The European fund market has seen some cost and return improvements, but remains uncompetitive globally, according to the European Securities and Markets Authority (Esma). In its 2025 report, Esma noted high investment costs due to a fragmented market structure with over 50,000 funds. While retail mutual fund costs (Ucits) have gradually declined, performance is still below 2021 levels. Alternative investment funds (AIFs) saw improved returns, although retail participation fell. Structured retail products (SRPs) gained popularity amid rising rates. Esma plans to address data gaps and enhance transparency in fund cost reporting to boost retail investor participation.