A new whitepaper explores how asset managers can successfully enter the European active ETF market
The rise of active ETFs has emerged as both a challenge and an opportunity for asset managers. The latest whitepaper by Fundamental Group provides a compelling deep dive into this growing trend, sharing practical insights, market data and a framework for success.
Active ETFs are gaining serious traction across global markets. While they currently represent 2.4% of the ETF universe in Europe, they account for 8.4% in the US, a sign of the room for expansion. Asset managers are increasingly launching active ETF products, with 2025 already surpassing 2024 in the number of new entries and planned launches. Fundamental Group’s own data confirms this momentum, with a noticeable uptick in web activity and investor interest around active ETF-related content.
What’s driving the shift?
Several macro and structural forces are fuelling the growth of active ETFs:
• Demand for transparency and fair pricing: Investors expect greater visibility into what they’re paying for and what value they’re receiving. Active ETFs meet this need with more transparent structures than traditional mutual funds.
• Regulatory tailwinds: Regulations like MiFID II have pushed the industry toward higher standards of transparency and cost-effectiveness.
• Market volatility and renewed appetite for alpha: Recent years of market turbulence have revived interest in active management. Investors are rebalancing core portfolios, previously dominated by beta, by incorporating alpha-generating strategies through active ETFs.
• Digital enablement: Platforms have democratised access to investing. Digital adoption is reshaping investor behaviour and distribution channels.
• Model portfolio integration: As more discretionary portfolio managers include ETFs in their core allocations, the product fit for active ETFs becomes stronger, especially when aligned with a firm’s existing strategy.
Common pitfalls for asset managers
While the opportunity is significant, several hurdles must be overcome:
• Distribution challenges: This needs to be focused on reaching critical mass quickly and about struggles on both buy and sell side to organise processes.
• “Me-too” product fatigue: Launching generic products with no distinct value proposition – especially underperforming mutual fund strategies repackaged as ETFs – risks brand damage.
• Internal misalignment: New functions and expertise are often required to support ETF initiatives. Fragmented or siloed teams may struggle to execute effectively.
• Lack of clear value proposition: Active ETFs demand a compelling narrative that articulates both their unique offering and the value they deliver. Without it, even well-constructed products can fail to gain traction.
A framework for success: five strategic imperatives
To help firms navigate this complex transition, the whitepaper outlines five key imperatives for launching and scaling active ETFs:
• Strategic authenticity: Stay close to your firm’s DNA. Don’t force a leap into unfamiliar territory. If you’re known for, for example, quant fixed income, build from that foundation.
• Distinctive positioning: Use market data and white space analysis to identify a position that’s both credible and unique. Avoid crowded messaging lanes.
• Compelling narrative: Develop a storyline that clearly explains the value of your active ETF. Make it relevant and engaging across all stakeholder touchpoints.
• Outcome-oriented campaigning: Map the entire user journey from awareness to conversion. Measure engagement at each step and adapt your approach based on insights.
• Operational alignment: Ensure that marketing, product, distribution and data teams are all working toward the same outcome, supported by shared tools and performance metrics.
J.P. Morgan Asset Management has emerged as a leader in the active ETF space, not just by the strength of its products, but by building an educational ecosystem that goes beyond basics. Their content strategy spans from foundational ETF explainers to advanced insights on portfolio integration, delivered in a range of formats, including interactive tools. The key takeaway: thoughtful, multi-format education is essential to building trust and driving adoption.
Active ETFs are at a strategic inflection point for the industry. Aside from technical excellence, success in this space requires clarity, authenticity and alignment. It all comes down to value: creating it, communicating it and delivering it consistently.
A more detailed analysis of the five key imperatives is available in our latest whitepaper: Winning the race in European active ETFs. To receive a copy of the whitepaper, please email [email protected]
