Investment Insights: What Will Shape Europe's ETF Market in 2026?

Why It Matters

The shift toward active, thematic and currency‑hedged ETFs reshapes product strategy, offering asset managers new growth avenues and forcing investors to rethink risk‑adjusted exposure in a diversifying European market.

Key Takeaways

• European ETF assets set to hit record levels in 2026.
• Active ETF launches outpaced passive, 85% of new products.
• UBS leveraging thematic and structured credit ETFs for growth.
• AI and tech themes expanding beyond US to China markets.
• Currency‑hedged ETFs surged to $300bn, driving investor demand.

Summary

Jamie Gordon of ETF Stream hosts Amanda Abello of UBS Asset Management to discuss the forces shaping Europe’s exchange‑traded fund market through 2026. The conversation highlights a trajectory toward another record‑breaking year, driven by expanding demand from Asian and Latin American investors as well as continued domestic inflows.

UBS points to a seismic shift toward active ETFs: of the 1,300 new products launched last year, 85 % were active, overtaking passive offerings. The firm is also betting on thematic strategies—AI, China tech, healthcare, and aging‑population themes—and on structured‑credit ETFs, leveraging recent acquisitions to broaden its product suite.

A striking data point is the surge in currency‑hedged ETF assets, which climbed from $56 billion in 2017 to just under $300 billion at the end of last year. UBS’s 2025 price‑reconciliation initiative contributed to a record platform year, and clients are now scrutinizing exposure to the US dollar amid recent market volatility.

The trends signal that European investors will increasingly seek active management, thematic exposure, and built‑in currency protection. Asset managers that can deliver these capabilities stand to capture a larger share of the rapidly growing ETF universe, while investors must adapt portfolio construction to mitigate currency risk and capitalize on emerging themes.

Original Description

In this Investment Insights interview, ETF Stream speaks to Amanda Rebello, global head of ETF and index fund sales at UBS Asset Management, about the trends she expects to shape Europe’s ETF market through 2026.