Key Takeaways
- With EUR 123 billion under management, assets in active ETFs have grown fivefold since 2022.
- Morningstar analysts say the growth in assets have been driven by flows, with most money concentrated with a few providers.
- J.P. Morgan dominates the European active ETF market with a share of just over 40%.
The growth of Europe’s active exchange-traded fund market shows no sign of slowing down. Assets are surging, new providers are entering the space, and product launches keep accelerating. Still, Morningstar analysts say the industry, in its next phase of growth, needs to evolve beyond “enhanced indexing” strategies towards more higher-conviction products. And that will test the appetite of investors for more expensive ETFs.
The European active ETF industry has grown nearly fivefold in size since the end of 2022, reaching EUR 123 billion at the end of August 2026. This was a 42% increase from EUR 86 billion at the close of 2025. Equity strategies dominate with EUR 84 billion under management, representing 67% of assets, while assets in active bond ETFs totaled EUR 26 billion, accounting for 21% of the market.
Despite that growth, active ETFs remain a relatively small part of the European ETF industry, representing just 3.8% of its total assets, compared with a share of about 13% in the US.
«Asset growth in the European active ETF space was largely driven by flows. Competition has heated up, but the bulk of assets remained concentrated in a handful of providers,» says Jose Garcia-Zarate, senior principal of Morningstar’s manager research team.
Are Europe’s Active ETFs Active Enough?
One of the defining features of Europe’s active ETF market is the dominance of «shy» active or enhanced-indexing strategies. These are benchmark-aware, low-tracking-error strategies designed to deliver small incremental gains over index funds and are used as core building blocks within portfolios. J.P. Morgan and Fidelity’s Research Enhanced ranges exemplify this trend, balancing modest active risk with competitive costs, Morningstar analysts say.
«We know that some managers have been successful with their products, most of which fall in the category of equity enhanced indexing or shy active,» Garcia-Zarate says. «To grow the active ETF market we not only need asset growth in existing products but in new products too, and, crucially, these new products cannot all be enhanced indexing strategies,» he adds.
Sooner or later, asset managers will have to test the appetite for high conviction, higher-risk active strategies in the ETF wrapper, which will have likely cost investors more, adds Garcia-Zarate. «Will investors accept higher-cost ETFs? Will these higher-active risk strategies meet their objectives? After all, the ETF is just a wrapper and not a magic cure for the shortcomings of active management.»
Why Active Bond ETFs Could Drive the Next Wave of Growth
Equities account for most assets and flows, but fixed income is emerging as one of the most promising areas for future growth. In the first eight months of 2026, net flows into active ETFs amounted to EUR 24.6 billion, representing 7.7% of all flows into ETFs in Europe, up from 7.6% in 2025 and 7.3% in 2024.
The bulk of flows was directed to equity strategies—EUR 18.2 billion, or 73% of all active ETF flows so far in 2026. However, since 2025, there has been a substantial increase in flows into active bond ETFs; through August, these funds’ inflows of about EUR 4.2 billion accounted for 17% of all flows into active ETFs. By comparison, active bond ETF flows represented just 10% in 2024.
«Fixed income is intuitively the least contested area for active management, and so one would think it’s the natural bedfellow to try active ETFs,» Garcia-Zarate says.
J.P. Morgan Leads Europe’s Growing Active ETF Market
In 2026, J.P. Morgan Asset Management remained the dominant market leader in active ETFs in Europe, though its share edged down to 40.8%. from 44.0%. Fidelity held second place at 9.1%, with iShares close behind at 8.0%, continuing to build on its gains from last quarter. Notably, Invesco saw its market share jump to 6.2% from 4.0%, overtaking Pimco in the process.
Overall market concentration remained high, with the top five providers accounting for 69% of total assets at the end of the second quarter.
However, the competitive landscape continued to broaden, with three new providers—Pictet, Carne Global Fund Managers, and AllianceBernstein—entering the market.
Many New Active ETFs Struggle to Attract Investors
Product development has accelerated sharply. After 149 new active ETFs were launched in 2025, another 97 came to market between January and August 2026. The total lineup has reached 404 ETFs, compared with just 68 at the end of 2023.
Active ETFs accounted for 23% of all European ETF launches during the first eight months of 2026, compared with 26% in 2025. That is a dramatic increase from 3.2% in 2022 and 7.5% in 2023.
But the growing number of launches should not be confused with proof of investor demand. «Let’s not be fooled by this,» says Garcia-Zarate. «Launches don’t equate to asset growth. Many of these launches will be unsuccessful in terms of garnering investor attention.»
So far, closures have been relatively rare. But that may simply reflect the young age of the European active ETF market rather than evidence that all these products will prove sustainable, he says.
Why Europe’s Active ETF Market Still Lags the US
Overall, in terms of assets and market share, the European active ETF market has a long way to go before challenging the supremacy of passive investing.
In the US, the dynamics are different: The ETF wrapper has benefited from more favorable tax treatment compared with open-end funds. «We are seeing an explosion of active open-end fund conversions to the ETF format, and with that come assets to the active ETF side of the scales by default,» says Garcia-Zarate. «Passive still dominates in the US, but active has more of an open road to grow faster than over here in Europe.»
For Europe, that makes the next stage of development particularly important. The market can continue to grow through new launches and strong flows, but a much broader adoption of active ETFs will likely require a wider range of genuinely differentiated strategies.
