2025 was a record-breaking year for the European ETF industry when it comes to estimated net inflows. That said, inflows often only follow the performance of the underlying markets, as an in-general positive market environment normally leads to high estimated net inflows.
With regard to this, it is worthwhile to review the performance of the ETFs registered for sale in Europe by asset type and Lipper global classification. As to be expected, there is a wide dispersion in the performance of the single ETFs, as the best performing ETFs showed a performance of positive147.62%, while the worst performing ETF lost 58.82%.
A closer look at the performance for 2025 by asset type shows that the performance of the best and worst funds in each category differ by a wide margin. As graph 1 shows, the best performing alternatives ETF (Amundi IBEX 35 Doble Apalancado Diario 2x UCITS ETF) had a performance of 125.06%, while its worst peer lost 58.82% in value. The best-performing bond ETF (iShares JP Morgan $ EM Bond UCITS ETF MXN H Acc) returned 20.70%, while the worst-performing bond ETF lost 19.51%. The best-performing commodities ETF (Swisscanto (CH) Silver ETF EAH EUR) returned a whopping 139.23%, while the worst commodities ETF lost 20.69%. The best-performing equity ETF (L&G Gold Mining UCITS ETF USD Acc) returned a stunning 147.62% and was the best-performing ETF in Europe overall, while the worst-performing equity ETF lost 28.93%. As to be expected, mixed-assets ETFs showed a more balanced performance over the course of the year, as the best-performing mixed-assets ETF (Amundi Multi-Asset Portfolio Offensive UCITS ETF) returned 12.38%, while the worst-performing mixed-assets ETF lost 6.26%. In the money market segment, the best-performing money market ETF (iShares $ Ultrashort Bond UCITS ETF MXN Hedged Acc) returned 11.57%, while the worst-performing money market ETF lost 8.50%. When looking at the numbers for bond and money market funds, one needs to bear in mind that these results can be heavily impacted by the results of the respective base or hedge currencies compared to the euro, as all calculations in this report are made in euros.
Graph 1: Performance of ETFs Registered for Sales in Euro by Asset Type, January 1, 2025 – December 31, 2025 (in %)
Source: LSEG Lipper, All calculations in EUR
A review of the average performance of the Lipper Global classifications within the single asset classes shows a much more detailed picture of the underlying performance drivers within the single asset types, as such an analysis unveils performance trends in a given market segment.
That said, such an analysis does not explain the differences between the best and the worst ETF in each classification since it does not focus on the selection process or investment approach (active vs passive) used to determine the constituents of the underlying index or the overall portfolio.
Lipper Global Alternatives Classifications
It is no surprise to see ETFs classified as Alternative Equity Leveraged (+35.80%) showed the highest average performance of all alternatives classifications within the volatile but positive market environment on the equity markets over the course of the year 2025. The same is true for the second-best performing alternatives classification Alternative Event Driven (+9.05%).
Graph 2: Average Performance of the Alternatives Lipper Global Classifications, January 1, 2025 – December 31, 2025 (in %)
Source: LSEG Lipper, All calculations in EUR
Since leveraged equity ETFs were leading the table it is almost logical that Alternative Dedicated Short Bias (-23.48%) will be on the opposite side of the table. Given the strong losses it is also no surprise that Alternative Cryptocurrency (-19.94%) showed the second worst average performance for the year. Given the performance of the underlying markets, it is surprising that Alternative Managed Futures (-16.25%) showed an on average negative performance since market neutral strategies are often seen as less risky than alternative investment strategies.
Lipper Global Bond Classifications
A view of the best average performances of the bond classifications shows that it made sense for investors to invest in bonds with a higher market or rating risk. The only exception here seems to be Bond SEK (+8.53%), but as mentioned before the performance of bond funds might be highly impacted by the movement of the base/hedged currency compared to the euro.
