European exchange-traded funds (ETFs) continued their robust growth trajectory in the first half of 2024, surpassing €1.7trn in assets under management (AUM) despite the backdrop of global economic uncertainty, according to a report from PWC Luxembourg on 7 November 2024. Inflows into European ETFs totalled €104bn during this period, marking a strong performance for the asset class.
The data, part of PWC Luxembourg’s European ETF listing and distribution 2024 report, reveals that European ETF listings grew by 1.9% and AUM by 17% between January and June 2024. This growth was driven in particular by the performance of EU-domiciled ETFs, which saw AUM rise from €1.467trn to €1.719trn, achieving record levels in the first half of 2024. Notably, Ireland and Luxembourg remained the dominant jurisdictions for ETF domiciles, accounting for 70.8% and 18.1% of cross-border ETF registrations, respectively.
Equity ETFs, which have shown significant growth over the past year, continued to hold the largest share of the European ETF market. By June 2024, equity ETFs made up 73.3% of all EU-domiciled ETFs, with AUM reaching €1.3trn. This represented a 3.5% increase compared to the previous year, demonstrating the continued investor preference for equity exposure through ETFs.
The rise of environmental, social and governance (ESG) investing also became a prominent feature of the European ETF landscape. According to the report, 36.5% of EU-domiciled ETFs were classified as ESG funds, with a significant proportion adhering to the disclosures outlined in articles 8 and 9 of the sustainable finance disclosure regulation (SFDR).
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In terms of cross-border distribution, the Asia-Pacific region showed notable growth, with an increase of 17% in ETF registrations between June 2023 and June 2024. Within this region, Singapore emerged as both the top ETF market and the fastest-growing market, underscoring the increasing global appetite for European ETFs.
The report also pointed to the continued expansion of cross-border ETF registrations, which rose by 10.4% over the same period. The trend highlights the global appeal of European ETFs, particularly as investors increasingly seek diversified, low-cost and sustainable investment options.
Commenting on the findings, Christophe Saint-Mard, global fund distribution leader at PWC Luxembourg, noted that the European ETF market’s strong performance reflected the growing investor demand for “cheap, diversified and sustainable investment solutions.” He added: “The ongoing expansion of the European ETF market, fuelled by factors such as cross-border registrations and a broadening range of thematic and ESG offerings, positions ETFs as a cornerstone of modern investment strategies. As market conditions evolve, ETFs remain a compelling choice for investors seeking to optimise their portfolios with a cost-efficient solution.”