Morningstar has published its annual Europe Fund‑of‑Funds Landscape Report. The FoF market stands at approximately €1.3tn, with allocation funds representing 75% of the whole market – attracting €30.8bn of net inflows in 2025 following two years of outflows.
“The European fund‑of‑funds market is no longer focused on expanding the opportunity set, it’s focused on efficiency. We’re seeing fewer launches, lower fees, and a clear shift toward scalable, systematically built multi‑asset solutions.
“In an environment where costs matter more than ever, investors are concentrating assets with managers that can combine diversification, discipline and price competitiveness. That’s reshaping the competitive landscape across Europe, particularly in the UK, where fee pressure and regulatory scrutiny have accelerated this trend,” commented Lena Tsymbaluk, Associate Director, Equity Strategies at Morningstar.
Key findings include:
The European fund‑of‑funds market stands at €1.3tn, up around 12% year on year, but growth is increasingly concentrated among the largest providers.
UK‑domiciled funds hold nearly one‑third of total assets (€409bn) and recorded steady inflows between 2023 and 2025, in contrast to a more volatile continental market.
Fees have fallen far more sharply in the UK, with UK averages at 0.7% for key categories versus 1.6% for European funds.
Investors continue to reward low‑cost strategies: the cheapest fee quintile attracted €96bn of net inflows over the past three years, while the most expensive saw material outflows.
The market is consolidating around scale: the top 10 managers now control around 31% of total assets, with Vanguard, BlackRock and UBS strengthening their positions.
While Vanguard remains the largest European fund-of-funds provider, BlackRock has been the fastest-growing among the top 10, increasing assets by €19bn over the past 12 months.
While index‑heavy fund‑of‑funds remain the fastest‑growing segment, systematic and quantitatively driven strategies are playing a growing role, particularly within retirement and institutional solutions.
Fund-of-funds investors favour passive strategies in developed markets such as the US, Japan, and the UK, while preferring active management in emerging markets, global equities, Asia ex Japan, and fixed income.
A full copy of the report can be found here.
