According to data from Refinitiv Lipper, a division of the London Stock Exchange Group, a total of 66 ETF launches took place in Europe up until 30 June 2023.

While this number is lower than the 82 and 83 ETF launches observed in the same period in 2022 and 2021 respectively, Luxembourg stands out as the preferred choice for issuers.

Notably, Luxembourg witnessed 13 ETF launches in the first half of 2023, surpassing the seven and six launches recorded in H1 2022 and H1 2021 respectively.

Moreover, these 13 launches in H1 2023 even exceeded the total of 12 issuances for the entire year of 2021.

Detlef Glow, head of Lipper Emea Research at Refinitiv, told Delano in an email, “It is no surprise that the overall number of ETF launches in Luxembourg looks somewhat low. That said, the numbers for 2023 so far have already exceeded the number in 2021 and are likely to surpass those in 2022 as well.”

Glow explained that Ireland is often favored as the domicile of choice for ETF promoters due to the taxation agreement with the US, which allows for a withholding tax rate of 15% on dividends in Ireland, compared to the full 30% rate faced by US equity ETFs domiciled in Luxembourg.

Glow further that the restraint shown by European ETF promoters in launching new products is primarily influenced by the current market conditions and not necessarily indicative of a lack of innovation or a maturing industry.

He anticipates that the second half of 2023 will see an increase in the number of new ETF launches as the market outlook becomes more transparent.

However, only time will reveal if Luxembourg can sustain its strong start as a hub for ETF launches.