A new EY report featured in the Business Post highlights strong growth in Ireland’s ETF sector, with assets forecast to reach €3 trillion by 2029. Lisa Kealy, EY Financial Services Markets Leader, outlines why tax reform and continued innovation are key to sustaining Ireland’s leadership.

Ireland continues to lead Europe in exchange-traded fund (ETF) activity, with over 70% of European-domiciled ETFs managed from Ireland. New analysis from EY, covered in the Business Post, forecasts that ETF assets in Ireland could grow to €3 trillion by 2029 – supported by innovation, global fund activity and potential policy changes.

“Our tax incentives need to change in order to encourage and remove some of the impediments on investing,” said Lisa Kealy, EY Financial Services Markets Leader and former Chair of the Irish Funds Council.

While Ireland remains the leading domicile in Europe, concerns remain around the impact of the eight-year deemed disposal rule, which imposes a 41% exit tax on retained fund investments. Kealy noted that this system is “tax inefficient” and presents a barrier for retail investor participation.

The Central Bank of Ireland’s data shows that household ETF ownership remains low – dropping from under 5% in 2015 to below 3% in 2019. Despite this, Ireland continues to grow as a global ETF hub, with leading players like BlackRock, State Street and Vanguard operating significant platforms here.

The Department of Finance’s Funds Sector 2030 report acknowledged challenges in administering the deemed disposal regime and its effects on retail investors. Fund managers are keen to see its recommendations fully implemented.

EY’s outlook for ETF growth is underpinned by trends including the rise of active ETFs, digital investing platforms aimed at younger demographics, and new products such as single-stock ETFs and digital asset ETPs.

“Europe’s funds industry is at the beautiful stage of catching up – with Ireland at the centre,” said Kealy.

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Read the full Business Post article here:
https://www.businesspost.ie/markets/hopes-for-irish-etf-tax-changes-as-fund-value-expected-to-reach-e3-trillion-here-by-2029/