Another key benefit is communication with investors. Historically, ETF issuers — particularly in Europe — have struggled with proxy communications because investors often opt out of receiving them through their custodians. Tokenization could help solve this and improve transparency.
Fundamentally, tokenization will make significant changes for investors around settlement and communication and could improve the ecosystem on the operational side.
Over time — whether in two, three, or five years — I believe every security will be tokenized. That will help enable 24/7 trading, better communication, cost efficiencies, improved settlement, and broader access to private markets that are difficult to deliver via some existing fund wrappers. So, from both an operational and investor standpoint, tokenization could bring some very significant changes for investors in ETFs and the wider market.
Murray: Almost half of global ETF investors surveyed believe global active ETFs will reach $10 trillion within the next seven years (from $2 trillion today). What is your prediction?
Fuhr: A 20% growth rate for the active ETF market seems realistic, but that may even understate potential growth — particularly with the approval of ETF share classes in the US. Historically this was only available for index products, but expanding it to active strategies will encourage more asset managers to launch share class versions off their mutual funds.
There’s strong investor demand in the US for mutual fund managers to covert their mutual funds, private funds and SMAs products or offer strategies in the ETF wrapper. We’ve already seen significant mutual fund to ETF conversions, and this could accelerate flows further — with $10 trillion AUM within the next seven years possibly a conservative estimate.
Murray: So those are your thoughts based on investor sentiment – what does your own data say?
In terms of market forecast I’d looked at going out from our end of November AUM data for 10 years. A 10% growth rate takes you to $4.8trn, 15% takes us to $7.5trn, 20% would take us to $11.5trn and a 25% growth rate would take us to $17.3trn. We do know that assets invested in e active strategies y grew by over 50% though the end of November.
Growth has been quite significant, and we also have the opportunity for mutual fund managers investors in Europe to utilize share classes. Based on all that I think we will see more people coming to market using active management as the underlying approach because most do not want to compete with the top three providers that globally account for the majority of assets (the majority of their assets are in the index category).
Depending on growth rates, by the end of 2030 you could see the US with $21.7tn (Bear case) AUM to $41 trn (Bull case). Asia could go to $2.2trn (Bear case) and $4.2trn (Bull case).
Globally, we have now seen 78 consecutive months of net inflows into ETFs as of December 2025 — an extraordinary run.
Murray: What will be the headline in 2026 for ETFs? Is there an underappreciated emerging market or trend that may fuel the next phase of growth in ETFs?
Fuhr: There is growing global recognition that UCITS is a truly international product, whereas US domiciled ETFs no longer travel well because they have to pay out income atleast once a year, which suffers 30% withholding and for taxable investors risk exposure to US inheritance tax. I also think UCITS ETFs offer the benefits of being able to offer share classes in different currencies, that accumulate or distribute income, are hedged or unhedged, where mutual funds and ETFs in the US are offered in USD and have to pay income at least once a year. We see UCITS ETFs gaining traction worldwide as investors look for more flexible structures.
I see the key market drivers, going forward being aligned to retail, retirement, and the transfer of wealth. People serving the retail market and finding solutions for retirement are looking at $124trn that is supposed to move from older people to the younger generation.
This is especially apparent in Europe and the UK — as governments encourage savers to move out of cash (with over €70 trillion sitting in European bank accounts) and into investments.
In the UK we’re seeing similar initiatives from the Financial Conduct Authority (FCA), Investment Association (IA), and the central government, all aiming to improve financial education and encourage investment over cash holdings through vehicles such as individual savings accounts (ISAs). I believe this will become a very significant trend.
Murray: In this year’s survey, investors highlighted several challenges facing the ETF industry. In your expert opinion, what, if anything, is holding the industry back?
Fuhr: In my view the biggest barrier is financial literacy and confidence — both understanding ETFs and knowing how to use them. We also need a more level playing field. Retrocession and trailer fee models, particularly in Asia, the middle east and Latin America, distort access and incentives.
Financial literacy dovetails quite nicely with my previous comments around efforts to improve financial literacy in the UK and Europe in order to get people to invest. Younger male DIY investors gravitate toward ETFs, but older investors and women often lack both financial literacy and confidence. Knowledge as well as financial literacy are important.
In terms of leveling playing fields, platforms also need to improve: many still struggle to integrate ETFs because they were built around mutual funds. When investors search for ETFs on these platforms, they often are available or not included when an investor searches for a specific type of exposure.
I am one of the founders of Women in ETFs and cohead of Women in ETFs EMEA. Women in ETFs is a non-profit which is 12 years old with 14,000 members in 30 chapters around the world. Financial literacy is an area of focus for us in 2026.
Better data, more education, and fully integrated trading platforms would materially improve adoption. Financial knowledge and literacy are really key.
