BlackRock spies rapid growth in European retail ETF market

A “new generation of European investors” are increasingly investing in exchange traded funds, according to new research from BlackRock.

A YouGov survey commissioned by the world’s largest asset manager, incorporating more than 16,500 retail investors in 14 European countries, suggested that investors aged between 18 and 34 were likely to replace those aged 35-plus as the dominant group of retail ETF investors.

The number of ETF investors in Europe is likely to rise 32 per cent over the next 12 months, suggested the poll, which was conducted between August 2022 and February this year.

Jane Sloan, head of iShares and index investments for Europe, the Middle East and Africa at BlackRock, said the US fund house expected 18 to 34-year-olds to represent 54 per cent of new ETF investors over the course of the year, 41 per cent of which will be first-time investors.

This article was previously published by Ignites Europe, a title owned by the FT Group.

By comparison, those aged 35 to 54 are expected to account for only 32 per cent of future ETF investors.

Sloan said these novice investors had typically become acquainted with ETFs via digital investment platforms and value the ease of investing and lower costs.

The poll suggested that ETF adoption by retail investors was likely to rise fastest in Spain and Portugal, two markets with low ETF penetration levels, where the number of ETF investors is forecast to increase 64 per cent.

In Germany, which already has the largest number of retail ETF investors in Europe, a further 2mn people are likely to invest in ETFs for the first time in the coming 12 months, pushing numbers up by 22 per cent.

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BlackRock forecast that the number of retail ETF investors in the UK would rise 56 per cent over the same period, outstripping growth of 42 per cent in France, Belgium and the Netherlands and 39 per cent in Italy.

It said the benefits of ETFs included easy and cost-effective access due to low fees and minimum investments.

In Germany, BlackRock attributed the rapid adoption of ETFs to the development of online investment platforms and the growing popularity of ETF-based savings plans.

Last year it raised its growth forecast for ETF-based savings plans in Germany, forecasting that the number of such products would rise above 9mn, rather than 7mn, by 2025.

*Ignites Europe is a news service published by FT Specialist for professionals working in the asset management industry. Trials and subscriptions are available at igniteseurope.com.