The inflows into the European ETF industry over the course of March (+€10.5 bn) were impacted by the geopolitical tensions in the Middle East. When it comes to this, it was not surprising that the inflows into ETFs were way below the inflows for January and February, as well as the rolling 12-month average. Nevertheless, these inflows show how resilient the fund flows into ETFs in Europe are, especially if one takes into account that mutual funds in Europe saw overall outflows for the month.
At a closer look, the inflows in the European ETF industry for March were driven by equity ETFs (+€8.81 bn), followed by money market ETFs (+€3.8 bn), commodities ETFs (+€0.9 bn), and alternatives ETFs (+€0.02 bn). On the other side of the table, mixed-assets ETFs (-€0.004 bn) and bond ETFs (+€3.0 bn) faced outflows.
Graph 1: Estimated Net Sales by Asset Type, March 1 – March 31, 2026 (Euro Billions)
Source: LSEG Lipper
The strong inflows into equity ETFs were somewhat surprising, given the increasing geopolitical tensions in the Middle East, as these inflows may signal that European investors were somewhat in a risk-on mode. Conversely, the inflows in money market ETFs and the outflows from bond ETFs may show that European investors have become cautious when it comes to the future central bank policies, as increasing oil prices may lead to a higher inflation and a respective change in central bank policies. As a result, it can be said that European ETF investors were somewhat in a mixed mood with regard to their risk appetite over the course of March 2026.
A view on the estimated net flows by Lipper global classification helps analyze the flow pattern even further and show underlying market trends.
Graph 2: Ten Best- and Worst-Lipper Global Classifications by Estimated Net Sales, March 1 – March 31, 2026 (Euro Billions)
Source: LSEG Lipper
The net inflows of the 10 best-selling Lipper classifications accounted for €19.0 bn. Taking the general market sentiment and the overall fund flow trend in the European ETF industry into account, it was not surprising that Equity Global (+€6.4 bn) was the best-selling Lipper global classification for March. It was followed by Money Market EUR (+€2.7 bn), Equity Europe (+€2.1 bn), Equity Sector Energy (+€1.6 bn), and Equity Switzerland (+€1.4 bn).
Generally speaking, it is not surprising that Equity Europe is in one of the top spots on the table of the 10 best-selling Lipper classifications given the long-term trend of increasing flows into ETFs investing in European equities. From a market perspective, this trend was caused by better (lower) valuations and the good performance of European equities compared to their U.S. peers.
In addition to this, it is also not surprising to see Equity Sector Energy on the list of the 10 best-selling classifications for March, since European investors may want to profit from the increasing price of oil. The relatively strong inflows into Equity Switzerland might be a sign that European investors consider Switzerland as a safe haven.
That said, the inflows into Equity Emerging Markets Global (+€0.8 bn) might be showing that European investors want to diversify their emerging markets exposure, as these inflows were more than offset by outflows from Equity China (-€0.8 bn), Equity India (-€0.2 bn), and Equity Asia Pacific (-€0.1 bn).
The general trend of inflows into money market products continued over the course of the month. Nevertheless, money market is in general not considered as a core asset type within the European ETF industry. However, taking the market environment and the overall fund flow trends into account, it was not surprising to see Money Market EUR (+€2.7 bn) and Money Market USD (+€1.1 bn) on the table of the 10 best-selling classifications in the European ETF industry.
A view of the headline estimated net flow numbers might make one think that European ETF investors have switched some of their bond holdings into money market over the course of the March to reduce the risk in their portfolio. Even as this might be true in some cases, a more detailed view of the flows in the bond segment shows that there was as additional trend in place.
From a bond classification perspective, the outflows from Bond EUR High Yield (-€1.7 bn), Bond EUR Corporates (-€1.5 bn), Bond Global Short Term (-€0.8 bn), Bond Emerging Markets in Hard Currencies (-€0.8 bn), Bond Emerging Markets in Local Currencies (-€0.7 bn), Bond USD High Yield (-€0.6 bn), Bond Global Corporates GBP (-€0.4 bn), Bond Global High Yield EUR (-€0.4 bn), Bond USD Short Term (-€0.3 bn), and Bond USD Corporates (-€0.3 bn), may show that European investors were at least partly reducing credit risk in their portfolios.
Conversely, Bond Global Corporates USD (+€1.1 bn) was the best-selling bond classification for the month, followed by Bond JPY (+€0.7 bn), Bond USD Government Short Term (+€0.5 bn), Bond EUR Inflation Linked (+€0.5 bn), and Bond EMU Government (+€0.5 bn). Overall, it can be said that the flows into bond ETFs are showing a mixed picture. On one hand, European investors seem to reduce the credit risk in their portfolios, while on the other hand they are still buying corporate bonds. However, global corporate bond ETFs hold broad diversified portfolios, which might mean that European investors were looking for diversification when it comes to their corporate bond exposure.
More generally, these numbers showed the European ETF segment is also highly concentrated when it comes to fund flows by Lipper classification. Generally speaking, one would expect the flows into ETFs to be concentrated since investors often use ETFs to implement their market views and short-term asset allocation decisions. These products are made and, therefore, are easy to use for these purposes.
The 10 classifications with the highest estimated net outflows for March accounted for €12.3 bn in outflows. These outflows were way above the outflows for February (-€2.8 bn), which might show that European investors could have reduced some risks in their portfolios given the current situation on the securities markets.
Equity Sector Financials (-€3.8 bn) was the classification with the highest outflows for the month. It was bettered by Bond EUR High Yield (-€1.7 bn), Bond EUR Corporates (-€1.5 bn), Equity Germany Small & Mid Cap (-€0.9 bn), and Equity Sector Gold & Precious Metals (-€0.8 bn).
As gold is in general considered as a safe haven in times of geopolitical tensions and possibly increasing inflation, it is surprising that Commodity Precious Metals (-€0.01 bn) and Equity Sector Gold & Precious Metals (-€0.8 bn) witnessed outflows for the month. Given the market environment, these outflows might have been caused by profit taking from some investors. That said, some investors might want to diversify their portfolios and switched their investment from gold into an ETFs investing in a broad commodities index, which may also profit from the increase in oil prices, since Commodity Blended (+€0.8 bn) enjoyed inflows.
To sum this up, it could be said that European investors were diversifying their portfolios while reducing specific risks into account. This means we did not see a general flight to safe havens, since investors sold stocks and bonds from sectors they might have considered as “high/higher risk sectors” and bought back more diversified products. In addition to this, the long-term trends with regard to the estimated net flows in the European ETF industry, like the inflows into Equity Europe, were still intact, despite the general market environment.
The views expressed are the views of the author, not necessarily those of LSEG.
This article is for information purposes only and does not constitute any investment advice.
