Active ETFs Are Booming in Europe. US Managers Want In

Active ETFs are booming in the US, and Europe is taking notice.

The European active ETF industry is expected to balloon to $1 trillion by 2030, up from just $50 billion today, according to Janus Henderson. JPMorgan’s asset management division recently partnered with the Dutch fintech Bux to offer its active strategies to subscribers via model portfolios. The move shows the importance of the European active ETF industry as banks like JPMorgan — which controls more than half the active ETF market, according to Morningstar —  look to offer products to investors across the pond. In fact, much of the current hype around active ETFs in Europe can be attributed to their stateside growth, said Monika Calay, director of passive strategies research at Morningstar UK. 

“A lot of managers are saying, well, if it’s something that’s successful in the US, should we also try to distribute in Europe?” she told ETF Upside.

Clones Across the Pond

Active ETFs are hardly new in Europe, but their recent surge in popularity is. Assets under management grew by 68% in 2024 compared with the previous year, per HANetf. Active strategies in the US have seen steep but steady growth since the SEC’s passing of the ETF Rule in 2019. In Europe, however, they were slower to take off, which Calay said is due in part to Europe’s “fragmented market.”

“When you think about Europe, you’ve got lots of different countries, different distribution channels,” she said. The UK market, for example, doesn’t have distribution fees, but there has still been slower adoption than expected because of its platform infrastructure. Still, more and more European providers are launching their own versions of American ETFs. These include:

• Janus Henderson’s Tabula EUR AAA CLO UCITS ETF (JCLO) on European CLOs, which launched in March and seeks to replicate the performance of its AAA CLO ETF (JAAA).
• JPMorgan’s EUR Government Bond Active ETF (JEUG), which launched in January and invests in bonds issued by Eurozone countries rather than US bonds, which are the focus of its Active Bond ETF (JBND).

So will other managers follow in JPMorgan’s footsteps and partner with European companies? Calay thinks so, even if the challenges remain steep. She pointed to Vanguard’s attempted launch of a direct investor platform in Germany, which closed after less than two years. “Every manager is going to have to decide how they want to access a particular market and look at the platforms that they want to partner with,” she said.

Can You Pass the 401(k), Please? Europeans also have a different perspective when it comes to investing, since in the US, the practice in general is much more common. “A lot of US investors, if you have a dinner conversation, they’re going to be talking about their 401(k),” Calay said. “That doesn’t really happen here as much… From a cultural standpoint, from a direct investing standpoint, that’s been one of the biggest challenges.”