Active ETF demand is surging: What’s fueling Europe’s new entrants?

ETF appetite in Europe is accelerating at a pace few expected. Andrea Murray, European Business Development Manager for ETFs, Brown Brothers Harriman, joined us at FundForum 2026 to break down what is fueling this surge, why active managers are entering the ETF arena at record speed, and what operational challenges still stand in the way.

Record inflows, expanding retail participation and rising competitive pressure are reshaping how asset managers think about product strategy and distribution. For firms that once hesitated to enter the ETF space, the momentum is now impossible to ignore. The question has ultimately has shifted from "Should we launch?" to "How fast can we get to market?".

Record flows are changing manager behaviour

Andrea highlights one of the clearest drivers behind the ETF boom: sustained inflows into active ETFs. With 2.33 trillion in active ETF assets and 73 consecutive months of inflows, the data is forcing a rethink among managers who previously avoided ETFs. Strong, consistent flows are opening the eyes of active managers who now see ETFs as a viable, scalable and strategically important wrapper.

This shift is not theoretical; It's behavioural. Managers are watching competitors launch products, capture flows and expand distribution, and they are recognising that staying on the sidelines is no longer an option.

Retail demand is reshaping Europe’s ETF landscape

The second major driver is retail participation. Andrea points to Germany’s savings plan ecosystem, introduced in 2010, as a catalyst for ETF adoption among everyday investors. These plans have created a powerful distribution channel that asset managers can tap into, offering a direct route to a growing retail base that values simplicity, transparency and cost efficiency.

As retail demand expands, managers are increasingly viewing ETFs as a way to reach new audiences and diversify their distribution footprint across Europe.

Competitive pressure is accelerating market entry

Competition is also pushing firms into the ETF space. Nearly 30 new active ETF entrants launched last year, with a similar number expected this year. When competitors move, others follow. Especially when flows, retail demand and regulatory conditions align.

Andrea notes that this competitive momentum is creating a sense of urgency. Firms are watching peers enter the market and recognising that delaying ETF strategy could mean missing out on a rapidly expanding opportunity set.

Regulatory conditions are improving, not hindering

Despite common assumptions, regulation is not the main barrier. Andrea explains that recent changes from the CBI and CSSF have actually made entry easier by relaxing semi‑transparent rules. Active managers no longer need to disclose underlying portfolios for 45 days, removing a major historical obstacle.

This regulatory shift has opened the door for managers who previously avoided ETFs due to transparency concerns.

The real bottleneck: ETF expertise

The biggest challenge is not liquidity or regulation — it is talent. Andrea emphasises that ETF and capital markets expertise is in short supply. With so many new entrants, demand for specialised skills has outpaced availability, making the first hire — a capital markets expert — one of the hardest roles to fill.

The industry is responding. Outsourced capital markets solutions and white‑label providers are emerging to support firms that lack internal expertise. Andrea believes this talent gap will resolve over time, but for now, it remains one of the most significant hurdles for new ETF issuers.

A market entering its next phase of growth

Europe’s ETF ecosystem is evolving quickly. Record inflows, expanding retail channels, competitive pressure and regulatory improvements are creating a powerful environment for growth. But success requires more than enthusiasm. It demands expertise, operational readiness and a clear understanding of how ETFs fit into broader distribution strategy.

Andrea’s message is clear: the opportunity is real, the momentum is strong and the firms that invest in capability (not just product) will be best positioned to lead Europe’s next wave of ETF expansion.