Europe’s active ETF industry is entering a new phase. Assets in Europe-domiciled active ETFs reached €78.8bn at the end of 2025, up from €52.5bn a year earlier and nearly three times their level two years previously. For asset managers considering the market, however, the key question has become how new products should be structured and supported over the long term.
As active managers typically require more flexibility around operating models and distribution, one of the most important decisions is whether to build a standalone ETF capability or launch through an established platform. Both routes have advantages, and the right choice will depend on a manager’s scale, resources, distribution ambitions and existing expertise.
The case for a platform approach
Launching independently can give managers greater control over governance, branding, service provider relationships and the operating model. For firms with an established European funds business, significant expected scale and a strong distribution network, that investment may be justified.
For managers entering the European funds market for the first time, however, the operational and regulatory demands can make the route to launch longer and more resource-intensive than expected. They must establish the fund structure, appoint and oversee service providers, manage regulatory requirements, arrange exchange listings and develop relationships with authorised participants, market makers and other capital markets participants.
A standalone structure may therefore only become efficient once sufficient scale has been achieved.
A white-label platform offers a different route to market. The key benefit of a platform solution is that it allows an asset manager to enter the ETF market quickly and at significantly lower price point, without having to build its own operational and ETF infrastructure. This allows the manager to focus on their core capabilities; intellectual property, portfolio management and distribution.
A strategic rather than binary choice
The platform-versus-standalone decision is primarily a question of sequencing and fit.
A manager may use a platform to launch its first ETF, build a track record and test distribution demand. As assets and internal capabilities grow, it can reassess whether the platform continues to meet its needs or whether an independent structure would offer greater benefits.
Equally, a manager with sufficient scale, experience and distribution reach may decide that a standalone model is appropriate from the beginning.
The important point is to make the decision early. The operating model influences cost, governance, speed to market and the ability to add further products. It should therefore be aligned with the manager’s wider ETF strategy, rather than addressed after the investment proposition has already been developed.
Building products that can travel
This decision is especially important in Europe as there is increasing interest from international asset managers, including in Asia, looking to use UCITS frameworks as an efficient gateway into Europe.
Through the UCITS framework, a fund established in one European domicile can be registered for distribution across multiple jurisdictions. Luxembourg and Ireland are central to this ecosystem, accounting for 59% and 30% respectively of European cross-border marketing notifications.
This makes Europe attractive not only to domestic managers, but also to firms internationally seeking access to European investors. Yet a UCITS structure alone does not ensure successful distribution.
Managers must consider where to domicile the product, which investors to target and how it will be marketed and supported in individual countries. Investor preferences and distribution practices can vary significantly between markets, despite the common regulatory framework.
A successful ETF needs to be able to travel operationally and commercially, not simply qualify for cross-border registration.
Capital markets expertise matters
Whichever operating model a manager chooses, capital markets expertise is essential. Managers need to consider how liquidity will be supported, how efficiently creation and redemption will operate and whether the product’s design will encourage effective secondary-market trading.
In practice, this includes decisions around seed capital, engagement with authorised participants and market makers, exchange selection, portfolio disclosure and the management of spreads and liquidity. For example, an ETF may have a compelling investment strategy, but without sufficient seed capital, appropriate market maker coverage and an efficient creation and redemption process, investors may initially face wider bid-offer spreads and less consistent secondary market liquidity.
These considerations can be particularly important for active and fixed income ETFs, where portfolio construction, disclosure and liquidity may be more complex than for products tracking established equity indices.
A strong investment strategy remains the foundation of any ETF. But successful execution also depends on the interaction between the portfolio, operating model, distribution plan and capital-markets structure.
Europe’s ETF market offers substantial potential, but there is no single model for accessing it. A standalone structure can provide control and long-term flexibility, while a platform can offer a faster and less capital-intensive route.
The managers best placed to succeed will be those that assess these trade-offs objectively and choose an operating model that matches their ambitions. As competition intensifies, the quality of that decision may prove just as important as the product itself. For advisers and fund selectors, these choices can ultimately influence product availability, trading quality and operational resilience - all of which can impact the experience and outcomes for end investors.
Ronan Doyle is chief product officer at Universal Investment Group
