BNP Paribas AM: The UCITS ETF market continues to grow and set a new record in 2025 with net inflows of around €325 billion.
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Daniel Dornel, Head of ETF Research BNP Paribas AM
Analysis of ETF market flows – Year 2025
Five trends are emerging for 2026 that will characterise the further development of the market and open up new opportunities for investors:
1. Active ETFs are gaining importance
70% of asset managers in Europe plan to launch new actively managed ETFs in the next 12-18 months. This development underscores the commitment to combining the advantages of flexible portfolio management with the cost efficiency and transparency of exchange-traded funds. At the same time, the regulatory framework sets clear requirements for the disclosure and daily traceability of the portfolio structure. Active management is therefore increasingly establishing itself as an integral part of the ETF segment.
2. White label ETFs open up new possibilities
40% of asset managers in Europe are considering launching their own white label ETFs in the next two years. These products enable asset managers to implement individual investment strategies under their own brand without having to set up their own infrastructure. Lower minimum volumes also make white label solutions attractive for medium-sized players. Partnerships between established ETF providers and new market entrants promote diversity and customisation in the product landscape.
3. ETF savings plans reach new investor groups
36% of European adults are interested in ETF savings plans. Particularly noteworthy: a quarter of this group has never invested in the capital market before. The number of private investors is therefore growing steadily. In Germany, half of private investors already use digital platforms for their ETF investments. The automation of savings plans reduces transaction costs and increases ease of use, while digital advisory tools and mobile applications meet the expectations of the young and technologically advanced target group.
4. Young investors drive growth
52% of the growth in the German ETF market between 2022 and 2025 is attributable to the 25-34 age group. The 35-44 age group also contributes significantly to this growth with 41%. These generations prefer transparent, cost-efficient and digitally accessible investment products. In addition, sustainability aspects are becoming increasingly important in their investment decisions.
5. Investment trends remain unchanged
ESG investments remain a key driver in the ETF market. Solutions with low tracking error (TE) are particularly in demand, as they combine clear ESG positioning with close index tracking. Last year, low TE equity funds recorded inflows of €24.4 billion, accounting for 45% of ESG inflows and 70% of ESG equity inflows. ESG remains a preferred form of investment, particularly for large institutional clients, especially in Europe. At the same time, the global expansion of fixed income ETFs continues, further strengthening the breadth and depth of the sustainable ETF landscape.
Outlook
Current trends point to continued development of the ETF market. Established principles such as cost efficiency, transparency and liquidity remain unchanged. Innovation is evident in the adaptation to changing investor needs, demographic shifts and technological advances.
Source: ETFWorld
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