The European ETF industry enjoyed very strong inflows over the course of July.
Global financial markets made little overall progress in July 2026, but the modest headline moves concealed a sharp change in leadership. Renewed tension between the United States and Iran drove oil prices higher, revived inflation fears, and pushed government bond yields up. At the same time, investors moved away from highly valued technology shares and towards energy, financial, and other value-oriented sectors.
Geopolitics once again supplied the month’s main shock. The resumption of US-Iran hostilities raised concerns about oil production and shipping through the Middle East. Brent and West Texas Intermediate crude rose by more than 20%, reversing much of June’s decline. Energy shares benefited, but the rise in oil complicated the outlook for inflation and economic growth, particularly in energy-importing Europe and Japan. Markets nevertheless appeared to assume that the confrontation would stop short of another full-scale disruption to global supplies.
In the United States, the Federal Reserve kept the federal funds target at 3.50% to 3.75% during its July meeting. Its statement described economic activity as solid but said inflation remained above the 2% objective, partly because of supply-driven increases in energy prices. The decision exposed a notable division within the Federal Open Market Committee: three members voted for an immediate quarter-point increase. That split strengthened expectations that US rates could remain high for longer and contributed to rising Treasury yields.
The European Central Bank also remained on hold, leaving its deposit rate at 2.25% during it’s July meeting after raising it by 25 basis points (bps) in June. The ECB warned that energy prices were still well above their pre-conflict levels and that the full inflationary effects had yet to emerge. Its balance-sheet reduction continued as maturing bonds under the APP and PEPP programs were no longer reinvested. That combination of restrictive rates and declining central-bank holdings limited support for eurozone government debt, even as subdued growth restrained the rise in yields.
The Bank of Japan maintained its overnight rate at around 1% during it’s July meeting. The Bank of Japan (BoJ) expected higher oil prices, wage increases, semiconductor costs, and the weaker yen to keep inflation above 2% during the second half of the fiscal year. Japanese bonds, therefore, remained vulnerable to expectations of additional tightening.
With regard to this, it was no surprise that global government and corporate bonds declined in general.
Fiscal policy added another source of unease. Higher defense and infrastructure spending supported parts of the European economy, but expanding borrowing requirements left sovereign markets sensitive to debt sustainability and issuance. In Japan, government measures to reduce household energy bills moderated the near-term inflation forecast but transferred part of the burden to the public finances.
Equity performance reflected these shifts, as investors questioned whether the earnings generated by artificial-intelligence investment justified elevated technology valuations. Energy and financial companies advanced instead, supported by higher commodity prices, resilient earnings, and more moderate valuations. As a result US shares were broadly flat, with the S&P 500 losing 0.1%, while markets outside the United States performed better. Hence, the MSCI World Index gained 0.5% in U.S. dollar terms over the course of the month.
July’s message was clearest in the bond market. The inflation shock had not passed, central banks were reluctant to ease, and governments still needed substantial financing. Equities absorbed that combination through a rotation rather than a broad selloff. Bonds had less room to escape.
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 €3,099.5 bn as of June 30, 2026, to €3,120.8 bn at the end of July). At a closer look, the increase in assets under management of €21.3 bn for July was driven by estimated net inflows (+€49.3 bn), while the negative average performance of the underlying markets deducted €28.0 bn from the assets under management.
Assets Under Management in the European ETF Industry
July 2026 marked a new record-breaking month for the European ETF industry, as the assets under management held in ETFs in Europe reached €3,120.8 bn at the end of the month.
As for the overall structure of the European ETF industry, it was not surprising equity ETFs (€2,444.4 bn) held the majority of assets, followed by bond ETFs (€545.0 bn), commodities ETFs (€59.4 bn), money market ETFs (€56.3 bn), alternatives ETFs (€10.2 bn), and mixed-assets ETFs (€5.4 bn).
Graph 1: Market Share, Assets Under Management in the European ETF Segment by Asset Type, July 31, 2026
Source: LSEG Lipper
Given the negative 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 bond, equity, and mixed-assets ETFs have reached new month end all-time highs at the end of July 2026.
ETF Flows by Asset Type
The inflows into the European ETF industry over the course of July (+€49.3 bn) proved the trend of elevated inflows into ETFs in 2026 compared to previous years. In fact, the inflows into ETFs for July, were the highest monthly inflows into ETFs in Europe on record. As expected from this, the estimated net inflows for July was above the rolling 12-month average flows (+€37.6 bn). Given the negative market environment, these inflows showcase that European ETF investors were further in risk-on mode in July.
In addition to this, it is noteworthy that the general fund flow trend for the year is 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 July were driven by equity ETFs (+€37.2 bn), followed by bond ETFs (+€8.7 bn), money market ETFs (+€2.1 bn), commodities ETFs (+€1.0 bn), alternatives ETFs (+€0.2 bn), and mixed-assets ETFs (+€0.1 bn).
