The first half of 2025 was a period with strong inflows for the global ETF industry.
The first half of 2025 was not easy to navigate for investors since the announcement of possible tariffs by the U.S. president send shock waves through the stock markets around the world. As a result, investors around the globe acted nervous over any political and economic news, especially by the announcements around the new tariff regime by the U.S. president and potential tit-for-tat reactions from the markets which are the targets of the new tariffs. That said, the tariffs are seen as a kind of trade war between the U.S. and the rest of the world, especially China, by some market observers.
When it comes to equities, investors were concerned about the impact of any new tariffs on the growth expectations of literally all economies around the globe. In addition to this, investors were also concerned about the impact of new tariffs on the profitability of all kinds of companies, as well over the impact of tariffs on inflation around the globe. That said, the U.S. stock market showed the fastest recovery in history from its low reached on April 8, 2025, even as several companies couldn’t give investors any guidance on future earnings since the impact from possible tariffs is still unknown.
Additionally, the increasing tensions in the Middle East also impacted investor sentiment, especially the intensifying conflict between Israel and Iran was a concern for investors since this had the potential to become a broader conflict in the region and could drive up the price for oil. Despite these concerns, the swings in the price for oil during this conflict was more stable than investors had expected. This was because no oil production sites were hit by military actions in the region and the shipping route through the Strait of Hormuz stayed open.
Nevertheless, the war in Ukraine and the increasing number of conflicts around the world led to a defense spending spree in Europe. The respective announcements by governments over the course of the first five months of the year led to a bull market for defense-related stocks. Furthermore, the NATO member states agreed in June 2025 to increase their defense spending from 2.0% to 5.0% of their respective GDPs.
Meanwhile, central banks around the globe tried to adjust their policies to the current environment. While the European Central Bank (ECB) has further cut interest rates and reached its target rate of 2.0%, the same is somewhat true for the Bank of England, where the interest rate still stands at 4.25% and Swiss National Bank which has reached 0.0%. Conversely, the Bank of Japan (BoJ) had to increase its interest rates to 0.5%. The U.S. Federal Reserve left its interest rates (4.25% to 4.50%) unchanged over the course of the first six months of 2025 despite some pressure to lower rates from the government. These decisions reflect central banks’ efforts to navigate economic challenges, including trade tensions, inflationary trends, and high market volatility, to support their local economies.
Nevertheless, fears of increasing debt in the U.S. put some pressure on the U.S. bond market, as investors fear increasing interest rates because of the increasing debt. That said, the downgrade of the U.S. by Moody’s on May 16, 2025, also contributed to these fears. When it comes to this, it is not surprising that the U.S. dollar has weakened against other major currencies despite the relatively high interest rate in the U.S.
More generally speaking, aside from the geopolitical tensions, there is only a very limited number of indicators which are sending negative signals for economic growth in the U.S. and other major economies around the world. With regard to this, it is noteworthy that most of these negative indicators are being offset by positive signals from other indicators. Nevertheless, some major economies, such as Germany, lack economic growth and may need lower interest rates and/or increased government spending as stimulus. Despite these headwinds, the positive effects of lower interest rates seem to be more important for investors than the current state of some economies.
Assets Under Management by Asset Type
From an ETF industry perspective, the performance of the underlying markets led—in combination with the estimated net flows—to a new all-time high in assets under management as the AUM grew from $14,141.4 bn as of December 31, 2024, to $16,025.7 bn at the end of H1. At a closer look, the increase in assets under management of $1,884.3 bn for H1 was driven by the performance of the underlying markets, which contributed (+$1,883.5 bn), while estimated net inflows added (+$818.0 bn) to the assets under management.
Graph 1: Assets Under Management in the Global ETF Industry, January 1, 1990 – June 30, 2025 (USD billions)
Source: LSEG Lipper
As for the overall structure of the global ETF industry, it was not surprising equity ETFs ($12,512.5 bn) held the majority of assets, followed by bond ETFs ($2,771.6 bn), commodities ETFs ($296.5 bn), alternatives ETFs ($240.9 bn), money market ETFs ($120.8 bn), mixed-assets ETFs ($63.4 bn), and “other” ETFs ($20.1 bn).
Despite the current market environment, it is not surprising that the assets under management for all asset types with the exception of “other” marked an all-time high at the end of June 2025.
Graph 2: Market Share, Assets Under Management in the Global ETF Industry by Asset Type, June 30, 2025
Source: LSEG Lipper
ETF Flows by Asset Type
The global ETF industry enjoyed strong estimated net inflows (+$818.0 bn) over the course of H1 2025 despite some headwinds in the equity and bond markets.
In fact, the inflows in the global ETF industry for H1 were driven by equity ETFs (+$509.3 bn), followed by bond ETFs (+$224.4 bn), alternatives ETFs (+$32.9 bn), commodities ETFs (+$27.5 bn), money market ETFs (+$19.3 bn), and mixed-assets ETFs (+$6.8 bn), while “other” ETFs (-$2.2 bn) faced outflows.
