BlackRock is focusing on a broader range of retail-oriented products, including more exchange-traded funds (ETFs), to engage a new generation of European investors, according to an executive. This strategy aims to enhance its competitive edge against local rivals that are gradually gaining ground.
The U.S. fund manager, through its iShares unit, holds a 43% market share in European ETFs, three times that of its closest competitor, according to Morningstar data.
BlackRock and other index-tracking providers have dominated Europe’s investment market in recent years, outpacing local managers. However, analysts believe maintaining previous growth rates may prove challenging.
Stephen Cohen, the chief product officer, stated that BlackRock aims to establish more partnerships with local banks to offer a wider array of funds attracting millions of new European investors.
The firm plans to explore launching additional bond and actively managed ETFs—a niche segment in Europe—as well as targeted indices that track fewer stocks to adapt to evolving client demands.
Cohen noted that Europe traditionally has a savings culture rather than an investment culture, but this is beginning to change significantly.
His remarks coincide with the European Union’s announcement of a new 'Savings and Investment Union' strategy, which seeks to redirect funds from low-yielding accounts into investments, highlighting that 70% of household savings in the EU—amounting to 10 trillion euros—are held in bank deposits.
Attracting consumers is seen as the "missing ingredient" for the growth of the European ETF market, according to Morningstar analyst Jose Garcia-Zarate, with previous expansion chiefly driven by institutional investment.
BlackRock, which collaborates with British banks like Lloyds and Monzo, is pursuing additional distribution agreements, particularly in markets where it is less established, like Eastern Europe.
The firm is also preparing to launch a bitcoin exchange-traded product in Europe, following the success of bitcoin ETFs in the U.S. BlackRock has not commented on its cryptocurrency plans.
Cohen indicated that BlackRock, which surpassed $1 trillion in assets in its European iShares business last month, aims to increase its customer base from 9 million to 19 million within three years.
While BlackRock has not disclosed how this growth target would impact its assets, its recent growth rate has slowed, with European player Amundi and U.S. rival Vanguard increasing their assets more rapidly since 2023.
Garcia-Zarate noted that BlackRock has lost some market share to other providers but suggested the firm is likely to take significant measures to maintain or expand its market position.
Cohen mentioned that a shift in investor preference from U.S. to European stocks—historically a driving force behind iShares' growth—has led to increased inflows this year, as investors reconsider the valuation of European equities compared to U.S. stocks.