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European ETF survey from Quantalys Harvest Group and BNP Paribas AM finds significant growth

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The Quantalys Harvest Group Survey on ETF Management, in partnership with BNP Paribas Asset Management, has published its European overview of the ETF market.

In 2023, ETFs saw a significant increase, in relative terms, from 6 per cent of all funds managed in Europe 10 years ago to nearly 16 per cent at the end of 2023, confirming the growing interest of investors in this asset class, the firm writes. 

In terms of inflows and performance, 2023 was a solid year with +EUR141 billion, making it the second-best year after 2021.  

Key findings  

More investors are interested in ETFs, which have historically been popular with institutional clients, the firm says. 2023 was one of the best years in terms of inflows, showing that investors with a variety of profiles are increasingly integrating ETFs into their portfolio allocations: private banks, family offices, financial advisers and retail investors through digital platforms. 

Thematic ETFs are increasingly attractive, the report finds. More than just a trend, this structural change highlights a fundamental shift in asset allocation management, which is no longer limited to a breakdown by asset classes, geographies or sectors of activity but is now moving towards a cross-functional thematic approach. In 2024, climate-related thematic funds collected EUR3 billion, while renewable energies, which were very popular in 2021, collected EUR1 billion.  

Fixed income is at the centre of investors’ concerns and interest in this asset class continues to grow, the firm says, adding that fixed income ETFs now account for 25 per cent of the amount of assets managed by ETFs in Europe. 2023 marks a record year in terms of inflows into this asset class. 

A positive inflow pace for ESG ETFs. ESG ETFs assets increased by +28 per cent over the year. Since the peak in 2021, however, the enthusiasm for ESG has slowed. However, BNPP AM continues to see a growing demand for ESG-focused ETF strategies. 

ETFs are an essential asset allocation component in wealth management and are used in all envelopes, including life insurance. The number of life insurance policies that contain at least one ETF has jumped by +4 per cent in one year and +10 per cent in two years to reach 48 per cent in 2023. 

The 2023 trend continues in 2024 with positive inflows in the first quarter. This inflow is expected to be driven by the recent authorisation of the listing of active ETFs on the Euronext French stock exchange by the AMF, the firm writes. 

Lorraine Sereyjol-Garros, Global Head of ETF & Index Business Development at BNP Paribas Asset Management, says: “This study confirms the success of ETFs, which continue to grow in the European market. At BNPP AM, we will continue to offer ETFs with a sustainable approach to meet the demand of our increasingly diverse client base. For the second year in a row, the Quantalys x BNP Paribas Asset Management ETF Observatory is analysing trends to understand the evolution of this asset class, which represents a key element of our 2025 strategic plan.”  

“2023 was a year of development for the index market. This breakthrough is as much due to the wealth management industry, which has set itself up to offer accessible and innovative products, as it is to savers who are now familiar and seduced by these products. Digitalisation and increasing demands in terms of transparency of investment products, costs and performance have also favoured ETFs. It was therefore essential as an independent analysis firm for Quantalys Harvest Group to carry out a second edition of the ETF observatory in partnership with BNP Paribas Asset Management,” says Pierre Miramont, Head of Fund Analysis and Model Portfolios at Quantalys Harvest Group. 

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