Fidelity: European professional investors set to increase active ETF allocations

October 20, 2026

European professional investors are preparing to increase their allocations to active exchange-traded funds ('ETFs'), according to new research from Fidelity International ('Fidelity').

The research, conducted by CoreData Research on behalf of Fidelity among 310 professional asset allocators currently using or planning to use active ETFs across France, Germany, Italy, Switzerland and the UK, found that average active ETF allocations are expected to increase from 10.2% of portfolios today to 14.6% over the next 18 months. Put another way, professional allocators expect active ETFs to grow from around one in every ten dollars of their portfolios to roughly one in seven.

The findings come amid rapid expansion of the active ETF market. Globally, assets in actively managed ETFs have surpassed US$2.4trn trillion. In Europe, UCITS active ETF assets are projected to exceed US$1 trillion by 2031, while the number of active ETF providers has more than doubled since 2023 and the number of products has risen from 95 to more than 400.

Today, 25% of professional allocators invest at least a quarter of their equity exposure in active ETFs. That proportion is expected to rise to 37% over the next 12 months. In fixed income, the proportion allocating at least a quarter of their exposure to active ETFs is expected to increase from 18% to 25%. Investors see particularly strong opportunities for active ETFs in US equities (44%), followed by emerging markets (33%), small caps (29%) and developed European equities (28%).

Neil Davies, Head of ETFs, Fidelity International, comments:'The rise of active ETFs is one of the most significant global trends in the investment industry. What started as niche concept has now become a rapidly expanding segment. Our research suggests professional investors increasingly see them as a genuine portfolio construction tool, with allocations expected to grow meaningfully over the coming 18 months. ETFs are an increasingly important part of how clients access investment strategies, and Fidelity is committed to being a leading provider. We continue to invest in our ETF platform, capabilities and talent as part of our long-term growth strategy.'

One wrapper, but not one active ETF market

The research also suggests that the ETF wrapper alone is not enough to earn an allocation. Professional investors expect active ETFs to combine the structural advantages of an ETF with the investment outcomes of active management.

For the purposes of the research Fidelity categorised the active ETF market into three categories:

1. Benchmark aware: Stays relatively close to a benchmark, with 1-2% benchmark deviation
2. High conviction: Takes more active positions, with 3-4% benchmark deviation
3. Discretionary: Invests freely without being tied to a benchmark.

In Europe, most active ETFs that have been brought to market to date have been in the first category - benchmark aware. At least 40% of professional allocators say they have a strong understanding of the different active ETF approaches, yet usage falls to around one-third for high-conviction and discretionary strategies. Benchmark-aware active ETFs appear further along the adoption curve, with 47% already using them.

The categories are also expected to play increasingly distinct roles in portfolios. Over the next five years, the largest group of respondents (35%) expects benchmark-aware enhanced active ETFs to become a significant portfolio allocation, while high-conviction and discretionary active ETFs are more commonly expected to find a place as satellite allocations (31% and 23%, respectively).

High-conviction active ETFs stand out as an area for future product development, with 50% of professional allocators saying they would like to see more products in the category, twice the proportion citing benchmark-aware enhanced (25%) or discretionary active ETFs (25%).

Stefan Kuhn, Head of ETF Distribution, EMEA, Fidelity International, comments: 'Active ETFs may share a label, but are not all created equal. While benchmark aware dominates the market so far, investors are beginning to differentiate much more clearly between enhanced, high-conviction and discretionary strategies and the different roles each can play in a portfolio. High-conviction active ETFs could represent the next frontier for the market, with our research pointing to particularly strong demand for further product development in this category.'

Research and performance matter alongside the wrapper

The research also suggests that the ETF wrapper alone is not enough to earn an allocation. Professional investors expect active ETFs to combine the structural advantages of an ETF with the investment outcomes of active management.

When asked about important characteristics when using active ETFs, 79% cited cost efficiency, 75% liquidity, tradability and intraday pricing flexibility, and 74% transparency. But investment outcomes were similarly important: 74% cited the potential for outperformance, while 71% highlighted diversification and the ability to manage concentration risk.

Stefan Kuhn, Head of ETF Distribution, EMEA, Fidelity International, comments: 'Our findings show that professional allocators are looking for both wrapper efficiency and evidence that an active manager has the investment capabilities to deliver the outcome they are seeking. That places increasing importance on the research, portfolio construction and risk management underpinning an active ETF. As the market becomes more crowded, we believe those capabilities will become an increasingly important point of differentiation.'