The next big market for exchange traded funds (ETFs) is shaping up to be Europe.

In fact, reports Vito J. Racanelli of Barron’s, Europe is showing the strongest growth in the popularity of ETFs. But while there’s a lot of investor interest, it hasn’t reached the U.S. level just yet.

According to Morgan Stanley, assets in European-listed ETFs jumped 40% — from $90 billion to $126 billion — in the first nine months of 2007. Worldwide, assets in ETFs jumped 32%. In the U.S., assets grew by 30%, and they are nearing the $600 billion mark. As of Sept. 30, of the European countries, Germany had the most ETFs at 154. France came in second, with 114.

The ETFs attracting the most interest in Europe are those linked to the Dow Jones Euro STOXX 50, a large-cap index. At the moment, ETFs in Europe are geared toward institutional investors. But as an increasing number of individual investors discover their benefits, their ranks and assets under management can only grow.


The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.