The European ETF industry enjoyed strong inflows over the course of May 2026 while global financial markets were shaped by a delicate balance between geopolitical tensions, constrained fiscal policy, and diverging central bank strategies. Equity markets continued to advance, supported by solid earnings and technology‑driven growth, while bond markets remained more cautious, reflecting persistent inflation and higher borrowing costs.
The conflict in the Middle East remained the dominant driver throughout the month. Disruptions to shipping routes and energy supply kept oil prices elevated, pushing up inflation expectations across major economies. Bond markets reacted swiftly, with government borrowing costs rising sharply—particularly in the United States, where 10‑year Treasury yields reached around 4.6%. These elevated yields unsettled investors and reinforced expectations that monetary policy would stay tight for longer.
Toward the end of May, however, sentiment improved as negotiations between the United States and Iran showed tentative progress. Oil prices eased, helping to stabilize markets and support a recovery in risk appetite.
At the same time, monetary policy paths continued to diverge across major economies. The Federal Reserve held rates steady at 3.50%–3.75%, maintaining a cautious stance as inflation remained uncertain and growth held up. Policymakers signalled that further rate cuts were no longer guaranteed, shifting toward a more neutral, slightly hawkish outlook.
In the euro area, the European Central Bank (ECB) also left rates unchanged at 2.0%, but discussions increasingly focused on whether further tightening might be required. Inflation, particularly in services, remained persistent, while the energy shock complicated the disinflation process. This kept the ECB firmly in a cautious, data‑dependent mode.
Japan remained on a different path. The Bank of Japan, after beginning its policy normalization in late 2025, held rates steady despite inflation around 2.5%. Political pressure grew during May, highlighting tensions between monetary independence and fiscal priorities as the government pushed for continued economic support.
These differing approaches, a policy pause in the U.S., tightening bias in , and gradual normalization in Japan, added to volatility in global bond markets and currency movements.
Fiscal policy provided little support. Most advanced economies entered 2026 with stretched public finances, limiting their ability to cushion the impact of higher energy prices. Rising bond yields further increased borrowing costs, reinforcing fiscal constraints and making markets more sensitive to interest‑rate expectations.
Against this backdrop, equity markets delivered another strong month. Robust corporate earnings and continued investment in artificial intelligence drove gains. Improving geopolitical sentiment and falling oil prices late in the month also helped, as investors became more confident that central banks would avoid aggressive tightening.
Bond markets, however, remained cautious. Yields stayed elevated after sharp increases earlier in the year, reflecting both inflation concerns and continued government issuance. Although yields eased slightly toward month end, they continued to weigh on valuations and investor confidence.
Emerging markets stood out as relative outperformers. Equity markets in Asia benefited from strong earnings and their key role in global technology supply chains, particularly in semiconductors. Stabilizing geopolitical conditions also supported risk appetite. In bond markets, higher global yields created pressure, but easing commodity prices and more stable inflation expectations helped attract selective inflows.
From a European ETF industry perspective, the performance of the underlying markets led, in combination with the estimated net flows, to increasing assets under management (from €2,859.3 bn as of April 30, 2026, to €3,025.0 bn at the end of May). At a closer look, the increase in assets under management of €165.7 bn for May was driven by the performance of the underlying markets (+€128.9 bn), while estimated net inflows added (+€36.8 bn) to the increase in assets under management.
Assets Under Management in the European ETF Industry
May 2026 marked a new record-breaking month for the European ETF industry, as the assets under management held in ETFs in Europe (€3,025.0 bn) surpassed for the first time the €3.0 tr milestone at the end of a month.
As for the overall structure of the European ETF industry, it was not surprising equity ETFs (€2,363.2 bn) held the majority of assets, followed by bond ETFs (€529.5 bn), commodities ETFs (€64.2 bn), money market ETFs (€52.8 bn), alternatives ETFs (€10.0 bn), and mixed-assets ETFs (€5.3 bn).
Graph 1: Market Share, Assets Under Management in the European ETF Segment by Asset Type, May 31, 2026
Source: LSEG Lipper
Given positive market environment over the course of the month, it is no surprise that the overall assets under management (AUM) in the European ETF industry as well as the AUM for all asset types with the exception of commodities ETFs have reached new month end all-time highs at the end of May 2026.
