European managers put off ETF market by cost of entry

The high cost of setting up an ETF business may be holding back the European ETF market suggests recently published research.

A study conducted by ETF consultant Blackwater found that more than half (54%) of the surveyed European mutual fund managers cited the high cost of establishing an ETF business as their biggest concern.

The survey, titled ‘What European Mutual Fund Managers Think About ETFs’, revealed a mix of alarm and opportunity among the surveyed managers.

European ETF market forecast to grow 15% per annum until 2030

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Almost all (92%) of the respondents stated that they are planning to launch an ETF business or intensify their due diligence in the next two years.

This represents a sizeable shift in sentiment given that just 9% of respondents gave the same answer in 2021.

But 62% of respondents admitted they had become apprehensive about the growth of the ETF market, up from just 18% in 2021.

European ETFs creep up to new record AUM despite market falls

The main concern is that the cost of setting up an ETF business is too high even though the business case is so compelling that one in four (39%) believe that providing some sort of ETF offering will become “inevitable”.

According to Blackwater, the findings “underscore the need for adaptation and strategic foresight among mutual fund managers to navigate evolving market trends successfully”.

The study surveyed 127 asset managers across Europe.

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