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Ireland’s ETF assets under management surpass EUR1 trillion

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Marie Coady, Tax Partner at PwC Ireland, has noted that Irish domiciled ETFs’ assets under management has surpassed the EUR1 trillion threshold for the first time at the end of June 2023, according to recent Morningstar data. 

This is a significant milestone which reinforces Ireland as the leading ETF domicile in Europe and, indeed, the second largest domicile of ETF assets in the world, she writes.  

The ETF industry in Ireland has continuously grown since 1990, with the past six years in particular witnessing a tripling of AuM from EUR362 billion in 2017 to EUR1 trillion in 2023, representing a CAGR of over 20 per cent over that period. 

Ireland has established itself as the European centre of excellence for ETFs and consolidates its leading position in Europe, with 68 per cent of the European ETFs’ AUM as of 30 June 2023 according to Morningstar, Coady says.

“Ireland’s attractiveness for ETFs is driven by its access to a large pool of unrivalled ETF expertise and experience with 17,000 English speaking funds professionals who have been servicing funds, including ETFs, for over 30 years. 

“Ireland is in the unique position to provide all of the services an ETF may need, ranging from fund administration, transfer agency and depositary to legal, tax and audit services, as well as stock exchange listing, distribution, authorised participants, compliance and consultancy services. The large and comprehensive Irish ecosystem of ETF service providers keeps investing in their capabilities to cater to the specific needs of ETFs. In addition, Ireland benefits from a strong and stable regulatory environment. With Ireland’s EU membership and the global passporting opportunities afforded to UCITS products now distributed in over 90 countries, ETF issuers are afforded a platform upon which to build a successful distribution strategy. 

“In addition, Ireland’s access to a large network of favourable tax treaties, including with the US which affords Irish ETFs reduced treaty rates of withholding tax on US securities, also constitutes a key element of its attractiveness for ETF issuers.”

Coady says that the popularity of ETFs as an investment solution continues to be on the rise and growth rates experienced over recent years are expected to continue. “Our recent global ETF survey report, ETFs 2027: a world of new possibilities, revealed that the majority of the ETF managers in our survey expect that global ETF AuM will increase to USD15 trillion or more by June 2027. Broader investor adoption in developed markets and distribution into new and emerging markets are  expected to be the main drivers underpinning the continued expected growth. Ireland, with funds authorised for distribution in over 90 countries, is ideally placed to offer ETF issuers the ability to tap into the opportunities in new and emerging markets.”

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