August 2025 was another month with strong inflows for the European ETF industry.
These inflows occurred in a volatile but overall positive market environment in which investors around the globe acted nervous over any political and economic news. In more detail, global markets entered August with a wary eye on inflation, monetary policy, and geopolitics. By month’s end, equities had mostly advanced, bonds saw a sharp repricing of yields, and investors were left weighing whether the world economy was entering a new phase of resilience or fragility.
For most investors the speech of Federal Reserve Chair Jerome Powell at the annual Jackson Hole conference on August 22 was one of the most important events of the month. A lot of investors were surprised when Powell struck a more dovish tone than many had anticipated, acknowledging that monetary policy may now be restrictive and hinting at possible adjustments. That single intervention helped drive down shorter-dated Treasury yields and revived expectations for a September rate cut.
The strong results presented during the earnings season drove the trends on the equities markets. Around three-quarters of S&P 500 companies beat second-quarter earnings forecasts, demonstrating that profit growth remains intact even as the macro environment cools. That said, technology remained volatile since investors had to manage a delicate balance between optimism and caution.
European equities and bonds were buffeted by mixed macroeconomic data. The eurozone composite PMI remained just above the critical 50 level, indicating modest growth. That resilience, alongside easing inflation, gave the European Central Bank some room to maneuver. Yet investors were wary: fiscal strains in several member states and concerns over the long-term debt trajectory kept upward pressure on long-dated yields. In addition to this, the unclear political situation in France has added some volatility to the European bond markets.
The performance of European equities was steadier than many expected, particularly in financials and industrials. That said, the performance of the industry sector industrials was clearly driven by the performance of producers of weapons and other military equipment. A softer U.S. dollar also offered relief for euro-denominated assets. But the region remains sensitive to global trade shifts, especially as Washington pursued reciprocal tariffs with trading partners, adding a layer of uncertainty for export-heavy economies such as Germany.
Asia delivered both surprises and headwinds. Japan’s second-quarter GDP beat forecasts, and core machinery orders rose, hinting at underlying strength. Equity markets in Tokyo gained as a result, aided by a weaker yen.
China, however, remained a source of volatility. Ongoing trade negotiations with the United States saw a temporary truce, supporting risk sentiment. Yet concerns about domestic demand and property-sector fragility lingered. Broader emerging Asia benefited from a weaker dollar, which lifted both equities and local-currency bonds. Investors also noted that capital inflows into Asian debt markets increased as the Fed’s dovish tilt reduced pressure on local currencies. That said, it looks like the decline of the U.S. dollar was the pivotal driver for the good performance of securities markets in the emerging markets. Local-currency bonds rallied, and credit spreads tightened as investors sought higher yields in a supportive currency environment. Still, risks remained: new U.S. tariffs on India over Russian oil imports underscored how geopolitics can quickly cut across improving fundamentals.
By the close of August, markets had absorbed a potent mix of dovish central-bank rhetoric, solid earnings, and ongoing geopolitical uncertainty. Equities advanced globally, while bonds staged a rally at the short end but continued to wrestle with fiscal concerns further out the curve. Investors head into autumn with optimism about growth resilience, but also with an awareness that stretched valuations, rising debt burdens, and political flashpoints could quickly reverse sentiment.
From an ETF industry perspective, the performance of the underlying markets led, in combination with the estimated net flows, to increasing assets under management (from €2,285.0 bn as of July 31, 2025, to €2,315.4 bn at the end of August). At a closer look, the increase in assets under management of €30.4 bn for August was driven by the estimated net inflows (+€25.0 bn), while the performance of the underlying markets added €5.5 bn to the increase in assets under management.
Assets Under Management by Asset Type
As for the overall structure of the European ETF industry, it was not surprising equity ETFs (€1,757.8 bn) held the majority of assets, followed by bond ETFs (€430.7 bn), money market ETFs (€69.0 bn), commodities ETFs (€44.5 bn), alternatives ETFs (€9.2 bn), and mixed-assets ETFs (€4.3 bn).
Given the current market environment, it is no surprise that the overall assets under management in the European ETF industry (€2,315.4 bn) hit a new all-time high at the end of the month. When it comes to this, it is noteworthy that the assets under management for all asset types, with the exception of alternatives and commodities, reached a new all-time high.