Graph 3: Estimated Net Sales by Asset Type, H1 2025 (USD Billions)
Source: LSEG Lipper
As graph 4 shows, equity and bond ETFs both enjoyed inflows in each of the six months of the first half of 2025. Nevertheless, the graph also shows that the flows in bond ETFs have slowed down in March and April and returned back to “normal” in May and June, while the inflows in equity ETFs were stable over the course of Q1 and slowed down over the course of Q2 2025.
Graph 4: Monthly Estimated Net Sales by Asset Type, January 1, 2025 – June 30, 2025 (USD billions)
Source: LSEG Lipper
The trend for the estimated net flows over the course of Q1 2025 was somewhat surprising given the uncertainty of the markets with regard to a possible new tariff regime which will be introduced at the beginning of April. That said, the insecurities over the future economic environment with regard to the effects caused by possible tariffs could be seen in the estimated net flows in the global ETF industry over the course of Q2.
Assets Under Management by Lipper Global Classifications
In order to examine the global ETF industry in further detail, a review of the Lipper global classifications will lead to more insights on the structure and concentration of assets within the global ETF industry. At the end of H1 2025, the global ETF market was split into 285 different peer groups. The highest assets under management at the end of H1 were held by funds classified as Equity U.S. ($5,703.1 bn), followed by Equity Global ex U.S. ($933.4 bn), Equity U.S. Small & Mid Cap ($893.8 bn), Equity Japan ($678.8 bn), and Equity Global ($669.8 bn). These five peer groups accounted for 55.40% of the overall assets under management in the global ETF industry, while the 10-top classifications by assets under management accounted for 68.74%.
Overall, 17 of the 285 peer groups each accounted for more than 1% of assets under management. In total, these 17 peer groups accounted for $12,514.5 bn, or 78.09%, of the overall assets under management.
Graph 5: Ten Largest Lipper Global Classifications by Assets Under Management, June 30, 2025 (USD Billions)
Source: LSEG Lipper
The peer groups on the other side of the table showed some funds in the global ETF market are quite low in assets and their constituents may face the risk of being closed in the near future. They are obviously lacking investor interest and might, therefore, not be profitable for their respective fund promoters.
Graph 6: Ten Smallest Lipper Global Classifications by Assets Under Management, June 30, 2025 (USD Billions)
Source: LSEG Lipper
ETF Flows by Lipper Global Classifications
The net inflows of the 10 best-selling Lipper classifications accounted for $543.3 bn. In line with the overall sales trend for H1, equity peer groups (+$372.7 bn) gathered the majority of flows by asset type on the table of the 10 best-selling classifications by estimated net inflows for H1 2025. That said, compared with the concentration of flows for the single regions, the 10 best-selling Lipper classifications are more diversified on the global level. Given the overall fund flow trend in the global ETF industry and the dominance of the U.S. as the leading market for ETFs, it was not surprising that Equity U.S. (+$216.7 bn) was the best-selling Lipper global classification for the first half of 2025. It was followed by Equity Global ex US (+$58.4 bn), Equity Global (+$52.0 bn), Alternative Other (+$42.7 bn), and Bond USD Government Short Term (+$42.0 bn).
Since money market is in general not considered a core asset type within the global ETF industry, it is not surprising that there were no money market classifications on the table for the best-selling classifications for the global ETF industry.
More generally, these numbers showed the global ETF segment is somewhat highly concentrated when it comes to the estimated net flows by 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.
Graph 7: Ten Best- and Worst-Lipper Global Classifications by Estimated Net Sales, H1 2025 (USD Billions)
Source: LSEG Lipper
On the other side of the table, the 10 peer groups with the highest estimated net outflows for H1 accounted for $35.1 bn in outflows.
Equity Theme – Natural Resources (-$9.3 bn) was the classification with the highest outflows for the month. It was bettered by Equity U.S. Small & Mid Cap (-$6.4 bn), Equity Sector Healthcare (-$4.7 bn), Equity Sector Gold & Precious Metals (-$3.5 bn), and Equity Sector Materials (-$3.0 bn).
As the bottom of the table is dominated by sector or themed classifications, this shows that ETF investors around the globe seem to prefer broader classifications over those following a specific investment topic. Nevertheless, the outflows from Equity Sector Gold & Precious Metals are somewhat surprising given the current upward trend for gold.
Assets Under Management by Promoters
A closer look at assets under management by promoters in the global ETF industry also showed high concentration, with only 191 of the 699 ETF promoters covered in this report holding assets at or above $1.0 bn, totalling $15,936.5 bn at the end of H1 2025. The largest ETF promoter in the global ETF industry—iShares ($4,803.0 bn)—accounted for 29.97% of the overall assets under management, ahead of the number-two promoter—Vanguard ($3,661.3 bn)—and the number-three promoter—SPDR ($1,729.5 bn).
