Fidelity survey: European allocators expect active ETF allocation to reach 14.6% in 18 months

European professional allocators expect active ETFs to grow from 10.2% of their portfolios to 14.6% over the next 18 months, according to research Fidelity International commissioned from CoreData Research.

The survey covered 310 professional asset allocators in France, Germany, Italy, Switzerland and the UK, all of them currently using active ETFs or planning to. Because the sample includes only allocators who already use or plan to use active ETFs, 14.6% is their stated intention, not an average across all European professional investors.

The move from 10.2% to 14.6% is 4.4 percentage points, or about 43% more in relative terms. Fidelity frames the same shift as going from about one dollar in ten of a portfolio to about one in seven.

A quarter of respondents put at least a quarter of their equity exposure into active ETFs today, and that share is expected to reach 37% over the next 12 months. In fixed income the equivalent proportion rises from 18% to 25%. Both figures measure the share of respondents with at least a quarter of that asset class in active ETFs, making the 12-point equity gain and seven-point fixed income gain comparable.

Asked where they see the strongest opportunities, 44% named US equities, followed by emerging markets at 33%, small caps at 29% and developed European equities at 28%.

Fidelity counts more than 400 active ETF products in Europe, up from 95, and says the number of providers has more than doubled since 2023. It puts global actively managed ETF assets above USD2.4 trillion and projects European UCITS active ETF assets above USD1 trillion by 2031.

Fidelity has been building its own European active ETF line-up. In early October it launched two equity income UCITS ETFs with call-writing overlays, seeded with USD 5 million from Susquehanna, per ETF's records. Neil Davies, head of ETFs at Fidelity International, said the findings suggest professional investors "increasingly see them as a genuine portfolio construction tool" and that the firm continues to invest in its ETF platform, capabilities and talent.

Fidelity argues active ETFs are not uniform. It splits them into three groups, including "benchmark aware" funds that stay within 1-2% of a benchmark and "high conviction" strategies taking larger active positions. That means a benchmark-aware fund and a high-conviction fund sit in the same wrapper, so an average allocation alone does not show the risk being bought.

The fixed income leg starts lower and is expected to move less. After 12 months, three quarters of respondents would still hold less than a quarter of their fixed income in active ETFs.