New approaches and new players attracting retail investors to ETFs

There is a new dynamic within Europe’s ETF market. Traditionally the preserve of institutional investors, Europe’s ETF market is now experiencing an upsurge in interest from retail investors attracted by online investment apps and commission-free dealing. 

Euroclear brought together experts from ETF market players from across Europe to share their insights on this trend and themes for future developments in the rapidly growing retail ETF sector. 

ETF savings plans are transforming Europe’s investment landscape

The growth in retail investment in ETFs may have started in Germany with retail savings plans, but retail investment across Europe is growing rapidly. One in three Austrians now invests in ETFs, and France, Italy, Spain, Portugal and the UK are all seeing a paradigm shift in investment trends as the number of retail ETF investment schemes proliferate.

Robo advisors fuelling retail ETF growth

The growth in the global robo advisory market has followed a similar rapid trajectory of retail ETF growth. Robo advisor platforms provide automated investment services accessible via online or mobile platforms, a convenient and comfortable route for tech-savvy younger investors who represent a large proportion of the retail market. The low cost of investing in ETFs and falling minimum subscription make ETFs a natural fit for robo advisors’ model portfolios. 

The market embraces retail growth in ETFs

One thing is clear: not only is there is a strong momentum in the retail ETF market across Europe but all parts of the financial ecosystem – from stock exchanges to brokers to financial market infrastructures such as Euroclear – all are working to help maintain that momentum and ensure the market’s predicted growth materialises. 

At Euroclear, Mohamed M’ Rabti, Chief Commercial Officer, FMCs says: “As a financial market infrastructure, we will do everything in our power to support the growth of the retail ETF business. We see ETFs as an important element in facilitating cost-efficient long-term savings for the next generation of European investors”.

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