- 8 October 2026
- Prof. Alfreda Šapkauskienė, VU Ekonomikos ir verslo administravimo fakulteto Finansų katedros vedėja
Europe’s bank-branded ETFs test whose interests come first
European banks are expanding their ETF offerings with funds carrying their own brands. Recent examples include UniCredit’s launch of seven onemarkets exchange traded funds with BNP Paribas Asset Management in April 2026 and Comdirect’s introduction of a global equity ETF with State Street in January of the same year.
These launches give investors more choice and bring product development and distribution closer together within banks. Whether customers benefit depends on the funds’ costs and investment strategies, as well as how banks select and present them alongside competing products.
An exchange traded fund, or ETF, pools investors’ money to invest in shares, bonds or other assets. Its units can be bought and sold on a stock exchange, much like shares. Many ETFs track an index, giving investors exposure to a market or a particular segment without having to select individual securities. By working with specialist asset managers, banks can offer these funds through their existing investment services, allowing customers to keep using a familiar provider.
When a bank also recommends a fund, its commercial relationship with the product becomes relevant to the customer. A recommendation involves a judgement about suitability and value. Customers should understand any financial interest the bank has in the fund and why it recommends that product.
What convenience costs
The relevant comparison depends not only on the ETF’s own costs, but also on the terms through which it is bought. The annual fund charge tells only part of the story. Purchase fees, custody charges and the difference between buying and selling prices can also affect the cost of investing. Their importance varies with the amount invested, the frequency of purchases and how long the investment is held.
Comdirect, for example, normally charges 1.5 per cent of the amount invested on each purchase through an ETF savings plan. Selected funds can be bought through these plans without that charge, although other investment costs still apply.
The portfolios must also be comparable. Funds described as global equity ETFs may cover different countries and company sizes, or apply different selection rules. Comparing their charges without examining what they hold can give a misleading impression of value.
A customer may prefer the convenience of investing regularly through a bank or platform they already use. To assess what that convenience costs, customers need to distinguish the fund’s charges from the bank or platform’s fees.
How recommendations influence investors
In 2017, the UK’s Financial Conduct Authority (FCA) published a study of investment platforms’ recommended fund lists. Analysing data from three platforms between 2006 and 2015, the researchers found that platforms were more likely to recommend funds connected to their own businesses and those sharing a larger proportion of commission revenue with them. These recommendations substantially influenced investors’ choices.
The study found that recommended funds, as a group, outperformed non-recommended funds. However, recommended funds affiliated with the platforms did not perform significantly better or worse than non-recommended funds. Platform recommendations can therefore help customers choose, but customers should know whether a recommended fund is connected to the platform’s own business.
The study examined the UK fund distribution system operating at the time. Its findings do not establish how European banks distribute their new ETFs today. They do, however, help explain why customers should understand the financial benefit a distributor receives from a fund it recommends.
A separate study published in Financial Management in 2026 examined actively managed equity funds available for sale in Germany. Using data from 2010 to 2024, the researchers found that bank-affiliated funds were less exposed to competitive pressure and that their investors were less responsive to poor performance. These findings cannot be applied directly to index-tracking ETFs. They do, however, cast doubt on the assumption that a wider fund range alone delivers the benefits of competition to investors.
What banks should explain
The European Securities and Markets Authority (ESMA) announced that it would work with national supervisory authorities in 2026 to examine conflicts of interest in the distribution of investment products. The exercise covers staff remuneration, the way digital platforms direct investors towards particular products, and how firms manage potential conflicts between their profits and customers’ needs.
Customers should understand the bank’s relationship with a fund and the total cost of investing through its service. Where advice is provided, the recommendation should explain how the product fits the customer’s objectives. Where customers choose for themselves, the bank’s promotional offers should be clearly identified as marketing.
Banks expanding their own ETF ranges have an opportunity to offer customers useful alternatives. The test is whether those products compare favourably with competing funds once investment strategy and total costs are considered.
Prof. Alfreda Šapkauskienė is a professor at the Faculty of Economics and Business Administration at Vilnius University and Head of the Department of Finance. Her research focuses on behavioural economics and financial technologies (FinTech). She teaches courses in finance, behavioural finance and international finance.