ETF Battle: Europe vs. the U.S.

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The world's two largest exchange traded fund ( ETF ) markets are Europe and the United States. Who's winning the race - or is it even a contest?

While Europe dominates the United States in terms of total number of funds listed, the U.S. ETF industry leads the charge in assets. Industry experts say that to catch up, there's a lot more regulation and education needed across the Pond before Europe will catch the United States. [ Fee-Based Advisors Prefer ETFs. ]

One hindrance to the growth of ETFs in Europe may be the fact that retail investors don't use them like they do here.


Heather Dale for The Financial Times reports that retail investors in the United States represent about 50% of the ownership of ETFs; in Europe, it's less than 10%, according to ETF provider Source. U.S. investors are more likely to be self-directed than they are in Europe. [ Are ETF Criticisms Fact Or Fear? ]

One coming change that may bolster U.K. ETF growth is the Retail Distribution Review (RDR). The RDR, coming in 2013, will ban commission payments by asset managers and other product providers to financial advisers. Instead, advisers will have to agree a fee for their services with clients.

Tisha Guerrero contributed to this article.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , ETFs

Referenced Stocks: ETF

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