is particularly important for managers entering Europe for the first time.

An ETF can have an excellent investment proposition and still struggle to build scale if investors cannot access it efficiently, if trading liquidity is weak, or if the product is not connected to the platforms, advisers, banks and wealth channels through which European investors increasingly invest.

The implication is straightforward: distribution should be considered at the point of launch, not after it.

Distribution is the Next Competitive Advantage

European ETF growth is creating a much wider distribution opportunity.

Unlike a single-market strategy, a European ETF can potentially reach investors across multiple countries through a combination of exchanges, fund platforms, private banks, wealth managers, advisers, digital investment platforms and institutional channels.

That breadth matters. For an international asset manager, the opportunity is not simply to secure a listing or enter one market, but to build a distribution strategy that can scale across Europe. Germany, Italy, France, Netherlands, Switzerland, United Kingdom and the Nordics each offer distinct investor bases, distribution structures and opportunities. Reaching these markets effectively requires local market knowledge and the right partnerships.

The result is a more connected proposition: distribution generates investor demand, while capital-markets infrastructure determines how efficiently that demand is translated into trading and assets.

For managers entering Europe, having both capabilities aligned can therefore be a meaningful competitive advantage.

Ireland: the Established ETF Ecosystem

Ireland is already at the centre of this European ETF ecosystem.

Irish-domiciled ETFs account for more than 70% of European ETF assets, with Ireland’s position supported by its established UCITS framework, deep ETF servicing infrastructure and extensive international distribution network. Irish-domiciled funds are distributed into more than 90 countries.

The scale of Ireland’s ETF ecosystem matters because it provides more than a domicile.

Managers entering the European ETF market can access an established network of specialist Legal Advisers, administrators, custodians, depositaries, market participants and professional service providers with deep experience supporting ETFs.

That creates an important advantage for both types of manager considering European expansion.

For a European mutual-fund manager moving into ETFs, Ireland provides an established environment in which to build a European ETF range.

For a global ETF manager entering Europe, it provides an established UCITS ETF ecosystem from which to develop a broader European distribution strategy.

Ireland can therefore function not simply as the place where the ETF is domiciled, but as a launchpad for wider European distribution.

Germany Demonstrates the Next Distribution Opportunity

The next phase of European ETF growth will also be shaped by how investors access long-term savings.

Germany’s pension reform is a particularly significant development. From 1 January 2027, the new Altersvorsorgedepot framework will allow savers to invest through a broader range of capital-market products, including funds and ETFs.

The reform has the potential to create a significant new channel for long-term investment and is already attracting attention from asset managers, banks, brokers and digital investment platforms. The Financial Times has reported estimates of up to €40 billion of annual capital-market inflows under the new framework.

The significance extends beyond Germany. It demonstrates how changes in savings policy, investor behaviour and distribution infrastructure can create new opportunities for ETF providers. For international asset managers, the lesson is that identifying the product opportunity is only half the task. Understanding how investors will actually access that product is becoming equally important.

Helping Managers Connect the Pieces

For asset managers entering or expanding in Europe, the challenge is rarely a lack of investment capability. It is connecting that capability to the infrastructure, market access and distribution required to reach investors at scale.

That is where Universal Investment can play a role: helping managers bring the different elements together across the European investment ecosystem.

From fund structuring and implementation through to administration, capital-markets infrastructure and distribution, the objective is to create a more connected route from product launch to investor access.

For a traditional asset manager moving from mutual funds into ETFs, that means connecting an existing investment franchise with the infrastructure and market access required for a new product format.

For a global ETF manager entering Europe, it means connecting established ETF capabilities with the European fund, capital-markets and distribution ecosystem needed to scale them.

And as managers expand across European markets, the objective is to create a scalable route to market rather than a collection of disconnected country strategies.

The Next ETF Advantage

Europe’s ETF opportunity is no longer defined solely by who can launch the best product.

Investment capability will remain fundamental, but as the market becomes more competitive, the ability to connect that capability with investors across Europe will become increasingly important.

For European mutual-fund managers entering ETFs, the challenge is to translate existing investment franchises into a structure and distribution model suited to the next generation of investors.

For global ETF managers entering Europe, the challenge is to take established ETF capabilities and build the European infrastructure and distribution footprint needed to scale them.

Ireland provides a strong foundation for both.

Its established ETF ecosystem, UCITS expertise and international distribution reach make it a natural launchpad. But the next advantage will come from connecting that foundation to the wider European investor opportunity across retail, wealth and institutional channels and across multiple markets.

The ETF is the product. The route to the investor is the strategy.

1Morningstar, European Active ETFs Hit 78 Billion Euros as Assets Triple in Two Years