May 2025 was another month with healthy inflows for the European ETF industry.
These inflows occurred in a volatile but overall positive market environment in which investors around the globe acted nervous over any political and economic news. Investor sentiment was still further impacted by the announcements around the new tariff regime by the U.S. president and potential tit-for-tat reactions from the markets which are the targets of the new tariffs. That said, the tariffs are seen as a kind of trade war between the U.S. and the rest of the world, especially China, by some market observers.
When it comes to this, investors were concerned about the impact of any new tariffs on the growth expectations of literally all economies around the globe. In addition to this, investors were also concerned about the impact of new tariffs on the profitability of all kinds of companies, as well as on the impact of tariffs on inflation around the globe.
Additionally, the increasing tensions in the Middle East did also impact investor sentiment, since a possible conflict between Israel and Iran has the potential to become a broader conflict in the region and may drive up the price for oil.
Meanwhile, central banks around the globe try to adjust their policies to the current environment. While the European Central Bank (ECB) is expected to further cut interest rates, the Bank of Japan (BoJ) may have to raise interest rates to fight inflation in Japan. Conversely, it is expected that the U.S. Fed will leave its interest rates unchanged for a longer period of time. These decisions reflect central banks’ efforts to navigate economic challenges, including trade tensions, inflationary trends, and the high market volatility, to support their local economies.
Nevertheless, fears of increasing debt in the U.S. and other major economies—which may lead to increasing interest rates—might be the reason why investors are not strong buyers of bond ETFs despite a possible need for safe haven investments. That said, the inflows into money market ETFs were down in May, which might be another sign that investors are rather in risk-on mode.
More generally speaking, aside from the (geo-)political tensions, there is only a very limited number of indicators which are sending negative signals for economic growth in the U.S. and other major economies around the world. With regard to this, it is noteworthy that most of these negative indicators are being offset by positive signals from other indicators. Nevertheless, some major economies, such as Germany, lack economic growth and may need lower interest rates and/or increased government spending as stimulus. Despite these headwinds, the positive effects of lower interest rates seem to be more important for investors than the current state of some economies.
From an ETF industry perspective, the performance of the underlying markets led, in combination with the estimated net flows, to increasing assets under management (from €2,054.5 bn as of April 30, 2025, to €2,170.1 bn at the end of May). At a closer look, the increase in assets under management of €115.7 bn for May was driven by the performance of the underlying markets, which contributed (+€88.6 bn), while estimated net inflows added (+€27.0 bn) to the assets under management.
Assets Under Management by Asset Type
As for the overall structure of the European ETF industry, it was not surprising equity ETFs (€1,634.3 bn) held the majority of assets, followed by bond ETFs (€417.4 bn), money market ETFs (€64.5 bn), commodities ETFs (€41.8 bn), alternatives ETFs (€8.2 bn), and mixed-assets ETFs (€4.1 bn).
Given the current market environment, it is no surprise that the overall assets under management in the European ETF industry (€2,170.1 bn) were no longer going from one all-time high to the next month after month.
Graph 1: Market Share, Assets Under Management in the European ETF Segment by Asset Type, May 31, 2025
Source: LSEG Lipper
ETF Flows by Asset Type
Despite the current market conditions, the European ETF industry enjoyed strong estimated net inflows (+€27.0 bn) over the course of May. These inflows were above the rolling 12-month average (€25.3 bn). These inflows drove the overall inflows in ETFs up to €132.0 bn for the year 2025 so far.
If European ETFs can maintain their current level of inflows, the overall inflows for the year 2025 will reach a new all-time high, with estimated net inflows between €310.0 bn and €325.0 bn.
The inflows in the European ETF industry for May were once again driven by equity ETFs (+€19.0 bn), followed by bond ETFs (+€7.3 bn), money market ETFs (+€0.7 bn), alternatives ETFs (+€0.2 bn), and mixed assets ETFs (+€0.1 bn). On the other side of the table, commodities ETFs (-€0.2 bn) were the only asset type facing outflows.
Graph 2: Estimated Net Sales by Asset Type, May 2025 (Euro Billions)
Source: LSEG Lipper
Given the current market environment, it was no surprise to see high inflows into ETFs led by equity products over the course of May 2025. This investor behavior repeats a trend we have seen in the past where ETFs enjoyed high inflows during times of market turmoil while mutual funds faced significant outflows.
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 2025, the European ETF market was split into 178 different peer groups. The highest assets under management at the end of May were held by funds classified as Equity U.S. (€526.0 bn), followed by Equity Global (€393.1 bn), Equity Europe (€109.0 bn), Equity Emerging Markets Global (€92.3 bn), and Equity Eurozone (€53.0 bn). These five peer groups accounted for 55.35% of the overall assets under management in the European ETF segment, while the 10-top classifications by assets under management accounted for 65.21%.
Overall, 17 of the 178 peer groups each accounted for more than 1% of assets under management. In total, these 17 peer groups accounted for €1,628.3 bn, or 75.03%, of the overall assets under management.
Graph 3: Ten Largest Lipper Global Classifications by Assets Under Management, May 31, 2025 (Euro Billions)
Source: LSEG Lipper
In addition, it was noteworthy that 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.
That said, the ranking changes at the top of the league table which happened during the COVID-19 pandemic have started to reverse. Nevertheless, these numbers showed assets under management by Lipper global classifications continued to be highly concentrated in the European ETF industry.
