Europe's largest ETF market set to grow

Europe,ETF market, grow, German ETF market, ETF, investors, BlackRock, marketThe German ETF market contains the largest number of ETF investors in Europe, and further growth of 22% is expected in the next year, according to BlackRock.

The asset manager’s research revealed over two million Germans have indicated they are “very likely” to invest using an ETF in the next 12 months. This represents a potential relative growth of 22% of the ETF market in Germany.

German investors’ demand for ETFs has grown due to the evolution of digital distribution platforms and the increasing popularity of ETF saving plans.

The research also revealed investors aged 18 to 34 are forecast to replace the above-35 age group as the most dominant ETF investors in Europe.

Even though investors aged above 35 currently represent 63% of ETF owners, the demographic is expected to only represent 46% of investors during the next wave of new ETF investors. In comparison, 54% of investors are expected to be aged between 18 and 34, making Gen Z and Millennials investors the largest cohort of ETF owners.

Jane Sloan, Emea head of iShares & index investments at BlackRock, said: “ETFs have helped to fuel this growth and we continue to see strong acceleration in ETF adoption by younger investors, aged 18-34 and expect that over the course of 2023, this group will account for 54% of new ETF investors.”

The potential two million new ETF investors will represent a 34% increase in the number of investors aged 18 to 34 investing using ETFs. This strengthens the idea that young investors will overtake the above-35 age group to become the most dominant ETF investors in Europe, according to BlackRock.

BlackRock’s expected growth of the ETF markets supports Refinitiv Lipper’s findings that wider ETF adoption could help the ETF industry double by the end of 2030.

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