How are active ETFs reshaping the European investment market?
With the active ETF market in Europe set to hit US$1 trillion by 2030, driven by the adoption of innovative "active core" and "high-conviction active" ETFs, Michael John (MJ) Lytle, Head of Product Innovation, outlines the importance of aligning offerings with investor needs to unlock the growth potential in this dynamic sector.
3 minute read
Key takeaways:
- The European active ETF market has more than doubled in size since early 2024, surpassing US$70 billion in assets under management, with a significant portion of professional investors expecting this sector to reach US$1 trillion by 2030.
- Active ETFs are gaining traction globally, with half of all ETF launches in the first half of 2025 being active, highlighting a global shift towards active investment strategies.
- “Active core” ETFs are leading adoption in Europe, viewed by many investors as replacements for passive index exposures, while “high-conviction active” ETFs, which focus on concentrated portfolios through deep research, are seen as potential alternatives to traditional mutual funds.
The active ETF market in Europe is on track to reach US$1 trillion by 2030, according to 42% of professional investors surveyed in new research commissioned by Janus Henderson.1 The investors surveyed collectively manage US$800 billion of assets.
How fast is the European active ETF market likely to grow?
The European active ETF market surged past US$70 billion in assets under management this summer, more than doubling in size since the start of 2024. Active ETFs still only make up 2.7% of the European ETF market, but 74% of professional investors expect this share to hit 5% by the end of next year.
Globally, the pace of growth in the active ETF sector is striking. In the first half of 2025, half of all ETFs launched globally were active according to industry consultancy ETFGI. Looking ahead, nearly 60% of survey respondents expect most ETF launches in 2026 to be active.
“Half of professional investors expect 10% of their ETF allocation will be in active strategies by next year. This is a step change for the industry as a whole and has the potential to meaningfully benefit investors in terms of efficiency and liquidity.”
– Michael John (MJ) Lytle, Head of Product Innovation.
Why are “active core” ETFs proving popular?
So far, adoption in Europe has been led by “active core” ETFs, which have a low tracking error to a benchmark and often focus on research enhanced index-based strategies. Most of the investors surveyed (72%) see these ETFs as replacement for their existing index-based passive exposures.
In contrast, uptake of “high-conviction active” ETFs, built on deep fundamental research to develop more concentrated portfolios, has so far been slower. However, 66% of respondents see high conviction active ETFs as potential replacements for traditional mutual fund exposures, suggesting significant runway for growth.
How are investor allocations to active ETFs evolving?
When survey respondents were asked how they see fund allocations to active ETFs changing over the next 12 months, the vast majority (96%) noted that these will increase by between 25% to 75%. The anticipated increases suggest growing confidence in active management strategies. These strategies seek to capitalise on the expertise of fund managers to navigate complex market environments and achieve superior risk-adjusted returns.
This trend underscores the growing importance of active ETFs in modern investment portfolios. As investors continue to seek ways to optimize their portfolios, active ETFs are poised to play a pivotal role in their investment strategies over the coming year.
Why do fixed income and equities lead asset exposure via active ETFs?
A significant 80% of respondents reported having exposure to fixed income via active ETFs while 58% of respondents use active equity ETFs. The survey results underscore a strategic utilisation of active ETFs for achieving diversified investment portfolios.
The prominence of fixed income indicates a strong inclination towards stability and income, while the engagement with alternatives (55%) suggests openness to innovative investment avenues. These insights can inform future asset management strategies and active ETF product offerings, aligning them with investor preferences and market dynamics.
Why is it important to align ETF offerings with investor needs?
The most dynamic innovation in the ETF space is on the active side. But unlocking the full potential will require products that closely align with what investors are seeking. We believe a well-designed suite of insight-led active ETFs, offering both core and high-conviction exposures, has the potential to bring the best of active management to investors with the efficiency and liquidity of the ETF structure.
1Source: Janus Henderson Investors commissioned the market research company Pureprofile to interview 100 professional investors working for pension funds, family offices, wealth managers, insurance asset managers in the UK, Germany, Switzerland, Italy, France, Sweden, Norway and Finland with a total of US$781.5 billion assets under management. The research was conducted in June 2025.
Active investing: An investment management approach where a fund manager actively aims to outperform or beat a specific index or benchmark through research, analysis, and the investment choices they make. The opposite of passive investing.
Exchange traded fund (ETF): A security that tracks an index, sector, commodity, or pool of assets (such as an index fund). ETFs trade like an equity on a stock exchange and experience price changes as the underlying assets move up and down in price. ETFs typically have higher daily liquidity and lower fees than actively-managed funds.
These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. References made to individual securities do not constitute a recommendation to buy, sell or hold any security, investment strategy or market sector, and should not be assumed to be profitable. Janus Henderson Investors, its affiliated advisor, or its employees, may have a position in the securities mentioned.
Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.
The information in this article does not qualify as an investment recommendation.
There is no guarantee that past trends will continue, or forecasts will be realised.
Marketing Communication.
3 minute read
Key takeaways:
- The European active ETF market has more than doubled in size since early 2024, surpassing US$70 billion in assets under management, with a significant portion of professional investors expecting this sector to reach US$1 trillion by 2030.
- Active ETFs are gaining traction globally, with half of all ETF launches in the first half of 2025 being active, highlighting a global shift towards active investment strategies.
- “Active core” ETFs are leading adoption in Europe, viewed by many investors as replacements for passive index exposures, while “high-conviction active” ETFs, which focus on concentrated portfolios through deep research, are seen as potential alternatives to traditional mutual funds.
