A guide to launching and operating exchange-traded funds in Luxembourg
This guide is designed to help asset managers navigate the full lifecycle of structuring, launching, and operating an Exchange-Traded Fund in Luxembourg—from idea to listing, and long-term success.
The ETF market continues to expand, with a growing uptake of active ETFs. As the biggest hub of actively managed funds and the second largest ETF domicile in Europe, Luxembourg has embraced the rise of active ETFs and active ETF share classes.
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What is the aim of this brochure?
Exchange-traded funds (ETFs) have become one of the fastest-growing investment products globally as well as in Europe. As of July 2025, European ETFs hit a new all-time high with EUR 2.29 trillion in assets under management (AUM). It comes as no surprise that Luxembourg— as one of the European hubs for global asset managers to launch UCITS-compliant ETFs—plays a central role in the growth of ETFs.
At their core, ETFs are open-ended funds traded on stock exchanges, combining the diversification and regulatory protections of traditional mutual funds with the liquidity and intrinsic transparency of listed instruments. They are offered in passive forms that track an underlying index, while also expanding in active strategies where portfolio managers (PMs) make active investment decisions aimed at generating alpha. Both models are gaining momentum, with active ETFs now accounting for an increasing share of new launches across Europe.
ETFs are gaining popularity among investors due to their flexibility, accessibility, and cost efficiency. A single listing on a major exchange enables investors across multiple countries to access the same ETF. While a dedicated listing on exchanges is not required in each country the ETF is marketed, asset managers would still need to comply with cross-border marketing notification under the UCITS Directive.
Investors can trade ETF shares directly on the secondary market, just like stocks. In the primary market, authorized participants (APs) play a crucial role by creating or redeeming ETF shares, ensuring the supply matches demand, and keeping the ETF’s trading price aligned with its net asset value (NAV). Successfully launching an ETF involves much more than simply listing it on an exchange. It demands the appropriate structure, clear regulatory positioning, strong operational support, capital markets expertise, and continuous oversight of risk and compliance—requirements that also apply to traditional mutual funds.
Whether you are planning a single ETF or building an entire platform, this guide outlines practical steps and key considerations to design, launch, and manage an ETF in compliance with Luxembourg regulatory standards and global investor expectations.
This brochure is a summarized presentation of the ETF product and its specificities, as a general introduction to new entrants in the ETF market.
