April Uncertainties See Investors Flock to Safety of Money Market Euro Funds
The trend to steeper yield curves in developed markets continued over April, as the short end benefited from easing in many areas, if not the US. Further out, the curve was pushed up by concerns over higher issuance and tariffs. Reflecting predicted effects of tariffs, the IMF revised down its 2025 global growth forecast from January’s 3.3% to 2.8% in April, as US Q1 GDP growth reported in the red. This was attributed to an increase in imports as businesses front-ran tariffs. More positively, German GDP expanded in Q1 after a negative final quarter of 2025, helping boost eurozone GDP.
While it was a volatile month, the S&P 500 was broadly back to where it started before the tariff announcements. Over the month, the FTSE 250, Asia Pacific, eurozone, and Japan indices outperformed FTSE All-World, while Emerging, Russell 1000, FTSE 100, and Russell 2000 lagged, according to FTSE Russell research. Utilities led industry returns, followed by Real Estate and Consumer Staples.
On the commodity front, energy lagged the most as oil posted steep losses. Over one year, gold remained the best-performing asset class by far, while oil posted steep losses amid lower growth expectations.
In such an environment, Europe’s investors running for the safety of cash is perhaps of little surprise (p5). What we have not seen thus far is an abandonment of US large cap equities, though their peers lower down the cap scale have been less fortunate. The main alternative is still Equity Europe, though the UK still remains something of a pariah market, despite a resilient year so far, and attractive valuations relative to peers and its own history.
Asset Type Flows
Asset Type Flows April 2025
Graph 1: Estimated Net Flows by Asset and Product Type – April 2025 (€bn)
Source: LSEG Lipper
Total flows to mutual funds for April were €57.9bn—up almost ten-fold on the previous month, but still less than February’s net €76.91bn. This breaks down to: mutual fund flows (€40.15bn) and ETFs (€17.74bn).
However, it was very much a month where cash was king, with MMFs (+€54.91bn) the best-selling asset type, followed by equity (+€15.00bn) and mixed-assets funds (+€8.4bn), then real estate funds (+€1.14bn), commodities (+€0.55bn), and alternatives (+€0.13bn).
Despite steepening yield curves making fixed income more attractive relative to cash, bond funds sold off heavily
(-€23.16m) in a reversal of March’s gains, with “other” funds seeing marginal outflows (-€0.07bn).
Asset Type Flows Year to Date
Graph 2: Estimated Net Sales by Asset and Product Type, January 1 – April 30, 2025 (€bn)
Source: LSEG Lipper
Estimated overall net flows in the European fund industry were €187.61bn for the first four months of the year, breaking down to €143.37bn for mutual funds and €104.96bn for ETFs.
MMFs funds are the largest beneficiaries of these inflows to date (+€101.78bn, with +€93.37bn of this into mutual funds), switching place with Q1’s leaders, bonds, now third placed (+€43.29bn, with +€35bn of this into mutual funds).
Equities were the second-most popular asset type YTD, as they were the previous month (+€84.41bn, with flows dominated by the +€86.11bn to ETFs). Next were mixed assets (+€17.22bn with mutual funds accounting for +€16.84bn of this).
Considerably behind come commodity (+€2.12bn), and alternatives funds (+€1.6bn), with outflows from “other” funds
(-€0.58bn) and real estate (-€1.53bn).
Fund Flows Active vs Passive Products
Graph 3: Estimated Net Flows by Management Approach and Product Type, April 2025 (LHS); January 1 – April 30, 2025 (RHS). €bn
Source: LSEG Lipper
ETFs saw inflows of €17.74bn with mutual fund index trackers attracting €3.97bn and active funds €36.19bn, reflecting the strong month for MMFs, which are dominated by active mutual funds.
ETFs still lag active mutual funds, as can be seen from graph 3, above. However, that picture changes markedly when MMFs are stripped out. YTD, flows to long-term assets in ETFs were €96.54bn with the bulk of this going to equity ETFs, while mutual funds’ share of long-term asset flows was €50bn, including both trackers and actively managed funds, down from Q1’s net of €60.15bn.