Graph 1: Market Share, Assets Under Management in the European ETF Segment by Asset Type, August 30, 2025
Source: LSEG Lipper
ETF Flows by Asset Type
Within the current market conditions, the European ETF industry enjoyed healthy estimated net inflows (+€25.0 bn) over the course of August. That said, these inflows were below the rolling 12-month average (€26.3 bn). These inflows drove the overall inflows in ETFs up to €204.7 bn for the year 2025 so far.
If European ETFs can maintain their current level of inflows, the overall inflows for the year 2025 will reach a new all-time high, with estimated net inflows between €300.0 bn and €320.0 bn.
The inflows in the European ETF industry for August were once again driven by equity ETFs (+€17.2 bn), followed by bond ETFs (+€5.6 bn), money market ETFs (+€1.8 bn), commodities ETFs (+€0.3 bn), mixed-assets ETFs (+€0.1 bn), and alternatives ETFs (+€0.1 bn).
Graph 2: Estimated Net Sales by Asset Type, August 2025 (Euro Billions)
Source: LSEG Lipper
Given the current market environment, it was no surprise to see high inflows into ETFs led by equity products over the course of August 2025. This investor behavior repeats a trend we have seen in the past where ETFs enjoyed high inflows during times of unstable market conditions.
Assets Under Management by Lipper Global Classifications
In order to examine the European ETF markets in further detail, a review of the Lipper global classifications will lead to more insights on the structure and concentration of assets within the European ETF industry. At the end of August 2025, the European ETF market was split into 178 different peer groups. The highest assets under management at the end of August were held by funds classified as Equity U.S. (€56926 bn), followed by Equity Global (€426.9 bn), Equity Europe (€111.1 bn), Equity Emerging Markets Global (€102.5 bn), and Equity Eurozone (€82.7 bn). These five peer groups accounted for 55.82% of the overall assets under management in the European ETF segment, while the 10-top classifications by assets under management accounted for 65.63%.
Overall, 17 of the 178 peer groups each accounted for more than 1% of assets under management. In total, these 17 peer groups accounted for €1,735.7 bn, or 74.96%, of the overall assets under management.
Graph 3: Ten Largest Lipper Global Classifications by Assets Under Management, August 30, 2025 (Euro Billions)
Source: LSEG Lipper
In addition, it was noteworthy that the rankings of the largest classifications saw some movement in single positions over the last few years. As the positions of the classifications had been quite stable in the past, this indicates that European investors use ETFs to trade according to their market views. Even as some of these positions might be core holdings, once investors got into risk-off mode they also reduced their exposure to core asset classes.
That said, the ranking changes at the top of the league table which happened during the COVID-19 pandemic have started to reverse. Nevertheless, these numbers showed assets under management by Lipper global classifications continued to be highly concentrated in the European ETF industry.
The peer groups on the other side of the table showed some funds in the European 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 (Please read our report: “Will the ETFs in the Smallest Lipper Classifications in the European ETF Industry Survive?” for more details on this topic).
Graph 4: Ten Smallest Lipper Global Classifications by Assets Under Management, August 30, 2025 (Euro Billions)
Source: LSEG Lipper
ETF Flows by Lipper Global Classifications
The net inflows of the 10 best-selling Lipper classifications accounted for €18.0 bn. In line with the overall sales trend for August, equity peer groups (+€14.4 bn) dominated the flows by asset type on the table of the 10 best-selling peer groups by estimated net inflows. That said, it was somewhat surprising that Money Market USD was more highly ranked than the best-selling bond classification on the table of the 10 best-selling classifications for the month. Given the overall fund flow trend in the European ETF industry, it was not surprising that Equity U.S. (+€6.7 bn) was the best-selling Lipper global classification for August. It was followed by Equity Global (+€5.4 bn) and Money Market USD (+€1.1 bn).
Generally speaking, it is not surprising that Equity U.S. is back on the top spot on the table of the 10 best-selling Lipper classifications given its status as core market and the strong recovery of the market after the turmoil in April 2025, as well as the good results reported during the last earnings season. Equity Eurozone was not on this table until the end of 2024. That said, the tide has changed ever since as there has been a trend toward investing in European equities established over the course of the first half of 2025.
The flows into money market products in the European ETF industry have further normalized over the course of August. Given the weakening U.S. dollar, it is somewhat surprising to see Money Market USD (+€1.1 bn) out selling Money Market EUR (+€0.7 bn) on the list of the top selling Lipper classifications. That said, one needs to bear in mind that money market products are in general not a core asset type within the European ETF industry.
