The European ETF market is experiencing an explosion of innovation, with new launches running at roughly triple the pace of 2020. Active, leveraged, and thematic ETFs now account for 75% of all new products, up from 56% five years ago. But this abundance has sparked a paradox: Are too many choices actually confusing investors? Industry leaders argue that the problem isn’t the number of ETFs—it’s the lack of tools to navigate them. And they believe AI, combined with human judgment, will be the key to unlocking the market’s potential.
AI as a Compass in a Sea of Choices
Hector McNeil, Co-CEO and Founder at HANetf, dismisses the idea that there are too many ETFs. “There are tens of thousands more mutual funds than ETFs,” he notes. “I do however think investors need help to make sense of the number of building blocks that are out there. There is no doubt AI will help investors [understand] the multitude of products.” Data from Trackinsight supports this: traffic referred by AI assistants increased fivefold between 2024 and 2025, indicating that investors are increasingly turning to AI to discover and shortlist ETFs. Andrea Acimovic, Portfolio Strategist at Elston Consulting, adds that AI excels at cutting through noise—comparing holdings, spotting overlaps, and analyzing prospectuses in seconds. But she warns, “AI can tell you what an ETF does. It can’t always tell you whether you should own it.” The consensus is that AI will augment, not replace, human decision-making.
From Research Assistant to Portfolio Builder
The role of AI may soon extend beyond research. Yorick Naeff, Head of Innovation at ABN AMRO, predicts a gradual shift from advisory and discretionary portfolios toward execution-only models where AI agents handle the bulk of the work. This would put pressure on margins and fees as investment products become commoditized. Meanwhile, McNeil advocates for “ETF solutions” like model portfolios and ETFs-of-ETFs, which simplify choice by packaging risk-weighted portfolios into a single product. “If you had an ETF of ETF risk-weighted portfolios, then an investor can buy as little as one ETF,” he says, arguing this would “crush the advice gap.”
Three Futures—or a Hybrid One
Experts see three possible paths for the European ETF market: full automation via AI agents, a middle ground with robo-advisers and model portfolios, or human advisors armed with AI tools. The most likely outcome is a combination of all three, as the market matures and investors seek tailored solutions. The real challenge ahead is not innovation itself, but building the navigation systems—whether AI-driven or human-led—that help investors turn choice into opportunity.
- ETF launches are at record highs, but the real bottleneck is investor navigation.
- AI is already driving a fivefold increase in referral traffic to ETF research platforms.
- AI agents may soon handle portfolio construction, pressuring fees and margins.
- ETF-of-ETFs and model portfolios offer a simpler, scalable alternative.
- The future likely blends AI automation, robo-advice, and human expertise.
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Written by: XPLAIN AI Editorial Team · Reviewed by: XPLAIN AI Editorial Desk
This content was drafted with AI assistance based on publicly available sources and reviewed under XPLAIN AI's editorial standards.