Exchange-traded funds (ETFs) have been at the heart of the growth seen in the broader Exchange-traded products (ETP) universe, by contributing to most investor demand, underlying asset growth and spurring innovation in ways previously unimagined. Having reached a mature state in Europe with over EUR 1.0 trillion of assets invested in January 2021, there is still ample room for ETF issuers to expand their offer to new strategies (active, factor) and asset classes (ESG, thematic, crypto-assets, to name a few).

From a regulatory perspective, the EU-wide adoption of a post-trade consolidated tape for equity-like products - such as ETFs - will be critical to further increase ETF liquidity, by overcoming the fragmented nature of European markets and by moving more trading onto “lit” venues. The integration of SFDR disclosure requirements and the integration of sustainability risk/principal adverse impact into the UCITS framework will have important repercussions for the launch of index products, while also redefining issuers’ relationships with index providers.