Fund Flows by Lipper Global Classifications
Fund Flows by Lipper Global Classifications, April 2025
Graph 4: Ten Best- and Worst Lipper Global Classifications by Estimated Net Sales, April 2025 (€bn)
Source: LSEG Lipper
March’s surge of enthusiasm for Equity Europe funds seems to have abated somewhat, with them relegated from first to sixth place in April (+€3.09bn, with +€2.28bn of this to ETFs). Instead, Money Market EUR storms way ahead (+€39.14bn), followed by Equity Global (+€11.7bn, with +€5.06bn to ETFs).
Money Market USD reversed the outflows of the previous month, netting €9.4bn. The dollar slightly reversed its decline relative to the euro in April, so perhaps this, combined with the higher rates available, were enough to tempt investors back in, though concerns as to its security as a safe haven currency persist. And, despite the volatile month for US assets, Equity US still benefitted from flows of €3.07bn, with ETFs taking just €0.31bn of this.
At the other end of the table, Equity US Small & Mid Cap did not fare so well, with redemptions of €2.84bn (ETFs:
-€1.94bn). Investors’ disquiet over US equities seems mainly to be expressed lower down the cap scale so far this year.
Bond Emerging Markets Global HC (-€3.19bn) fared worst. While this may be amplified by dollar strengthening, their LC peers also suffered outflows.
The bond sell-off has particularly hit high yield, with Bond Global High Yield USD (-€2.57bn), Bond USD High Yield
(-€1.52bn), and Bond EUR High Yield (-€1.39bn) suffering, though as can be seen from graph 5, the bond sell-off has been broad, albeit with short-dated and to a lesser extent government funds fairing quite well.
Lastly, the heavy outflows from Money Market TRY (Turkish lira) in Q1 have slowed suggesting that this trade has nearly unwound.
Fund Flows by Lipper Global Classifications, Year to Date
Graph 5: Ten Best- and Worst Lipper Global Classifications by Estimated Net Sales, January 1 – April 30, 2025 (€bn)
Source: LSEG Lipper
April’s strong flows push Money Market EUR (+€60.94bn) up the YTD rankings, followed by Equity Global (+€43bn, +€24.92bn to ETFs) and Money Market USD (+€31.72bn). Equity Europe (+€18.47bn) still marginally leads Equity US (+€8.21bn), as it does on the monthly figures.
As mentioned above, Money Market TRY redemptions (-€15.52bn) are slowing. Despite a relatively strong year so far, UK equities remain stubbornly in the red: Equity UK (-€7.52bn), Equity UK Small & Mid Cap (-€2.75bn). Managers of these assets are turning themselves blue making their case, but clearly the market has yet to get on board.
Fund Flows by Promoters
Fund Flows by Promoters, April 2025
Graph 6: Ten Best-Selling Fund Promoters in Europe, April 2025 (€bn)
Source: LSEG Lipper
BlackRock takes the lead in April (+€15.01bn, with +€6.07bn to ETFs), followed by Belgian promoter KBC (-€11.65bn, all to mutual funds). The former’s flows to mutual funds are relatively larger than we have seen recently.
Vanguard (+€6.56bn, with +€4.05bn to ETFs) and Axa IM (+€5.41bn) also enjoyed a strong April, in a table that sees much movement from the previous month—unsurprising, given the large geopolitical shifts over so short a period.
Fund Flows by Promoters, Year to Date
Graph 7: Ten Best-Selling Fund Promoters in Europe, January 1 – April 30, 2025 (€bn)
Source: LSEG Lipper
Despite the shuffling of the pack over the month, the YTD rankings of the top five remain unchanged: BlackRock (+€44.2bn); JPMorgan (+€22.58bn); DWS (+€18.49bn); Vanguard (+€18.43bn); and HSBC (+€15.6bn).
KBC is the only unfamiliar entry off the back of strong flows in April.
