New Report: How Equity ETFs Are Shaping in 2024 So Far

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The past decade has witnessed a remarkable surge in the ETF market, with global assets under management scaling new peaks. This article, drawing insights from the Trackinsight Equity ETFs Report Q3 2024—sponsored by Amundi Investment Solutions—delves into the latest trends in Equity ETFs, with a particular emphasis on the European market.

The Global ETF Landscape

Over the past decade, global assets under management (AUM) have undergone a dramatic transformation. Equities have remained a dominant force, growing from €1.7 trillion in 2014 to an impressive €9.6 trillion by 2024, reflecting strong investor appetite for growth.

Fixed income assets have also climbed steadily, more than doubling as investors sought reliable income amid market shifts. Commodities have gained momentum, particularly during periods of economic uncertainty, while cryptocurrencies have emerged as a volatile yet noteworthy player—soaring from just €7.9 million in 2015 to €78.7 billion in 2024.

Equity Market Overview

By September 2024, global equity ETF flows reached €613 billion, with March and July standing out as exceptional months, recording peaks of €92.6 billion and €96.1 billion, respectively.

Regional Trends in Equity

North America continues to lead the way in equity ETFs, with assets under management surging from €1.4 trillion in 2014 to €7.4 trillion in 2024. Europe has also seen significant growth, especially between 2020 and 2024, reaching €1.4 trillion. Meanwhile, the Asia-Pacific region has experienced a remarkable sevenfold increase in AUM, growing from €99.6 billion in 2014 to €759.6 billion in 2024.

Over the past decade, North America has dominated equity ETF flows, growing from €147.2 billion in 2014 to €436.9 billion in 2024. Europe has also demonstrated strong growth, particularly during 2021 and 2024, with flows exceeding €117 billion. In contrast, Asia-Pacific has been more volatile, experiencing peak flows in 2018 and 2024.

The number of equity ETFs has steadily increased across all regions from 2014 to September 2024. North America led this expansion, with ETF numbers rising from 1,069 in 2014 to 3,547 in 2024.

Europe followed closely, with the number of ETFs growing from 902 to 2,176. In the Asia-Pacific region, the market expanded from 240 to 875 ETFs, reflecting a rising demand for diverse and specialized investment options across the globe.

Active vs. Passive

As of September 2024, passive equity ETFs continue to dominate the global market, holding 94.4% of total assets with €9.04 trillion in AUM. Despite this dominance, active equity ETFs are gaining traction, representing 5.6% of the market with €537.5 billion in AUM. This is a notable rise from a decade ago when active ETFs held just 0.5% of the market. Active equity ETF flows have also surged significantly, from €2.75 billion in 2014 to €124.4 billion in 2024, indicating a growing investor interest in targeted strategies and the pursuit of potential outperformance. This growth is primarily driven by the North American region, where active launches, assets and flows have surged significantly in recent years.

European Equity Market Overview

In Europe, equity ETFs dominate the AUM landscape, holding €1,425.6 billion—significantly outpacing other asset classes. Fixed income ranks as the second-largest category, with €449.6 billion, highlighting a solid demand for stable income products. Commodities follow with €121.1 billion, reflecting a steady interest in alternative investments. Cryptocurrencies and multi-asset ETFs, while smaller, are gaining traction, with €10.8 billion and €3.8 billion in AUM, respectively, signaling growing diversification in European portfolios.

Active vs. Passive

Although passive equity ETFs continue to dominate the European market, active strategies are steadily increasing in popularity. From €469 million in 2014, active flows have grown to €8.06 billion in 2024 as of end of Q3 2024, with a notable jump in 2023 with strong appetite to active ESG ETFs.

However, passive ETFs remain the preferred choice, attracting €109 billion in flows this year as of end of Q3 2024.

Market Cap Trends

European equity ETFs are primarily concentrated in larger market capitalizations. Mid & Large Cap ETFs dominate the landscape, holding about 50% of the total market, reflecting a preference for a diversified exposure to established companies.

Large Cap ETFs follow closely, accounting for 34% of the market. Blended strategies, which combine multiple market caps, represent 12%, showing investor interest in mixed approaches.

Small Cap ETFs, while a smaller segment, account for roughly 1.6% of the market, suggesting a cautious but consistent interest in smaller, potentially higher-risk companies.

The European ETF market is largely focused on larger market caps. Mid & Large Cap ETFs lead with 1,079 listings, indicating a strong preference for diversified exposure to larger companies. Large Cap ETFs are also significant, with 375 listings, while blended strategies are popular, offering 641 listings. In contrast, smaller market caps remain underrepresented, with just 44 Small Cap ETFs and 30 Mid Cap ETFs.

As of Q3 2024, European equity ETF flows were primarily concentrated in larger market caps. Large Cap ETFs saw the highest inflows, attracting €56.6 billion, followed by Mid & Large Cap ETFs with €46.7 billion. Blended strategies also performed well, bringing in €8.3 billion. Among smaller segments, Small Cap ETFs attracted €4.5 billion, while Mid Cap ETFs gathered €1.5 billion. Small & Mid Cap ETFs experienced modest inflows of €114 million.

Regional Focus

In terms of regional equity exposure, the Americas hold the largest share of AUM at 39%, followed by Mixed Regions at 35%.

Europe itself accounts for 22%, while Asia and the Pacific regions each hold 3%. Africa and the Middle East represent a smaller share, comprising less than 1% of the total AUM.

In terms of ETF listings, Europe leads with 637, closely followed by Mixed Region ETFs with 588, and the Americas with 485. Asia and the Pacific each have 152 ETFs listed, while Africa & the Middle East have a more limited presence with 13 ETFs.

Year-to-date data for 2024 shows a strong preference for diversified exposure among European equity ETFs. Mixed Region ETFs led with €53.3 billion in inflows, followed by the Americas-focused ETFs with €45.5 billion.

Europe-focused ETFs attracted €13.1 billion, indicating a stable interest in regional investments. Meanwhile, Asia and Pacific regions garnered €4.0 billion and €1.1 billion, respectively, demonstrating a growing but measured interest in these areas.

Download the Free Equity ETFs Report and Unlock the Full Insights

For comprehensive insights on EU-listed Equity ETFs, including sector, thematic, and ESG exposure, as well as top issuers and index providers, download the free Equity ETFs report. It also features the top-performing ETFs of the quarter and the most popular ETFs by net flows.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.