The study also revealed that the European ETF market remains highly concentrated, with the top three providers managing more than two thirds of the total €362bn assets.
Additionally, providers have cut fees in recent years by launching new low-cost, core ETF ranges, and are also adapting practices, such as switching from synthetic to physical replication methods, to meet concerns about counterparty risk.
The study also found an increase in the need for innovation and product differentiation over the period.
Hortense Bioy, director of European passive strategies research at Morningstar, said the European ETF marketplace has entered a “new phase” in its development.
“Over the past two years, we have seen an evolution in ETF usage, increasing competition, and heightened product differentiation,” she said. “Regulation has spurred much of this change, as new types of investors are adopting the vehicle.”