The European ETF industry enjoyed strong inflows over the course of the first half of 2026. A period which was dominated by macroeconomic themes. Geopolitics, inflation, fiscal sustainability and monetary policy were driving the markets. Within this environment global equities finished the period close to record highs, bond markets experienced significant volatility as investors reassessed inflation risks and the outlook for interest rates.
The biggest catalyst was the conflict in Iran and the disruption of shipping through the Strait of Hormuz. The closure of a route that carries a significant share of global oil exports sent energy prices sharply higher during the spring and reignited concerns that inflation would prove more persistent than previously expected. The resulting rise in oil, transport and insurance costs affected economies across the globe, forcing investors to re-evaluate the trajectory of growth and inflation.
Political developments helped reverse part of that shock by June. Diplomatic progress between the United States and Iran led to an agreement that reopened the Strait of Hormuz, triggering a steep decline in oil prices and easing fears of a prolonged supply disruption. Brent crude retreated toward pre-conflict levels, improving investor sentiment and supporting a broad rally in risk assets.
Monetary policy diverged substantially across the major economies. The Federal Reserve was at the centre of another important political development during the first half of 2026: the arrival of Kevin Warsh as the new Fed Chair. Warsh succeeded Jerome Powell in May, marking the beginning of a new chapter for U.S. monetary policy. Despite the leadership change, the Fed spent most of the period holding interest rates in the 3.50% to 3.75% range as policymakers grappled with the inflationary effects of the Middle East energy shock and a still resilient labour market. By mid-year, investors had largely abandoned expectations of imminent rate cuts and instead focused on the possibility that U.S. interest rates would remain elevated for longer than previously anticipated. The shift contributed to higher Treasury yields and periodic volatility in both bond and equity markets.
The European Central Bank moved in the opposite direction. After initially pausing its easing cycle, the ECB became increasingly concerned about renewed inflationary pressures linked to higher energy costs. In June it raised rates, signalling that price stability had once again become its primary concern despite weaker growth prospects across parts of the euro area. The move marked one of the most important policy shifts of the year and underscored the differing inflation dynamics between Europe and the United States.
Japan also moved away from ultra-loose monetary policy. The Bank of Japan continued its normalization process and raised rates to levels not seen since the mid-1990s. Higher inflation and concern over yen weakness encouraged policymakers to continue tightening, ending an era in which Japan had stood apart from the global rate cycle.
Fiscal policy remained a significant concern throughout the period. As bond yields rose in response to inflation concerns and central-bank policy uncertainty, debt-servicing costs increased across major economies. Investors increasingly scrutinised government borrowing plans, particularly in the United States and Europe, contributing to periodic bouts of bond-market volatility.
Equity markets proved remarkably resilient. Artificial intelligence remained the dominant investment theme, although leadership shifted from the largest technology platforms toward semiconductor, memory and infrastructure providers benefiting from AI spending. European shares outperformed during periods when oil prices fell, while U.S. equities were supported by strong corporate earnings and persistent investor demand for technology-related assets. By the end of June, many major indices were trading near record highs despite the geopolitical turbulence earlier in the year.
Bond markets told a more complicated story. Sovereign yields climbed sharply during the energy shock before stabilising as oil prices retreated. Investors remained cautious, given continued inflation uncertainty, fiscal pressures and increasingly divergent central-bank policies. Global government bonds delivered mixed returns, while corporate credit generally held up better thanks to resilient economic growth and healthy corporate balance sheets.
By the end of H1 2026, investors had become cautious over sector and single company risks but were still in risk-on mode. The focus shifted to whether inflation would continue to moderate and whether central banks could engineer a soft landing while governments grappled with growing fiscal burdens.
Assets Under Management in the European ETF Industry
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 €2,578.3 bn as of December 31, 2025, to €3,099.5 bn at the end of June) over the course of H1 2026. At a closer look, the increase in assets under management of €521.2 bn for H1 2026 was driven by the performance of the underlying markets (+€299.5 bn), while the estimated net inflows added €221.7 bn to the assets under management.
Graph 1: Assets Under Management in the European ETF Industry, January 1, 2000 – June 30, 2026 (Euro Billions)
Source: LSEG Lipper
Q2 2026 marked a new record-breaking quarter for the European ETF industry, as the assets under management held in ETFs in Europe surpassed the €3.0 trn milestone for the first time in May and reached €3,099.5 bn at the end of June.
As for the overall structure of the European ETF industry, it was not surprising equity ETFs (€2,430.0 bn) held the majority of assets, followed by bond ETFs (€542.3 bn), commodities ETFs (€57.5 bn), money market ETFs (€54.1 bn), alternatives ETFs (€10.3 bn), and mixed-assets ETFs (€5.4 bn).
