The UK is becoming one of Europe’s fastest-growing ETF markets, driven overwhelmingly by younger and first-time investors.
This demographic shift could have long-term implications for asset allocators and model portfolio builders.
BlackRock’s latest People & Money study, based on more than 40,000 respondents across 15 European countries, shows ETF adoption in the UK is growing at a 27% annualised rate since 2022.
The country now has 2.1 million ETF investors, placing it among Europe’s top five ETF markets. Yet the growth is coming from a very different cohort to the traditional multi-asset client base.
Almost half of UK ETF investors are under the age of 35, and uptake has been strongest among women and younger adults, with ownership rising 86% and 88% respectively since 2022.
BlackRock forecasts that a further 1.9 million people in the UK are very likely to invest in ETFs in the next 12 months, including one million newcomers, most of them under 44.
This raises the question of whether UK multi-asset portfolios are positioned for this shift if ETFs are becoming the default starting point for a new generation of investors.
A generation entering markets through ETFs
For younger investors, convenience and behaviour appear to matter just as much as cost. The study finds that:
- Gen Z and younger millennials are 60% more likely than older investors to start investing because of FOMO, driven by seeing peers grow their money
- 28% of Gen Z began investing because they could do so easily on their phones
- Younger adults are more than twice as likely to start investing after encouragement from friends or family
These social and digital entry points align naturally with ETFs, which are simple, low cost and easy to buy in small amounts through investing apps.
Timo Toenges, EMEA head of digital wealth at BlackRock, says the shift reflects deeper financial motivations. “Our survey shows that more than four in ten UK investors chose to invest after realising their cash savings were not delivering the best return for them. Around a third started because they wanted more control over their financial future. Yet £1.7 trillion is sitting in cash deposits across UK households. These findings highlight the enormous potential for people across the UK to make their money work much harder.”
Despite the sharp rise in ownership, the UK also has the lowest ETF awareness in Europe, with 64% of adults saying they have never heard of an ETF. The market is expanding quickly but from a shallow base of understanding.
This mismatch between rapid adoption and limited awareness poses challenges for advisers and allocators.
Many of the new ETF users are young, digitally native and often self-directed, but they may lack experience across full market cycles.
Consistency, not timing, is the behaviour investors most frequently associate with long-term success, yet younger investors may face greater behavioural risk in volatile markets.
Toenges says convenience must be paired with education.
He says: “ETFs are fast becoming the investment product of choice for younger generations. Their simplicity, low cost and ease of access make them ideal for first-time investors, especially those driven by seeing others grow their wealth and not wanting to miss out. To help them invest with confidence, it is crucial to pair this convenience with straightforward, accessible education on risk and returns.”
The generational tilt of ETF ownership is increasingly relevant to multi-asset managers, particularly those running model portfolios. Younger clients entering adviser channels may already be accustomed to investing through ETFs, and could expect allocation frameworks to reflect that.