Graph 5: Ten Best- and Worst-Lipper Global Classifications by Estimated Net Sales, August 2025 (Euro Billions)
Source: LSEG Lipper
More generally, these numbers showed the European ETF segment is also highly concentrated when it comes to fund 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.
On the other side of the table, the 10 peer groups with the highest estimated net outflows for August accounted for €1.3 bn in outflows. These outflows were below the outflows for the 10 peer groups with the highest outflows for July 2025 (-€3.8 bn).
Bond USD Government Short Term (-€0.4 bn) was the classification with the highest outflows for the month. It was bettered by Commodity Other (-€0.2 bn), Bond Global EUR (-€0.1 bn), Equity India (-€0.1 bn), and Equity Sector Energy (-€0.1 bn).
Assets Under Management by Promoters
A closer look at assets under management by promoters in the European ETF industry also showed high concentration, with only 29 of the 63 ETF promoters in Europe holding assets at or above €1.0 bn. The largest ETF promoter in Europe—iShares (€984.6 bn)—accounted for 42.52% of the overall assets under management, far ahead of the number-two promoter—Amundi ETF (€292.7 bn)—and the number-three promoter—Xtrackers (€247.9 bn). (To earn more about the concentration of the European ETF market at the promoter level, please read our report: Review of the concentration of the assets under management in the European ETF industry on promoter level).
Graph 6: The 10 Largest ETF Promoters by Assets Under Management, August 30, 2025 (Euro Billions)
Source: LSEG Lipper
The 10-top promoters accounted for 93.45% of the overall assets under management in the European ETF industry. This meant, in turn, the other 53 fund promoters registering at least one ETF for sale in Europe accounted for only 6.55% of the overall assets under management.
ETF Flows by Promoters
Since the European ETF market is highly concentrated with regard to the assets under management by promoter, it was not surprising that all 10 of the 10 largest promoters by assets under management were among the 10-top selling ETF promoters for August. iShares was the best-selling ETF promoter in Europe for August (+€9.0 bn), ahead of Xtrackers (+€2.8 bn) and SPDR (+€2.4 bn).
Graph 7: Ten Best-Selling ETF Promoters, August 2025 (Euro Billions)
Source: LSEG Lipper
The flows of the 10-top promoters accounted for estimated net inflows of €22.3 bn. As for the overall flow trend in August, it was clear that some of the 63 promoters (six) faced estimated net outflows (-€0.1 bn in total) over the course of the month.
Assets Under Management by ETFs
There were 4,376 instruments (primary share classes [2,172] and [convenience] share classes [2,2204]) listed as ETFs in the Lipper database at the end of August. Regarding the overall market pattern, it was not surprising assets under management at the ETF level were also highly concentrated. Only 465 of the 2,172 ETFs (primary share classes = portfolios) held assets above €1.0 bn each. These ETFs accounted for €1,960.0 bn, or 84.65%, of the overall assets in the European ETF industry. The 10 largest ETFs in Europe accounted for €466.7 bn, or 20.16%, of the overall assets under management.
Graph 8: The 10 Largest ETFs by Assets Under Management, August 30, 2025 (Euro Billions)
Source: LSEG Lipper
Estimated Net Flows at ETF Level
A total of 1,096 of the 2,172 ETFs (primary share classes = portfolios) analyzed in this report showed net inflows of more than €10,000 each for August, accounting for inflows of €37.8 bn. This meant the other 1,076 instruments faced no flows, or net outflows, for the month. Upon closer inspection, only 95 of the 1,096 ETFs posting net inflows enjoyed inflows of more than €100 m during August—for a total of €22.4 bn. The best-selling ETF for August was iShares Core MSCI World UCITS ETF USD, which enjoyed estimated net inflows of €1.1 bn. It was followed by Vanguard FTSE All-World UCITS ETF USD (+€1.1 bn) and SPDR S&P 500 UCITS ETF (+€1.0 bn).
Graph 9: The 10 Best-Selling ETFs, August 2025 (Euro Billions)
Source: LSEG Lipper
The flow pattern at the fund level indicated there was a lot of turnover and rotation during August, but it also showed the concentration of the European ETF industry even better than the statistics at the promoter or classification levels since the 10 best-selling ETFs account for inflows of €7.3 bn.
Given its size and the overall trend for net sales at the promoter level, it was not surprising that five of the 10 best-selling funds for August were promoted by iShares. These iShares ETFs accounted for estimated net inflows of €3.8 bn.
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.