Graph 3: Average Performance of the 10 Best- and Worst Performing Bond Lipper Global Classifications, January 1, 2025 – December 31, 2025 (in %)
Source: LSEG Lipper, All calculations in EUR
Opposite to the best performing Lipper classifications, a view of the bottom of the table shows that not all risks paid off. Some risks materialized and harmed the overall performance of an investor’s portfolio. When it comes to this, it can be said somewhat the same risks which drove the performance of the top-performing bond ETFs also drove the performance of the worst performing ETFs. In addition to this, one also sees that the market risk of several niche markets did not pay out for a euro-oriented investor, even as these are more commonly used bond sectors such as Bond USD Municipal (-5.37%) or Bond GBP Inflation Linked (-4.11%). That said, one could argue that the negative results were caused by the strong performance of the euro compared to the U.S. dollar and the dollar-related currencies. But Bond Global EUR (-1.90%), a plain-vanilla bond classification, came in as the Lipper classification with the sixteenth worst average performance. This means there were also other performance drivers such as duration or rating responsible for the results within the different classifications.
Lipper Global Commodities Classifications
The average performances of the Lipper global classifications for the year 2025 in the commodities space were obviously driven by two main events—falling prices for energy and a massive increase in the prices for gold and silver.. Respectively, it is no surprise to see Commodity Precious Metals (+69.35%) leading the table, while Commodity Energy (-7.36%) showed the lowest performance of all commodities classifications.
Graph 4: Average Performance of the Commodities Lipper Global Classifications, January 1, 2025 – December 31, 2025 (in %)
Source: LSEG Lipper, All calculations in EUR
Lipper Global Equity Classifications
Given the developments in the prices of gold and silver, it is no surprise that Equity Sector Gold & Precious Metals (+133.63%) showed the highest average performance of all equity classifications. This is because increasing prices for precious metals are an additional source of revenue for miners since the increasing prices increase the face value of the inventory held by miners.
More generally speaking, the best-performing Lipper classifications show that 2025 was a regular year, as the top of the performance table is—with exception of the leader—made up of single countries and specific regions. This means in a year like 2025 any kind of diversification into the large developed markets and regions may have hit the possible reachable return of an investor’s portfolio, since a lot of the top performing classifications are from (riskier) niche markets, which are often not found in plain vanilla portfolios.
Graph 5: Average Performance of the 10 Best- and Worst Performing Equity Lipper Global Classifications, January 1, 2025 – December 31, 2025 (in %)
Source: LSEG Lipper, All calculations in EUR
With the exception of two sector and one themed classifications, the table of the 10 Lipper global classifications with the worst average performance for the year 2025 is also made up from single country funds. This shows that investors must carry out a very thoughtful selection process when investing on a country, sector, or themed basis. This also means that investors can avoid large drawdowns from single markets by using broadly diversified ETFs investing in all regions and sectors in their portfolios.
Lipper Global Mixed-Assets Classifications
A view of the table of the Lipper classifications with the best and the worst average performances for mixed-assets shows that all mixed-assets classifications seem to have achieved their investment goals, at least on average, since none of the Lipper global mixed-assets classifications show an on-average negative performance.
Graph 6: Average Performance of the Mixed-Assets Lipper Global Classifications, January 1, 2025 – December 31, 2025 (in %)
Source: LSEG Lipper, All calculations in EUR
Lipper Global Money Market Classifications
Even as money market is not a major asset type in the European ETF industry, it makes sense to quickly review the average results per Lipper global classification. As to be expected, the average returns for Money Market GBP (-1.31%) and Money Market USD (-4.08%) were negatively impacted by the strong performance of the euro compared to the base currencies.
Graph 7: Average Performance of the Money Market Lipper Global Classifications, January 1, 2025 – December 31, 2025 (in %)
Source: LSEG Lipper, All calculations in EUR
Since we are no longer in an environment with heavily inverted yield curves, it is clear that the returns for money market ETFs have normalized. Therefore, an average performance of positive1.32% for Money Market EUR can be seen as normal.
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.