ETF Flows by Asset Type
The inflows into the European ETF industry over the course of May (+€36.8 bn) proved the trend of elevated inflows into ETFs in 2026 compared to previous years. The estimated net inflows for March were above the rolling 12-month average flows (€34.1 bn). Given the positive but volatile market environment, these inflows showcase that European ETF investors were in risk-on mode in May.
In addition to this, it is noteworthy that the general fund flow trend for the year is still set to reach a new all-time high on an annual basis at the end of the year. This showcases that the popularity of ETFs among European investors is still growing despite the already in general higher inflows over the course of the years 2024 and 2025.
The inflows in the European ETF industry for May were driven by equity ETFs (+€24.2 bn), followed by bond ETFs (+€9.9 bn), money market ETFs (+€2.5 bn), commodities ETFs (+€0.2 bn), alternatives ETFs (+€0.1 bn), and mixed-assets ETFs (+€0.02 bn).
Graph 2: Estimated Net Sales by Asset Type, May 1 – May 31, 2026 (Euro Billions)
Source: LSEG Lipper
Given the general market environment, it was not surprising to see that the estimated net inflows into ETFs were led by equity ETFs over the course of the month. In combination with the inflows into bond ETFs, this might be seen as a sign that European investors are in risk-on mode.
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 May, the European ETF market was split into 189 different peer groups. The highest assets under management at the end of May were held by ETFs classified as Equity U.S. (€712.2 bn), followed by Equity Global (€591.8 bn), Equity Europe (€241.3 bn), Equity Emerging Markets Global (€175.9 bn), and Equity Sector Information Technology (€81.4 bn). These five peer groups accounted for €1,802.8 bn, or 59.59%, of the overall assets under management in the European ETF segment, while the 10-top classifications by assets under management accounted for €2,061.8 bn, or 68.16%.
Overall, 16 of the 189 Lipper classifications each accounted for more than 1% of assets under management. In total, these 16 classifications accounted for €2,288.1 bn, or 75.64%, of the overall assets under management (Please read the article: Review of the Market Concentration of Assets Under Management in the European ETF Industry at the Classification Level for information on this topic).
Graph 3: Ten Largest Lipper Global Classifications by Assets Under Management, May 31, 2026 (Euro Billions)
Source: LSEG Lipper
More generally, 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.
Despite the fact that the rankings at the top of the league show some changes from time to time, these numbers show that the assets under management by Lipper global classifications continued to be highly concentrated in the European ETF industry.
The classifications 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, May 31, 2026 (Euro Billions)
Source: LSEG Lipper
ETF Flows by Lipper Global Classifications
The net inflows of the 10 best-selling Lipper classifications accounted for €30.0 bn. In line with the overall sales trend for May, equity peer groups (+€23.2 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 surprising to see Bond USD Government (+€1.1 bn) on the table of the 10 best-selling classifications for the month given the overall concerns on the amount of outstanding debt and the impact of possibly increasing interest rates in the U.S. That said, since Bond Global USD (+€1.3 bn) enjoyed even higher inflows, it looks like European ETF investors are expecting the U.S. dollar to stay strong against the euro.
Given the overall fund flow trend in the European ETF industry, it was not surprising that Equity Global (+€13.9 bn) was the best-selling Lipper global classification for May. It was followed by Equity U.S. (+€7.4 bn), Money Market EUR (+€1.7 bn), Bond Global USD (+€1.3 bn), and Equity Sector Information Technology (+€1.2 bn).
Generally speaking, it is surprising that Equity Europe is not on the table of the 10 best-selling Lipper classifications since the trend toward European equities is, in general, not broken. Nevertheless, Equity Europe (-€0.8 bn) was in fact the Lipper global classification with the second highest outflows for the month. Conversely, it was surprising to see Equity U.S. in one of the top spots on the list over the course of May.
After the relatively strong inflows into money market products over the last 18 months, it is not surprising to see Money Market EUR (+€1.7 bn) on the table of the 10 best-selling Lipper Global Classifications in the European ETF industry for the month.
