ETFs 2030: Capitalising on disruptive innovation

ETFs are moving from “mainstream adoption” to a new phase shaped by technology, retail demand and expanding product breadth. PwC’s latest report, ETFs 2030: Capitalising on Disruptive Innovation, highlights how AI, tokenisation, and digital distribution are changing what investors expect and how managers operate.

Europe is starting this phase from a position of strength. The European ETF market closed 2025 at an all‑time high of US$3.2 trillion in assets under management (AuM), up from US$2.2 trillion in 2024 — an annual growth rate of 42%. Europe’s scale, combined with still‑lower retail penetration than the US, creates a meaningful runway provided managers can make ETFs easier to access, easier to understand and cheaper to run.

Survey respondents expect Europe to keep compounding. More than a third of European respondents (36%) anticipate European ETF AuM will more than double to reach at least US$5.5 trillion by June 2030, up from US$2.6 trillion as of June 2025.

Global growth provides further context. Globally, ETF AuM reached US$19.5 trillion at the end of 2025, and more than a third of survey respondents expect global ETF AuM to reach US$35 trillion or higher by June 2030. But the report is clear: AuM growth alone is no longer enough to guarantee profitability. Competition is intensifying, with more than 100 new ETF issuers in 2025, and cost benchmarks are falling. This is pushing managers to modernise operations and differentiate through innovation.

Retail is a central growth lever. The report finds that more than 90% of respondents expect significant demand from retail investors over the next two to three years. In Europe specifically, interest in savings plans stands out: 79% of European respondents anticipate significant demand for ETFs through savings plans.

Policy direction matters here. The report points to European Commission support for savings and investment accounts across EU member states, paired with tax incentives and financial literacy campaigns, as potential accelerants for ETF adoption. It also highlights a significant pool of “investable inertia”. The European Council estimates around US$11.6 trillion (€10 trillion) sits in low‑yield EU bank deposits that could be invested. The implication for Europe is straightforward: the addressable market expands rapidly when ETFs are embedded into easy-to-use savings wrappers and digital journeys.

Demand remains strong for the core building blocks of global equity, fixed income and domestic equity. But the gap is narrowing as investors seek more tailored exposures and outcomes. The report flags three product areas with particular momentum:

1. Active ETFs: Globally, active ETF AuM reached US$1.7 trillion at the end of 2025, and 60% of respondents expect global active ETF AuM to reach at least US$4 trillion by June 2030. As active becomes a more standard wrapper, differentiation will increasingly depend on portfolio design, transparency and distribution reach.
2. Digital asset ETFs: Digital asset ETFs are now ranked among the top three ETF product types with the highest expected significant demand over the next two to three years, with 55% of European respondents saying they would launch a digital asset ETF if regulations allowed.
3. Alternative and outcome-oriented ETFs: More than a third of respondents expect significant demand for alternative ETFs, and a third anticipate significant demand for buffer ETFs (designed to cap potential losses using options).

Operational innovation is becoming a competitive requirement. Over 80% of respondents expect AI to have an impact on ETF operations in the next two to three years, including rebalancing, compliance monitoring, and regulatory reporting. Tokenisation is framed as a potential step-change in efficiency and access: nearly 80% believe tokenisation will increase global reach and 24/7 accessibility, and a similar proportion believe it will expand direct investor access to more asset classes.

For Europe, market structure also matters. The report cites the European Commission’s December 2025 market integration package aimed at reducing cross‑border barriers and shifting select supervisory responsibilities to ESMA. Its proposed changes could improve transparency (including via the consolidated tape), ease cross‑border transactions and support distributed ledger technology with greater legal certainty.

1. Build retail-ready distribution

Make ETFs discoverable and usable in the places retail investors already are: broker platforms, savings wrappers, and mobile-first digital channels. Prioritise practical investor education — how ETFs work, costs, risks and how to use them in goals-based plans — because education is consistently rated “very important” for securing retail inflows. Align product design and messaging to outcomes (income, retirement, protection) to support adoption through savings plans and model portfolios.

2. Accelerate product innovation without losing the core

Protect the “core shelf” (equity and fixed income exposures) while selectively scaling into faster-growing segments: active ETFs, outcome-oriented solutions (e.g. buffers) and, where allowed, digital asset exposures. Treat product innovation as a portfolio — test, learn, and scale — rather than a one-off launch cycle. Ensure distribution readiness (platform access, investor comms, liquidity support) is designed in from day one, not bolted on post-launch.

3. Modernise operations for margin resilience

Assume fee and cost benchmarks will keep falling and design an operating model that can compete. Invest in cloud and automation to reduce unit costs and improve speed-to-market, and deploy AI in high-impact functions such as rebalancing, compliance monitoring, and regulatory reporting. Pair technology change with workforce enablement — responsible use, controls, and skills — so productivity gains translate into sustainable margin improvement and better investor outcomes.

4. Prepare for tokenisation and market integration

Build “optionality” into your roadmap: monitor regulatory signals on tokenised securities and digital asset ETFs, and develop proofs of concept where appropriate. Tokenisation can change settlement, distribution, and access (including fractional ownership), but regulatory uncertainty remains the gating factor. In parallel, track EU market integration developments. Improved transparency, cross-border processing, and a clearer framework for distributed ledger technology could reshape European ETF economics and go-to-market choices.

We’re here to help

Our experts bring deep, end‑to‑end ETF expertise across strategy, regulation, product design, distribution and operations. We work with asset managers, distributors, and service providers to translate global ETF trends into practical, Europe‑ready actions, whether that’s entering or scaling the ETF market, navigating regulation, modernising operating models, or exploring innovation such as active ETFs, digital assets, and tokenisation. If you want to understand what the findings of ETFs 2030 mean for your organisation, our specialists are ready to help turn insight into execution.