Why Europe’s ETF market is growing faster than the US
Europe’s ETF market is no longer simply following the US – it is growing faster, helped by how quickly investors are adopting newer, more sophisticated uses of the ETF wrapper.
In 2025, Europe’s ETF market expanded by more than 40%, outpacing growth in the US by almost 50%. That divergence reflects more than market size or product availability. It points to a shift in how European investors are using ETFs – not just as low-cost access tools, but as vehicles for income generation, selectivity and more outcome-oriented strategies.
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Where has the momentum come from?
The latest Thematic & Active Review from HANetf explores the forces behind this momentum. Included is a survey of European asset allocators and wealth managers, which suggests the shift is structural rather than cyclical, with ETFs now used not only for core exposure, but also for income generation, active management and targeted thematic allocation.
Income is a clear example. Almost all respondents view income generation as important or essential, with most targeting yields of 3-5%. In response, Europe’s options-based ETF market expanded rapidly during the year as investors sought strategies designed to monetise volatility and deliver more consistent income.
Easing access to more asset classes
Crucially, demand appears to be running ahead of supply. When asked which income strategies they would like to increase exposure to, wealth managers pointed to preferred shares and catastrophe bonds – asset classes that have historically been difficult to access efficiently.
In 2025, HANetf launched ETFs providing exposure to both instruments, illustrating how the ETF wrapper is increasingly being used to address niche investor demands rather than simply replicating traditional exposures.
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Exploring insights from industry experts
Beyond income, the Review also examines longer-term trends shaping European ETF growth through articles written by industry experts from around the world.
Topics included are:
- Canada and its investment potential
- Income options through covered call investing
- How the likes of gold, copper, uranium and more have fared throughout 2025
- The innovative active strategies now available via an ETF
- And much more…
Overall, the findings suggest Europe’s ETF growth is being underpinned by accelerated and increasingly purposeful adoption, explored in detail in the Review. Get your free copy now.
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