Arthur Cox established the first Irish ETF in 1998 and continues to advise multiple ETF clients. Ireland is home to 50% of all ETFs in Europe and is increasingly the domicile of choice for new ETF launches. The market for exchange-traded products in Europe is more fragmented than other ETF markets such as the US. Our extensive involvement with ETFs allows us to assist our clients in preparing for the launch and sale of ETFs in Europe.
The European ETF market is undergoing a material increase in growth. In excess of US$260 billion of assets are currently held in Irish domiciled ETFs and commentators have projected this to reach $500 billion by 2020. Growth is occurring across all ETF asset classes and on a pan-European basis. ETFs are outperforming traditional mutual funds in terms of asset capture. This is driven by multiple factors which include:
- changes to European remuneration policies restricting the use of rebates;
- investor acceptance of the product type;
- a preference for greater liquidity and transparency in European funds;
- AIFMD making access to US ETFs more difficult; and
- acceptance of UCITS ETFs in the Asian markets.
The purpose of this briefing is to provide information on Ireland as a leading domicile for ETFs.