European ETF investors steady amid March volatility

European ETF investors largely held positions during March’s market swings, and net flows into European ETFs remained positive in both March and May. Morningstar data show net inflows of €9.4bn in March. BNP Paribas Asset Management reports a rebound to €39.4bn of inflows in May, including €25.5bn into equity ETFs and €16.7bn into global equity ETFs.

Jose Garcia‑Zarate, Morningstar’s senior principal for manager research in EMEA, observed that equity ETF investors did not sell en masse during the March volatility. He said the data did not support the view that the real‑time trading ability of ETFs led to widespread rebalancing or panic selling.

Ralph Williams, director of European insights at Broadridge, described two investor groups active in ETFs. He identified a group of sophisticated investors that trade and move tactically, and a growing cohort of retail investors who use automated savings plans in markets such as Austria and Germany. Williams noted that tactical institutional flows often determine headline monthly figures, while retail savings plans provide steadier, recurring contributions.

Comments from asset managers describe a broader investor base in ETFs than a decade ago. Olivier Paquier of BNP Paribas Asset Management said institutional and professional users dominated the market 10 years ago. He added that wealth managers and retail clients now account for more of the investor base, while institutions use ETFs in more strategic ways. Paquier also reported that many investors continue to favour broad global equity exposures.

The pattern of adoption differs by asset class. Garcia‑Zarate pointed out that equity investors increasingly use ETFs-mostly passive products-whereas bond investors have remained more likely to use active mutual funds.

Growth in active ETFs is a recurring theme in industry commentary. Garcia‑Zarate described the shift of traditional active managers into the ETF structure as an important development, with managers using ETFs to compete with passive offerings. Broadridge noted, however, that market competition, high product launch rates and some investor preference for U.S.‑listed products affect the rollout and uptake of new active ETF offerings.

Industry participants identified distribution and the investor experience as focal points for the next phase of market growth. They expect efforts to centre on smoother onboarding through pension schemes, brokerages and automated plans, wider availability of savings plans, clearer investor education and more intuitive platforms to help investors access ETF products.

Market figures and participant remarks record recent flows and describe investor behaviour and changes in the investor base. Morningstar and BNP Paribas Asset Management provided the inflow data cited above; Broadridge and asset managers supplied observations on investor segments, product demand and distribution priorities.