<p>European Institutional Investor Perceptions of Active ETFs</p>

Institutional interest in active ETFs is growing

While around a third of the institutional investors surveyed already allocate to active ETFs, there is growing interest among non users, particularly in active sustainable/ESG and fixed income solutions.

Many benefits of active ETFs are broadly understood

Active ETFs are valued by users and non users alike for their flexibility, cost-efficiency, and potential for outperformance compared to both passive ETFs and active mutual funds.

Active ETFs are used tactically and strategically

Many institutional investors that allocate to active ETFs are using them to navigate market volatility and to align with long-term thematic investment goals, including sustainability objectives

Perceptions of active ETFs do not always reflect reality 

Barriers to investing in active ETFs include their perceived lack of adaptability and complexity, and confusion over how active ETFs work and their benefits for long-term investors, while tax and regulatory concerns were raised in some markets.

Attitudes to active ETFs differ across countries 

Institutional investors in Italy, France and Germany are most likely to use active ETFs, while both active and passive ETFs are struggling for traction among more risk-averse UK pension schemes.

Education and more products may boost active ETF adoption

To increase adoption of active ETFs, more work is needed to address widely held misconceptions and to highlight their benefits, while expanded product offerings are needed to meet growing demand in some areas.