The peer groups 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: “Is there a consolidation ahead in the European ETF industry?” for more details on this topic).
Graph 4: Ten Smallest Lipper Global Classifications by Assets Under Management, May 31, 2025 (Euro Billions)
Source: LSEG Lipper
ETF Flows by Lipper Global Classifications
The net inflows of the 10 best-selling Lipper classifications accounted for €22.8 bn. In line with the overall sales trend for May, equity peer groups (+€17.8 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 somewhat surprising that there were only two bond classifications 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 (+€6.9 bn) was the best-selling Lipper global classification for May. It was followed by Equity U.S. (+€3.4 bn) and Equity Europe (+€2.8 bn). With Equity Global and Equity U.S. taking the top two spots on the table of the 10 best-selling Lipper classifications it looks like the flow pattern for the month has returned to the long-term trend for the estimated fund flows by Lipper classifications. That said, seeing Europe and Equity Eurozone on this table too, might be the new normal for the estimated net flows by Lipper classifications.
The flows into money market products in the European ETF industry have further normalized over the course of May and is therefore somewhat surprising to see Money Market USD (+€1.0 bn) on the list of the top selling Lipper classifications. By looking at these numbers, one needs to bear in mind that money market products are in general not a core asset type within the European ETF industry.
More generally, these numbers showed the European ETF segment is also highly concentrated when it comes to fund flows by 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.
Graph 5: Ten Best- and Worst-Lipper Global Classifications by Estimated Net Sales, May 2025 (Euro Billions)
Source: LSEG Lipper
On the other side of the table, the 10 peer groups with the highest estimated net outflows for May accounted for €4.5 bn in outflows. These outflows were lower than the outflows for the 10 peer groups with the highest outflows for April 2025 (-€4.9 bn).
Bond USD Government (-€0.9 bn) was the classification with the highest outflows for the month. It was bettered by Equity UK (-€0.6 bn), Bond Global Corporates USD (-€0.6 bn), Equity U.S. Small & Mid Cap (-€0.6 bn), and Equity Germany (-€0.4 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 29 of the 64 ETF promoters in Europe holding assets at or above €1.0 bn. The largest ETF promoter in Europe—iShares (€930.9 bn)—accounted for 42.90% of the overall assets under management, far ahead of the number-two promoter—Amundi ETF (€277.8 bn)—and the number-three promoter—Xtrackers (€234.3 bn). (To earn more about the concentration of the European ETF market at the promoter level, please read our report: Spotlight on the concentration at the promoter level in the European ETF industry).
Graph 6: The 10 Largest ETF Promoters by Assets Under Management, May 31, 2025 (Euro Billions)
Source: LSEG Lipper
The 10-top promoters accounted for 93.59% of the overall assets under management in the European ETF industry. This meant, in turn, the other 54 fund promoters registering at least one ETF for sale in Europe accounted for only 6.41% of the overall assets under management.
ETF Flows by Promoters
Since the European ETF market is highly concentrated with regard to the 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 May. iShares was the best-selling ETF promoter in Europe for May (+€10.3 bn), ahead of Vanguard (+€3.2 bn) and Amundi ETF (+€2.3 bn).
Graph 7: Ten Best-Selling ETF Promoters, May 2025 (Euro Billions)
Source: LSEG Lipper
The flows of the 10-top promoters accounted for estimated net inflows of €24.1 bn. As for the overall flow trend in May, it was clear that some of the 64 promoters (eight) faced estimated net outflows (-€0.6 bn in total) over the course of the month.
Assets Under Management by ETFs
There were 4,229 instruments (primary share classes [2,120] and [convenience] share classes [2,109]) 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 434 of the 2,120 ETFs (primary share classes = portfolios) held assets above €1.0 bn each. These ETFs accounted for €1,812.1 bn, or 83.50%, of the overall assets in the European ETF industry. The 10 largest ETFs in Europe accounted for €428.9 bn, or 19.76%, of the overall assets under management.
Graph 8: The 10 Largest ETFs by Assets Under Management, May 31, 2025 (Euro Billions)
Source: LSEG Lipper
Estimated Net Flows on ETF Level
A total of 1,110 of the 2,120 ETFs (primary share classes = portfolios) analyzed in this report showed net inflows of more than €10,000 each for May, accounting for inflows of €48.6 bn. This meant the other 1,010 instruments faced no flows, or net outflows, for the month. Upon closer inspection, only 106 of the 1,110 ETFs posting net inflows enjoyed inflows of more than €100 m during May—for a total of €30.3 bn. The best-selling ETF for May was iShares Broad Global Government Bond UCITS ETF, which enjoyed estimated net inflows of €1.7 bn. It was followed by iShares Core € Corporate Bond UCITS ETF (+€1.4 bn) and UBS MSCI ACWI SF UCITS ETF (+€1.4 bn).
Graph 9: The 10 Best-Selling ETFs, May 2025 (Euro Billions)
Source: LSEG Lipper
The flow pattern at the fund level indicated there was a lot of turnover and rotation during May, 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 €9.5 bn.
Given its size and the overall trend for net sales at the promoter level, it was surprising that only four of the 10 best-selling funds for May were promoted by iShares. These iShares ETFs accounted for estimated net inflows of €4.4 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 Lipper or LSEG.
