US bank aims for $100 bn in European active ETFs

JPMorgan Asset Management wants to grow its active ETF assets to more than $100 billion in Europe over the next five years, as the Wall Street giant seeks to keep its lead in the fast-growing sector.

An Exchange Traded Fund (ETF), a type of investment fund that holds a collection of assets, such as stocks or bonds, is traded on a stock exchange like individual stocks. They offer flexibility because they can be bought and sold throughout the trading day at market prices, unlike traditional mutual funds which are priced only once a day.

JPMorgan’s fund management division dominates the active ETF industry (where a manager actively makes a decision about buying and selling assets) across the region, managing $37.8 billion according to ETFGI (an electronic funds transfer) — well ahead of its nearest rival Fidelity International’s $7.4 billion.

Travis Spence, the firm’s Asset Management’s global head of ETFs, said: “We can easily get to over $100 billion. By 2030, we expect the active ETF industry in Europe to be roughly $400 billion in size. We will be managing in excess of $100 billion in the region by that point”.

The global $17 trillion ETF sector mostly consists of index-tracking products and is dominated by US giants BlackRock, Vanguard and State Street. However, JPMorgan commands a lead in the category of active ETFs which are overseen by portfolio managers instead of tracking indices.

ETFs have pulled in record flows in the US, where they have specific tax advantages over traditional mutual funds. According to ETFGI, active ETFs pulled in $215 billion in the US during the first half of this year — up from $132.5 billion a year earlier.

Flows are starting to pick up in Europe, however. Active ETFs in the region gathered $13.4 billion in the six months to the end of June, which was more than double the $5.1 billion they attracted in the same period in 2024.

“2024 was a record year globally for ETF flows. The active part of the market continues to be on record pace this year and flows are increasing”, said Spence. He added that active ETFs accounted for about 40 per cent of all new launches globally so far this year. In contrast, around three years ago, that figure was around 3 per cent.

An Exchange Traded Fund (ETF), a type of investment fund that holds a collection of assets, such as stocks or bonds, is traded on a stock exchange like individual stocks.

“ETFs in Europe is one of the main strategic topics for every active asset manager”, he said. “If you speak to any of the service providers or custodians, they are also being asked about it”.

Spence predicted future active ETF launches could focus on offering investors fixed income exposure.

There’s going to be a lot of growth in that space, he said. “The fixed income ETF market has really been starved of active ETF strategies but we are now seeing a big shift”.

Diversified investors: Spence said that despite European ETFs lacking any of the major tax advantages those in the US receive, the investors flocking to active products are increasingly diverse.

“We still have a big dependence on asset owners and asset allocators. But retail investors across the region are starting to use ETFs more”. He added: “We expect to see younger investors use ETFs at an increasing rate. That’s going to bring investors into the market earlier. That continues to be a huge opportunity across Europe”.

However, JPMorgan Asset Management faces increased competition from other fund groups in Europe looking to chip away at its market share. Franklin Templeton, Goldman Sachs Asset management, BNP Paribas ,Ossiam ARK Invest and Robeco have all unveiled active ETFs in Europe during the past year.

FTSE 250-listed asset manager Jupiter launched an actively managed global government bond ETF in February. HSBC Asset Management unveiled five active ETFs in June. Aviva Investors is considering entering the active ETF market while Fidelity International is looking to double its current ETF line-up over the next 12 to 18 months.