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. “For example, the UK market doesn’t have distribution fees, [so] we’ve had quite slow adoption in the UK in terms of ETFs.” 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.”

Amid geopolitical uncertainty, there is a silver lining for gold.

Investors have been pouring money into the precious metal’s ETFs this year at a rapid clip, with nearly $21 billion flowing into US-domiciled products through July, data from Morningstar Direct show. Demand hasn’t even come close to that level since 2020, when the Covid-19 pandemic prompted a rush to gold. The asset is a safe haven, and there are several big reasons investors are looking for that this year, observers say. To start, the price of gold is up this year by nearly 29%.

“Gold’s a speculative asset, so the main driver of price and interest is the safe-haven demand amid geopolitical and economic uncertainty,” said Bryan Armour, director of ETF and passive strategies research for North America at Morningstar Research Services.

Tariffs, the Dollar and Central Banks

President Donald Trump’s announcement and enactment of high tariffs on numerous global trading partners led to a spike in gold ETF sales, said Aakash Doshi, head of gold strategy at State Street Investment Management. Globally, net sales have been positive for the past six of seven months and 10 of the past 13, he noted. “The gold market rally that began 18 months ago — it started the year off with a bang,” he said. “Now it’s more of a wait-and-see mode … The big driver has been a weaker dollar.” US retrenchment has investors looking for an alternative to the dollar, with gold being snapped up as a reserve by central banks, he said.

Data from Morningstar Direct show that US gold ETF demand has fluctuated over the past couple of years:

• While close to $21 billion has gone into them this year through July, just $1.7 billion flowed in on a net basis in 2024, and $4.4 billion flowed out in 2023, compared with net negative sales of $3.2 billion in 2022 and $12.4 billion in 2021. Amid the 2020 pandemic, $30.4 billion flowed into them.
• Net assets in US gold ETFs reached about $179 billion in July, with more than half of that in one fund, SPDR Gold Shares (GLD).

Gold Bugs, Beware: Portfolio construction is not one-size-fits-all, Doshi said, but many investors can benefit from a 3% to 10% allocation to gold in the long term. It is a diversifier and has low correlation to the stock market, but that doesn’t mean it’s negatively correlated, Armour said. And for those considering gold or digital assets as a hedge, there is room for both, Doshi said. “You’re seeing an environment with gold on your left tail and Bitcoin on your right tail.”

Despite the Trump administration’s war on artificial ingredients, there is a big push to help artificial in another context: AI.

Late last week, the Securities and Exchange Commission announced the formation of an artificial intelligence task force. That group, led by the former director of the SEC’s strategic hub for innovation and financial technology, Valerie Szczepanik, will “accelerate AI integration to bolster the SEC’s mission,” the regulator stated. The agency is examining ways to use AI in its own operations to make it more efficient and to encourage innovation, according to its announcement. (The outcome may prove that AI has government uses beyond generating fake videos that the president has not been shy about sharing.)

Last month, the White House also published an action plan for AI use by regulators. Relatedly, the House Financial Services Committee last week submitted a bill that would promote AI use in financial services.“As AI continues to evolve, we must understand its full impact because it will touch every part of our lives,” Sen. French Hill, R-Arkansas said in an announcement of the legislative package.

Stay in Your Sandbox

The House bill, dubbed Unleashing AI Innovation in Financial Services Act, would create innovation labs and allow the industry to launch test projects in “regulatory sandboxes.” The bill, which has bipartisan support, is a reintroduced piece of legislation from last year under the same name. Some aspects of the bill include:

• Allowing regulated entities, including those under the SEC, to test AI “in a safe way,” according to bill sponsors.
• Similar tests could be allowed under the Federal Reserve, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Consumer Financial Protection Bureau, National Credit Union Administration and Federal Housing Finance Agency.

This Is a Test. “The financial services industry has been using AI for decades, but companies must have the opportunity to innovate as major advancements continue to develop,” Sen. Mike Rounds, R-SD, said in an announcement. The bill “is designed to foster innovation and economic growth by providing a controlled environment where new financial products and services that use AI can be tested.”