Graph 5: Ten Best- and Worst-Lipper Global Classifications by Estimated Net Sales, May 1 – May 31, 2026 (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 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.
On the other side of the table, the 10 classifications with the highest estimated net outflows for May accounted for €4.4 bn in outflows, which was slightly above the outflows for April (-€4.0 bn).
Equity Switzerland (-€1.2 bn) was the classification with the highest outflows for the month. It was bettered by Equity Europe (-€0.8 bn), Equity Korea (-€0.6 bn), Bond USD Short Term (-€0.4 bn), and Commodity Precious Metals (-€0.3 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 37 of the 113 ETF promoters in Europe holding assets at or above €1.0 bn, accounting for €3,015.3 bn. Since Lipper has readjusted its definition of an ETF promoter, the number of ETF promoters in Europe has gone up sharply from 78 in April 2026 to 113 in May 2026, as we now also list ETF promoters which are using white label platforms for their products as standalone promoters. The largest ETF promoter in Europe—iShares (€1,238.3 bn)—accounted for 40.94% of the overall assets under management. This number is far ahead of the number-two promoter—Amundi ETF (€391.0 bn)—and the number-three promoter—Xtrackers (€311.6 bn). (To learn 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, May 31, 2026 (Euro Billions)
Source: LSEG Lipper
The 10-top promoters accounted for (€2,784.3 bn) 92.04% of the overall assets under management in the European ETF industry. This meant, in turn, the other 103 ETF promoters registering at least one ETF for sale in Europe accounted for only 7.96% of the overall assets under management.
ETF Flows by Promoters
Since the European ETF market is highly concentrated when it comes to assets under management by promoter, it was not surprising that nine of the 10 largest promoters by assets under management were among the 10-top selling ETF promoters for the month. iShares was the best-selling ETF promoter in Europe for May (+€11.0 bn), ahead of Xtrackers (+€4.7 bn) and Vanguard (+€4.1 bn).
Graph 7: Ten Best-Selling ETF Promoters, May 1 – May 31, 2026 (Euro Billions)
Source: LSEG Lipper
The flows of the 10-top promoters accounted for estimated net inflows of €33.9 bn. As for the overall flow trend for May, it was clear that some of the 113 promoters (20) faced estimated net outflows (-€1.3 bn in total) over the course of the month.
Assets Under Management by ETFs
There were 4,912 instruments (primary share classes [2,549] and convenience share classes [2,363]) listed as ETFs in the Lipper database at the end of May. Regarding the overall market pattern, it was not surprising assets under management at the ETF level were also highly concentrated. Only 541 of the 2,549 ETFs (primary share classes = portfolios = ETFs) held assets above €1.0 bn each. These ETFs accounted for €2,606.4 bn, or 86.16%, of the overall assets in the European ETF industry. The 10 largest ETFs in Europe accounted for €596.7 bn, or 19.73%, of the overall assets under management.
Graph 8: The 10 Largest ETFs by Assets Under Management, May 31, 2026 (Euro Billions)
Source: LSEG Lipper
Estimated Net Flows at the ETF Level
A total of 1,282 of the 2,549 ETFs (primary share classes = portfolios = ETFs) analyzed in this report showed net inflows of more than €10,000 each for May, accounting for inflows of €60.8 bn. This meant the other 1,267 instruments faced no flows, or net outflows, for the month. Upon closer inspection, only 140 of the 1,282 ETFs posting net inflows enjoyed inflows of more than €100 m over the course of May—for a total of €40.7 bn. The best-selling ETF for May was Vanguard FTSE All-World UCITS ETF, which enjoyed estimated net inflows of €2.6 bn. It was followed by State Street SPDR MSCI All Country World Index UCITS ETF (+€2.2 bn) and Invesco iShares Core S&P500 UCITS ETF (+€1.2 bn).
Graph 9: The 10 Best-Selling ETFs, May 1 – May 31, 2026 (Euro Billions)
Source: LSEG Lipper
The flow pattern at the fund level indicated there was a lot of turnover and rotation during the month, 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 €11.6 bn.
Given its size and the overall trend for net sales at the promoter level, it was not surprising that four of the 10 best-selling funds for May were issued by iShares. These iShares ETFs accounted for estimated net inflows of €4.0 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.
