Moody's: Passive fund European market share to hit 25% by 2025

Up from 14% in 2017

Passive funds' share of the European fund management market will total a quarter by 2025, according to a recent report by Moody's Investors Service.

The group said the growth would be driven by the continued uptake from institutional investors and increasing regulation in the retail space. Passive funds made up 14% of the European market at the end of 2017 with this set to rise to 22% by 2025 in Moody's' base case scenario and 27% in its faster scenario. The reason for the slow uptake in the retail space, Moody's said, was due to European banks, which have dominated fund distribution, prioritising their own more expensive products rather than ETFs as "they do not generate large commissions". However, Moody's said this was set t...