ETFGI forecasts that European investments in ETFs will reach $1 trillion by 2017, and the continent is catching up fast with the US.

On a global basis, ETFs were launched 23 years ago, with the first appearing in Canada in 1990, followed by the US in 1993. In Europe they arrived 13 years ago.

The reason everyone is so optimistic about ETFs is in large part due to the change in regulation in various European countries. Some are going through an RDR-like transition, so that the disappearance of commission, not just in the UK, means that low-cost products are becoming popular.

Equity-based ETFs are far more numerous than fixed income varieties. ETFGI recorded that at the end of May, there were 2414 equity-based ETFs and ETPs, compared with 679 fixed income products.

Nearly half of all ETFs and ETPs and 72 per cent of all assets offer access to equities, while those providing exposure to fixed income amounting 16 per cent of all assets invested in these products.

ETFs have historically been more widely used in Europe by institutional investors. However, as more retail investors become interested, so regulators have begun to take interest, to ensure that such clients understand the the differences between product types and risks involved.

Risks involve counterparties, leveraged and inverse ETFs, and confusion between ETFs and other ETPs. There are concerns about how complex products are, and whether they should be named as such. One idea is that distinguishing between complex and non-complex would mean that any product deemed complex would no longer be available to self-directed investors.

What is clear, is that ETFs have taken off in the retail sector dramatically and are likely to be around for some time.

Melanie Tringham is features editor of Financial Adviser