Active ETF Market Europe: RLAM and M&G Announce New Launches
Background: Growth in the Active ETF Market Europe
Royal London Asset Management (RLAM) and M&G are preparing to launch products in Europe’s active ETF market, a segment that has seen rapid growth in recent years. According to RLAM CEO Hans Georgeson, the asset manager will establish a new office in Dublin within the next 18 months, reinforcing its international expansion objectives and strengthening its position in the active ETF segment. This initiative is part of RLAM’s broader effort to expand its £184 billion asset management business.
Georgeson emphasized, “The ETF market is evolving rapidly,” and outlined RLAM’s goal to rank among the top ten ETF providers globally. RLAM plans to offer both equity and fixed-income active ETFs, further diversifying its investment product range. The entrance into the active ETF market is intended to improve RLAM’s cross-border accessibility and meet the growing demand for innovative investment solutions.
Market Reaction and Industry Changes
The active ETF market Europe has expanded significantly, with a Goldman Sachs report noting that assets under management have risen sevenfold since 2019, now totaling approximately €68.6 billion. This surge is accompanied by a notable increase in both the number of active ETF products and providers. For the first time, the number of active ETFs now exceeds that of passive ETFs, reflecting a shift in investor preferences toward more adaptable strategies.
Active ETFs differ from traditional “passive” ETFs by seeking to outperform market benchmarks like the FTSE 100, rather than simply tracking them. They offer lower costs and greater trading flexibility compared to traditional mutual funds, which are typically priced once daily.
Multiple traditional asset managers are moving into the active ETF market. Schroders launched its first Europe-based active ETFs in September, focusing on global equities and high-grade corporate bonds. Schroders Chief Investment Officer Johanna Kyrklund explained that these products leverage both the liquidity of ETFs and the expertise of active management. Jupiter also entered the sector with a global government bond active ETF earlier this year. Jupiter CEO Matthew Beesley warned that the industry must adapt, “If one sits back and does nothing, then ETFs will continue to take assets away from traditional funds.”
What’s Next for RLAM, M&G, and the European Market
M&G intends to debut its first active ETFs targeting UK government bonds and US Treasuries within weeks. According to Neil Godfrey, head of M&G’s client group, these products will give the firm access to new investor segments and deepen existing partnerships in the UK, Europe, and Asia, thanks to the growing familiarity and acceptance of ETFs among clients.
Both RLAM and M&G’s entry into the active ETF market Europe reflects ongoing fee competition and the need for traditional asset managers to offer products that are more cost-effective and accessible to a broader investor base. These moves are expected to further stimulate competition and innovation within the European asset management sector.
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