Graph 8: The 10 Largest ETF Promoters by Assets Under Management, June 30, 2025 (USD Billions)
Source: LSEG Lipper
The 10-top promoters accounted for 80.22% of the overall assets under management in the global ETF industry. This meant, in turn, the other 689 fund promoters which had registered at least one ETF for sale over the observation period accounted for only 19.78% of the overall assets under management. These numbers show that the assets under management at the promoter level in the global ETF industry are somewhat more diversified than in the single regions.
ETF Flows by Promoters
Since the global ETF industry is highly concentrated with regard to the assets under management by promoter, it was not surprising that eight of the 10 largest promoters by assets under management were among the 10-top selling ETF promoters for H1 2025. iShares was the best-selling ETF promoter in the global ETF industry for the quarter (+$194.0 bn), ahead of Vanguard (+$189.4 bn) and JPMorgan (+$36.9 bn).
Graph 9: Ten Best-Selling ETF Promoters, H1 2025 (USD Billions)
Source: LSEG Lipper
The flows of the 10-top promoters accounted for estimated net inflows of $576.8 bn. As for the overall flow trend in H1 2025, it was clear that some of the 699 promoters (188) faced estimated net outflows (-$27.0 bn in total) over the course of the quarter.
Assets Under Management by Region
ETFs domiciled in North America ($12,039.4 bn) held the highest assets under management in the global ETF industry at the end of H1 2025. They were followed by ETFs domiciled in Europe ($2,581.3 bn), ETFs domiciled in the Asia Pacific region ($1,371.2 bn), ETFs domiciled in South and Central America ($19.9 bn), ETFs domiciled in Africa ($12.7 bn), while other domiciles held ($1.2 bn) in assets under management.
Graph 10: Assets Under Management in the Global ETF Industry by Region – June 30, 2025 (in bn USD)
Source: LSEG Lipper
These numbers showcase that the global ETF industry is a truly global industry with a high concentration of the assets under management in a few domiciles.
Estimated Net Flows by Region
By reviewing the estimated flows in the global ETF industry by fund domicile and the respective regions, one needs to bear in mind that some domiciles have specific advantages or disadvantages when it comes to ETF distribution. The U.S. is, for example, a single market and can take profit from the size of the overall market, while in Europe every market is or at least can be an ETF domicile, which means that the local markets are much smaller.
That said, the EU countries have established a fund regulation (Undertakings in Collective Investments and Transferable Securities, or UCITS) which enables the fund and ETF industry to cross-list all products which are registered for sale in one EU country into another EU country. Since UCITS has become such a well-recognized regulatory standard for mutual funds and ETFs, some countries in South and Central America, as well in Asia, allow UCITS funds to be cross-listed and sold to local investors. It is fair to say that there is no other regulatory framework available that allows funds to be distributed in various countries around the globe. Other mutual recognition agreements, such as those between Hong Kong and China or Hong Kong and Taiwan, are only bilateral and have no global reach. This means that the estimated flows for European ETFs also include flows from South and Central America, as well as from Asia.
Graph 11: Estimated Net Flows in the Global ETF Industry by Region, H1 2025 (in bn USD)
Source: LSEG Lipper
As one may expect from the assets under management, ETFs domiciled in North America (+$595.2 bn) enjoyed the highest estimated net inflows for H1 2025. They were followed by ETFs domiciled in Europe (+$166.5 bn), Asia Pacific (+$54.5 bn), South and Central America (+$1.2 bn), Africa (+$0.7 bn), and ETFs domiciled in other regions (+$0.02 bn).
Assets Under Management by Domicile
To investigate the concentration by region further, it makes sense to analyze the assets under management by domicile. As of the end of H1 2025, the U.S. was the largest single country ETF domicile ($11,564.8 bn) of the 42 ETF domiciles covered in this report, followed by Ireland ($1,871.8 bn), Japan ($644.9 bn), Luxembourg ($475.0 bn), and Canada ($474.6 bn). These five ETF domiciles account for assets under management of $15,031.1 bn, or 93.79%, of the overall assets under management in the global ETF industry.
Graph 12: Ten Largest ETF Domiciles by Assets Under Management – June 30, 2025 (in bn USD)
Source: LSEG Lipper
These numbers show that the assets under management in the global ETF industry are dominated by a small number of domiciles. Obviously, this concentration is caused by the time period over which ETFs are available in the single domiciles, as well the overall market size of these domiciles. That said, Ireland and Luxembourg are true global ETF hubs since ETFs registered under the UCITS regulation can be sold in various markets around the world.
Estimated Net Flows by Domicile
In more detail, the U.S. (+$550.3 bn) was as to be expected the single fund domicile with the highest estimated net inflows for H1. It was followed by Ireland (+$108.4 bn), Canada (+$44.9 bn), Luxembourg (+$40.0 bn), and Taiwan (+$18.0 bn).
Graph 13: The 10 ETF Domiciles with the Highest Estimated Net Inflows, H1 2025 (in bn USD)
Source: LSEG Lipper
The list of the 10 best-selling domiciles does an even better job of showcasing that ETFs are truly a global phenomenon since it shows that investors around the globe are using ETFs to implement their asset allocation views into their portfolios.
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.
