How Nasdaq Helped Shape 25 Years of ETF Innovation in Europe

The 2000 launch of Europe’s first exchange-traded funds (ETFs) marked the beginning of a profound shift in how Europeans invest and save. What began as a niche innovation, combining the liquidity of a stock with the diversification of a fund, has evolved into one of the most democratizing forces in modern finance.

Over the past 25 years, Nasdaq has played a central role in that story — modernizing a market alongside issuers, regulators, and investors to make diversified, low-cost investing accessible to everyone.

“There was this optimism that you could combine the liquidity normally associated with stocks with the diversification that characterizes mutual funds,” said Sylvester Andersen, Head of European sales for ETFs and ETPs at Nasdaq.

“Packaging those stocks into an investable, low-cost vehicle enabled investors to gain the kind of exposure they wanted.”

The Nordic Origin Story

Europe’s ETF journey began at the turn of the millennium, seven years after the first ETF launched in the United States. For those seven years, according to Andersen, Nordic investors had to look overseas for ETFs, and that came with a heavy price tag.

“Before we had local ETFs in the Nordics, if investors wanted to go into ETFs, they had to buy foreign ETFs, which came with additional costs, foreign commissions, holding fees, exchange fees,” he explained.

In October 2000, the Stockholm exchange, then known as OM — launched XACT OMXS30, the first ETF in Sweden and across the Nordics. The product tracked the 30 largest companies on the Stockholm exchange and quickly became a cornerstone of the region’s market infrastructure.

Helena Wedin, Nasdaq’s Head of ETF and ETP for European Markets, said that milestone marked more than just a product launch, it helped drive a new investing culture.

“OM was inspired by the early success of ETFs in the U.S. and saw an opportunity to bring that same accessibility to Nordic investors,” she said. “It was a bold move that required close coordination across regulators, issuers, and the exchange — and it set the tone for innovation in the decades to come.”

“We were actively engaging in discussions with ministries, all the government bodies, and the financial supervisory authority to make sure the right framework was in place,” added Andersen.

“That’s how we built trust with market participants.”

That groundwork paid off quickly. By 2005, XACT and Nasdaq made history again, launching the world’s first leveraged ETFs, XACT Bull and XACT Bear, expanding the possibilities for sophisticated investors across the region.

From Institutions to Individuals

In the early years, ETFs were primarily used by institutional investors. Pension funds and asset managers embraced the new instruments as efficient building blocks for portfolio construction.

“Early adoption was predominantly institutional, but it picked up more and more in the retail sector,” said Andersen. “What started as a huge institutional investor story has converted over the years into very much a retail one.”

That shift accelerated as a new generation of investors began entering the market. Today, retail participation is one of the most dynamic forces driving ETF growth — and Nordic investors are at the forefront. More and more banks and especially digital retail platforms, according to Andersen, now offer monthly savings accounts that automatically invest in ETFs instead of traditional savings products.

Wedin called this evolution a broader change in how people think about investing.

“ETFs have become a natural entry point for individuals who want to save for the future,” she said. “They make diversification and disciplined saving accessible to everyone, not just to professionals.”

Innovation and Access

As investor demand for ETFs evolved, so did the products themselves.

“In the beginning, we focused on ETFs on Nordic blue-chip indexes — the Swedish S30, the Copenhagen, the Helsinki main indexes,” Andersen said.

“That evolved into a much broader story of thematic ETFs — robotics, AI, defense, you name it. Now, you don’t have to pick individual stocks. You just have to have an idea of what you believe in, and there’s a low-cost ETF that can get you exposure to it.”

"It is amazing how much you can fit into an index,” Wedin added. “We also see an increasing interest for ETFs with options strategies embedded, as well as ETFs providing value by focusing on dividend stocks or other factors."

Over the past 25 years, Nasdaq’s role has been both practical and transformative — building the market model, setting standards, and working closely with issuers to bring new products to life.

“Nasdaq has high standards and robust engagement teams in place to work with issuers to ensure that the highest-quality products come to market,” said Andersen. “We also focus on education and financial literacy — making sure that retail investors, in particular, understand what’s in these products and what the risks are.”

Looking Ahead

As Nasdaq marked 25 years of ETFs in Europe, at its recent conference, the milestone is both a celebration and a reminder of how far the market has come. The conference brought together stakeholders from across the Nordic and European ETF landscape to explore the future of ETFs and evolving investor trends, and a symbolic closing bell ceremony commemorated the 25-year anniversary of ETFs in Sweden.

“We’ve been part of this story from the very beginning,” said Wedin. “From pioneering the first Nordic ETF to supporting the next generation of thematic and active products, Nasdaq has helped create a market that’s stable, liquid, and constantly evolving.” 

“Looking ahead, we see a clear trend, more sophisticated retail investors are seeing the benefits of ETFs to a larger extent,” she added. “During the last year, we've seen 12 new listings and all of them are results of partnerships between an issuer and a private banking or wealth manager.

This is a trend that we believe we will see more of in the future as a means for the wealth manager to ensure attractive offerings, either as standalone ETFs or packaged in risk-adjusted portfolios." 

With more investors turning to ETFs as a way to build long-term savings, that evolution is far from over.

Learn more about Nasdaq Nordic Exchange Traded Products.