European ETF Fund Flow Insights – April 2025

The European ETF industry enjoyed healthy inflows over the course of April despite the market turmoil caused by the announcement of new tariff regimes by the U.S. That said, the inflows into ETFs in times of distressed markets repeat a trend which we have seen during other periods with rough market conditions.

In more detail, the performance of the underlying markets led—in combination with estimated net flows—to decreasing assets under management in the European ETF industry (from €2,103.4 bn as of April 30, 2025, to €2,054.5 bn at the end of April). At a closer look, the decrease in assets under management of €48.9 bn for April was driven by the performance of the underlying markets, which contributed (-€66.7 bn), while estimated net inflows added (+€17.7 bn) to the assets under management.

Despite the market turmoil, the inflows in the European ETF industry for April were once again driven by equity ETFs (+€14.8 bn). Money market ETFs (+€2.9 bn) were the second best-selling asset type, followed by alternatives ETFs (+€1.1 bn), mixed-assets ETFs (+€0.1 bn), and commodities ETFs (+€0.01 bn). On the other side of the table, bond ETFs (-€1.1 bn) were the only asset type facing two months with outflows in a row.

Graph 1: Ten Best- and Worst-Lipper Global Classifications by Estimated Net Sales, April 2025 (Euro Billions)

Source: LSEG Lipper

Given the overall fund flow trend in the European ETF industry, it was not surprising that Equity Global (+€5.1 bn) was the best-selling Lipper global classification for April. It was followed by Equity Eurozone (+€2.3 bn), Money Market EUR (+€2.3 bn), Equity Europe (+€2.3 bn), and Equity Switzerland (+€1.1 bn). The renewed estimated net inflows into Equity Eurozone and Equity Europe can be seen as a sign that the trend that European investors increase their allocations to their home market has been further established.

Given the long-term trend for the estimated fund flows by Lipper classifications, it is surprising that Equity U.S. can’t be found on the list of the 10 best-selling Lipper classifications for April 2025, as the classification enjoyed “only” inflows of €0.3 bn. This investor behavior in Europe is the opposite of what happened in the U.S. since it looks as if U.S. investors were anticipating a fast market recovery because they invested $34.5 bn (+€30.3 bn) in ETFs classified as Equity U.S.

That said, if one would argue that U.S. investors have a home bias when it comes to investing, the behavior of European investors isn’t so different compared to the behavior of U.S. investors, as both Equity Europe and Equity Eurozone are on the list of the five best-selling Lipper classifications for the month. In other words, it can be said that European investors have also started to buy domestic equities in 2025, hence they may become a home bias within their portfolios in the future.

The ongoing inflows into money market products in the European ETF industry might be a sign that European investors have identified money market ETFs as an appropriate tool to manage their cash holdings. They may also use money market ETFs as a safe haven to reduce the overall risk in their portfolios. That said, the recurring inflows into money market ETFs might also be seen as a sign that the asset type has become a main asset type in the European ETF industry. Only time will tell, however, if money market ETFs will be able to establish themselves as a core asset type in the European ETF industry.

More generally, it can be said that European investors have become cautious when it comes to their positioning in the bond markets and may want to take profit from the elevated interest rate level at the short end of the yield curves before they return to their normal shape.

This assumption is backed by the general outflows from bond ETFs and the fact that seven of the 10 Lipper classifications with the highest outflows were bond classifications. However, the outflows from these classifications are rather small, so I wouldn’t say that European investors have started a flight to quality or that they are selling bond classifications with higher risks such as corporate, high yield, or emerging market bonds, on a larger scale. I would say rather that these flows may mark the beginning of a repositioning of European investors, as they want to protect their portfolios from possible impacts of any kind of new tariff regime in the U.S. In addition, European investors may want to reduce their exposure to U.S. dollar bonds in an environment in which the dollar is weakening compared to the euro and an expected increase in debt issued by the U.S. government.

This article is for information purposes only and does not constitute any investment advice.

The views expressed are the views of the author, not necessarily those of Lipper or LSEG.