Graph 2: Market Share, Assets Under Management in the European ETF Segment by Asset Type, June 30, 2026
Source: LSEG Lipper
Given the volatile market environment over the course of the first half of 2026, it is somewhat surprising that the former records for the overall assets under management in the European ETF industry as well as for most single asset types (alternatives, bonds, equities, and mixed-assets) were broken at the end of Q2 2026.
ETF Flows by Asset Type
The inflows into the European ETF industry over the course of H1 2026 (+€221.7 bn) are on course to reach a new annual all-time high at the end of 2026. Unsurprisingly, March 2026 was the month with the lowest inflows into ETFs (+€10.5 bn) for 2026 so far. Nevertheless, the inflows for March showcase how resilient the fund flows into ETFs in Europe are, especially if one takes into account that mutual funds in Europe witnessed overall outflows for the same month.
Graph 3: Monthly Estimated Net Sales, January 1 – June 30, 2026 (Euro Billions)
Source: LSEG Lipper
Despite the somewhat rough market environment, the inflows in the European ETF industry for H1 2026 were driven by equity ETFs (+€170.8 bn), followed by bond ETFs (+€39.0 bn), money market ETFs (+€11.1 bn), commodities ETFs (+€0.6 bn), mixed-assets ETFs (+€0.2 bn), and alternatives ETFs (+€0.02 bn).
Graph 4: Estimated Net Sales by Asset Type, January 1 – June 30, 2026 (Euro Billions)
Source: LSEG Lipper
Given the general market environment, it was somewhat surprising to see that the estimated net inflows into ETFs were led by such a wide margin by equity ETFs. That said, the relatively high inflows into money market products might be a sign for a flight to safe havens by European investors to avoid volatility in the bond markets or possibly rising rates, as the inflation may rise given the increase in the price of oil.
As graph 5 shows, equity ETFs enjoyed inflows in each of the six months of the first half of 2026, while bond ETFs faced outflows in March. The graph also shows that the inflows in equity ETFs were somewhat stable over the course of January and February and slowed down over the course of March, just to return to a stable pattern for the rest of H1 2026. The slowdown in March was mainly driven by the start of the war in the Middle East. Nevertheless, the flows in equity ETFs stayed positive, which once again showed the resilience of ETF flows in times of market turmoil. This might be seen as a sign that European investors like the liquidity, tradability, and transparency of ETFs, especially in times when markets are rough.
Graph 5: Monthly Estimated Net Sales by Asset Type, January 1, 2026 – June 30, 2026 (USD billions)
Source: LSEG Lipper
The trend for the estimated net flows over the course of H1 2026 was somewhat surprising. Especially the high inflows for January (+€48.2 bn) and February (+€48.7 bn), as both months were setting a new record for monthly inflows into ETFs in Europe and brought the inflows into ETFs to a new level. That said, the old record for monthly inflows into ETFs in Europe stood at €39.6 bn (October 25).
These flows showed that the adoption of ETFs by all kind of investors is further increasing in Europe despite the opinion of some market observers who may see a saturation in the use of ETFs or a shift in sentiment toward actively managed mutual funds.
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 June, the European ETF market was split into 191 different peer groups. The highest assets under management at the end of June were held by ETFs classified as Equity U.S. (€732.2 bn), followed by Equity Global (€616.1 bn), Equity Europe (€248.2 bn), Equity Emerging Markets Global (€177.2 bn), and Equity Sector Information Technology (€85.5 bn). These five peer groups accounted for €1,859.2 bn, or 59.98%, of the overall assets under management in the European ETF segment, while the 10-top classifications by assets under management accounted for €2,124.4 bn, or 68.54%.
Overall, 16 of the 191 Lipper classifications each accounted for more than 1% of assets under management. In total, these 16 classifications accounted for €2,352.4 bn, or 75.90%, 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 6: Ten Largest Lipper Global Classifications by Assets Under Management, June 30, 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 7: Ten Smallest Lipper Global Classifications by Assets Under Management, June 30, 2026 (Euro Billions)
Source: LSEG Lipper
ETF Flows by Lipper Global Classifications
The net inflows of the 10 best-selling Lipper classifications accounted for €154.4 bn. In line with the overall sales trend for H1 2026, equity peer groups (+€139.0 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 only one bond classification (Bond Global USD +€7.1 bn) on the table of the 10 best-selling classifications for the first half of 2026, taking the general market sentiment into account. Given the overall fund flow trend in the European ETF industry, it was somewhat surprising that Equity Global (+€65.9 bn) was the best-selling Lipper global classification for H1 2026, since this spot was held by Equity U.S. for a long time. Nevertheless, Equity U.S. (+€27.9 bn), was the second best-selling Lipper classification for the year so far, followed by Equity Emerging Markets Global (+€15.7 bn), Money Market EUR (+€8.4 bn), and Bond Global USD (+€7.1 bn).
