Furio Pietribiasi, CEO, Mediolanum International Funds: Active ETFs are relatively new instruments that enrich the offering available on the shelf, both for DIY retail clients and institutional clients. So far, commercial positioning has focused almost exclusively on costs, neglecting investments drivers. In my view, the push to active ETFs is a defensive move by large asset managers to counter the pressure on margins: passive ETF margins are now at their lows, while those of traditional active funds are rapidly declining. Thanks to regulatory openings, many managers have jumped on these new products in the hope that they will generate better results for clients and higher volumes for companies than those prior products called ‘smart beta.’

Passive ETFs have been exponentially growing among institutional and professional investors, including in products dedicated to high-net-worth clients. With wealth management solutions, managers justify their costs on their ability to generate alpha through asset allocation and market timing. However, this reduces the value of the contribution of the active management of the underlying instruments. When we look at the results compared to market benchmarks, very few have been able to do this systematically, and when they have succeeded, the alpha achieved has been modest.

For this reason, I expect that increasingly, these wealth manager solutions will shift to active ETFs. While those who were already using active funds, in my opinion, will migrate the core component of the client’s portfolio to active ETFs, which are cheaper and carry lower risk compared to more concentrated strategies that, although offering significantly higher alpha, have higher short-term volatility.

At Mediolanum International Funds we take an agnostic approach to selecting instruments within multi-manager funds’ portfolios. We use passive ETFs for short-term tactical choices, where active management is not justified. For medium-long term decisions, what matters is the ability to generate alpha consistently. Whether this alpha comes from active ETFs or traditional active funds is irrelevant to us. However, it must be said that, when we invest significant portions of a UCITS fund’s total assets, we use segregated mandates replicating specific strategies of active funds or ETFs, as the UCITS regulation imposes precise limits on exposure to individual instruments.

Lisa Kealy, Partner and Head of Wealth & Asset Management, EY Ireland: The global ETF market continued its strong momentum in 2025, with robust growth across regions and Europe emerging as a key expansion area. This growth is expected to continue with 15% CAGR to 2030 and beyond. The next phase of ETF evolution will be different, driven by increased institutional and retail flows and active strategies, CLOs, private assets, defined outcome, digitised and tokenised share classes and buffer ETFs.

Ireland’s Leadership: Ireland dominates the European ETF landscape, hosting over 70% of ETFs. Ireland’s ETF assets doubled to €2 trillion in just two years. Recent regulatory changes enabling ETF share classes and greater portfolio transparency were very welcome, reinforcing Ireland’s reputation for innovation and investor confidence.

Retail Opportunity: Retail participation is the next big catalyst for ETF growth in Europe. Currently, retail accounts for only 15% of ETF assets in Europe versus 50% in the US, despite Europe having twice the population—a massive untapped opportunity. Germany is leading the way with savings plans, digital platforms, and targeted marketing campaigns, setting the blueprint for other markets. For Irish investors, the potential is significant: with €160 billion sitting in low-yield deposits, ETFs offer a compelling alternative to preserve and grow wealth while aligning with global trends.

Product Evolution: The ETF market is entering a new phase of innovation, moving beyond traditional passive index tracking into more sophisticated strategies. Active ETFs are gaining significant traction, capturing nearly half of recent inflows in some markets, while thematic products—such as ESG, technology, and climate-focused ETFs—continue to attract strong demand. New structures like buffer ETFs, defined outcome strategies, and ETFs offering exposure to private assets and CLOs are broadening investor choice and enabling more tailored risk-return profiles. This evolution reflects a shift toward customization, outcome-oriented investing, and integration of advanced analytics, positioning ETFs as a versatile solution for both institutional and retail investors.

Share Class Innovation: In September 2025, the SEC granted exemptive relief to Dimensional Fund Advisors, allowing them to offer ETFs as share classes of mutual funds. This landmark decision opened the door for broader adoption of the multi-share-class structure across the U.S. fund industry. With around 80 other fund firms having similar applications pending, approvals are expected to accelerate, creating significant momentum for ETF innovation. The implications for Europe are profound: this regulatory shift is expected to drive a surge in active managers launching ETFs in 2026 and beyond, as firms seek scalable, cost-efficient structures. For Ireland - already the leading European ETF domicile and having granted the ability for ETF share classes - this is great news, reinforcing its position as the go-to hub for global managers and fueling further growth in ETF assets.