Graph 2: Estimated Net Sales by Asset Type, July 1 – July 31, 2026 (Euro Billions)
Source: LSEG Lipper
Despite 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 further 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 July, the European ETF market was split into 189 different peer groups. The highest assets under management at the end of July were held by ETFs classified as Equity U.S. (€731.9 bn), followed by Equity Global (€624.9 bn), Equity Europe (€251.4 bn), Equity Emerging Markets Global (€174.0 bn), and Equity Sector Information Technology (€80.0 bn). These five peer groups accounted for €1,862.3 bn, or 59.67%, of the overall assets under management in the European ETF segment, while the 10-top classifications by assets under management accounted for €2,131.1 bn, or 68.29%.
Overall, 16 of the 191 Lipper classifications each accounted for more than 1% of assets under management. In total, these 16 classifications accounted for €2,364.2 bn, or 75.78%, 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, July 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 table 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, July 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 €37.5 bn. In line with the overall sales trend for July, equity peer groups (+€34.4 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 surprising to see only one 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 Global (+€12.6 bn) was the best-selling Lipper global classification for July. It was followed by Equity U.S. (+€10.4 bn), Equity Emerging Markets Global (+€3.7 bn), Equity Europe (+€1.9 bn), and Money Market EUR (+€1.8 bn).
Generally speaking, it is surprising that Equity Europe is on the table of the 10 best-selling Lipper classifications since the classification was out of favor of European investors for the last three months. Hence, it looks like the outflows from Equity Europe were not a long-term trend.
Graph 5: Ten Best- and Worst-Lipper Global Classifications by Estimated Net Sales, July 1 – July 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 July accounted for €2.5 bn in outflows, which was above the outflows for May (-€5.2 bn).
Equity China (-€0.8 bn) was the classification with the highest outflows for the month. It was bettered by Equity Europe ex UK (-€0.4 bn), Equity Germany (-€0.2 bn), Equity Emerging Markets Asia (-€0.2 bn), and Equity Emerging Markets Latin America (-€0.2 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 42 of the 119 ETF promoters in Europe holding assets at or above €1.0 bn, accounting for €3,108.1 bn. It is noteworthy that Lipper has readjusted its definition of an ETF promoter. As a result, the number of ETF promoters in Europe has gone up sharply in April 2026 (78), 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 (€1,266.5 bn)—accounted for 40.58% of the overall assets under management. This number is far ahead of the number-two promoter—Amundi ETF (€403.1 bn)—and the number-three promoter—Xtrackers (€325.9 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, July 31, 2026 (Euro Billions)
Source: LSEG Lipper
The 10-top promoters accounted for (€2,880.1 bn) 92.29% of the overall assets under management in the European ETF industry. This meant, in turn, the other 109 ETF promoters registering at least one ETF for sale in Europe accounted for only 7.71% 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 July (+€14.5 bn), ahead of Xtrackers (+€7.2 bn) and Vanguard (+€7.1 bn).
Graph 7: Ten Best-Selling ETF Promoters, July 1 – July 31, 2026 (Euro Billions)
Source: LSEG Lipper
The flows of the 10-top promoters accounted for estimated net inflows of €45.2 bn. As for the overall flow trend for July, it was clear that some of the 119 promoters (18) faced estimated net outflows (-€0.6 bn in total) over the course of the month.
Assets Under Management by ETFs
There were 5,041 instruments (primary share classes [2,608] and convenience share classes [2,433]) listed as ETFs in the Lipper database at the end of July. Regarding the overall market pattern, it was not surprising assets under management at the ETF level were also highly concentrated. Only 551 of the 2,608 ETFs (primary share classes = portfolios = ETFs) held assets above €1.0 bn each. These ETFs accounted for €2,688.8 bn, or 86.16%, of the overall assets in the European ETF industry. The 10 largest ETFs in Europe accounted for €615.1 bn, or 19.71%, of the overall assets under management.
Graph 8: The 10 Largest ETFs by Assets Under Management, July 31, 2026 (Euro Billions)
Source: LSEG Lipper
These numbers show that only a small number of ETFs have been able to gather a significant amount of assets under management so far, since only 21.13% of the available ETFs holding more than €1.0 bn in AUM, while only 45 ETFs (1.73% of all available ETFs) are holding more than €10.0 bn in assets under management.
Estimated Net Flows at the ETF Level
A total of 1,369 of the 2,608 ETFs (primary share classes = portfolios = ETFs) analyzed in this report showed net inflows of more than €10,000 each for July, accounting for inflows of €71.5 bn. This meant the other 1,239 instruments faced no flows, or net outflows, for the month. Upon closer inspection, only 159 of the 1,369 ETFs posting net inflows enjoyed inflows of more than €100 m over the course of July—for a total of €49.0 bn. The best-selling ETF for July was again Vanguard FTSE All-World UCITS ETF, which enjoyed estimated net inflows of €3.3 bn. It was followed by iShares MSCI Japan UCITS ETF (+€1.6 bn) and UBS Core MSCI Emerging Markets UCITS ETF (+€1.5 bn).
Graph 9: The 10 Best-Selling ETFs, July 1 – July 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 €15.7 bn.
Given its size and the overall trend for net sales at the promoter level, it was surprising that only three of the 10 best-selling funds for July were issued by iShares. These iShares ETFs accounted for estimated net inflows of €3.7 bn.
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 LSEG.