Generally speaking, it is not surprising that Equity Europe (+€7.1 bn), is on the table of the 10 best-selling Lipper classifications given the overall market trend of increasing flows into ETFs investing in Europe and the good performance of European equities. That said, it looks like this trend has started to revert, since Equity Europe faced outflows in each month of Q2 2026. In addition to this, it is also not surprising to see Equity Sector Industrials on the list of the 10 best-selling classifications for H1 2026, since the classification profited from the strong inflows into defense-related ETFs and the overall sector rotation toward classic value sectors.
The general trend of inflows into money market products continued over the course of the first half of 2026. 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 (+€8.4 bn) on the table of the 10 best-selling classifications in the European ETF industry.
Graph 8: Ten Best- and Worst-Lipper Global Classifications by Estimated Net Sales, January 1 – June 30, 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 long-term 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 H1 2026 accounted for €9.1 bn in outflows.
Equity Sector Financials (-€2.4 bn) was the classification with the highest outflows for the month. It was bettered by Commodity Precious Metals (-€1.4 bn), Equity Germany Small & Mid Cap (-€1.2 bn), Equity China (-€1.1 bn), and Equity Sector Gold & Precious Metals (-€1.0 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 39 of the 108 ETF promoters in Europe holding assets at or above €1.0 bn, accounting for €3,088.0 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, 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 (€1,265.0 bn)—accounted for 40.81% of the overall assets under management. This number is far ahead of the number-two promoter—Amundi ETF (€402.0 bn)—and the number-three promoter—Xtrackers (€320.7 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 9: The 10 Largest ETF Promoters by Assets Under Management, March 31, 2026 (Euro Billions)
Source: LSEG Lipper
The 10-top promoters accounted for (€2,859.0 bn) 92.24% of the overall assets under management in the European ETF industry. This meant, in turn, the other 98 ETF promoters registering at least one ETF for sale in Europe accounted for only 7.76% 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 eight 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 H1 2026 (+€65.7 bn), ahead of Amundi ETF (+€28.5 bn) and Vanguard (+€21.3 bn).
Graph 10: Ten Best-Selling ETF Promoters, January 1 – June 30, 2026 (Euro Billions)
Source: LSEG Lipper
The flows of the 10-top promoters accounted for estimated net inflows of €14.4 bn. As for the overall flow trend for H1 2026, it was clear that some of the 118 promoters (26) which were active in the European ETF industry over the course of the first half of faced estimated net outflows (-€2.4 bn in total) over H1 2026.
Assets Under Management by ETFs
There were 4,989 instruments (primary share classes [2,578] and convenience share classes [2,411]) listed as ETFs in the Lipper database at the end of June. Regarding the overall market pattern, it was not surprising assets under management at the ETF level were also highly concentrated. Only 554 of the 2,578 ETFs (primary share classes = portfolios = ETFs) held assets above €1.0 bn each. These ETFs accounted for €2,679.1 bn, or 86.44%, of the overall assets in the European ETF industry. The 10 largest ETFs in Europe accounted for €612.3 bn, or 19.75%, of the overall assets under management.
Graph 11: The 10 Largest ETFs by Assets Under Management, June 30, 2026 (Euro Billions)
Source: LSEG Lipper
Estimated Net Flows at the ETF Level
A total of 1,719 of the 2,578 ETFs (primary share classes = portfolios = ETFs) which were active in the European ETF industry over the course of H1 2026 showed net inflows of more than €10,000 each for the first half of 2026, accounting for inflows of €293.0 bn. This meant the other 859 instruments faced no flows, or net outflows, for the month. Upon closer inspection, only 521 of the 1,719 ETFs posting net inflows enjoyed inflows of more than €100 m over the course of H1 2016—for a total of €263.5 bn. The best-selling ETF for H1 2026 was Vanguard FTSE All-World UCITS ETF, which enjoyed estimated net inflows of €14.0 bn. It was followed by State Street SPDR MSCI All Country World UCITS ETF (+€6.3 bn) and iShares MSCI ACWI UCITS ETF (+€5.0 bn).
Graph 12: The 10 Best-Selling ETFs, January 1 – June 30, 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 €49.7 bn.
Given its size and the overall trend for net sales at the promoter level, it was surprising that only two of the 10 best-selling funds for H1 2026 were issued by iShares. These iShares ETFs accounted for estimated net inflows of €7.8 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.
