May 2025 was another month with healthy inflows for the global 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 also impacted 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 are trying 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. Federal Reserve 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—this 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. When it comes 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 $14,557.9 bn as of April 30, 2025, to $15,328.2 bn at the end of May). At a closer look, the increase in assets under management of $770.3 bn for May was driven by the performance of the underlying markets added (+$652.7 bn), while estimated net inflows (+$117.6 bn) added to the assets under management.
Assets Under Management by Asset Type
As for the overall structure of the global ETF industry, it was not surprising equity ETFs ($11,931.9 bn) held the majority of assets, followed by bond ETFs ($2,686.7 bn), commodities ETFs ($283.2 bn), alternatives ETFs ($229.5 bn), money market ETFs ($117.2 bn), mixed-assets ETFs ($60.1 bn), and “other” ETFs ($19.5 bn).
Despite the current market environment, it is not surprising that the assets under management for alternatives, bond, equity, mixed-assets, and money market ETFs marked an all-time high at the end of the month. This is because the main markets recovered from their drawdowns in April.
Graph 1: Market Share, Assets Under Management in the Global ETF Industry by Asset Type, May 31, 2025
Source: LSEG Lipper
ETF Flows by Asset Type
The global ETF industry enjoyed healthy estimated net inflows (+$117.6 bn) over the course of May despite the fragile environment in the equity markets. These inflows drove the overall inflows in ETFs up to $686.9 bn for the year 2025 so far.
The inflows in the global ETF industry for May were driven by equity ETFs (+$54.5 bn), followed by bond ETFs (+$52.3 bn), alternatives ETFs (+$9.3 bn), money market ETFs (+$2.5 bn), and mixed-assets ETFs (+$1.0 bn), while “other” ETFs (-$0.1 bn), and commodities ETFs (-$1.8 bn) faced outflows.
Graph 2: Estimated Net Sales by Asset Type, May 2025 (USD Billions)
Source: LSEG Lipper
Assets Under Management by Lipper Global Classifications
In order to examine the global ETF industry in further detail, a review of the Lipper global classifications will lead to more insights on the structure and concentration of assets within the global ETF industry. At the end of May 2025, the global ETF market was split into 285 different peer groups. The highest assets under management at the end of May were held by funds classified as Equity U.S. ($5,414.0 bn), followed by Equity Global ex U.S. ($903.0 bn), Equity U.S. Small & Mid Cap ($863.0 bn), Equity Japan ($659.6 bn), and Equity Global ($637.8 bn). These five peer groups accounted for 55.31% of the overall assets under management in the global ETF industry, while the 10-top classifications by assets under management accounted for 68.53%.
Overall, 16 of the 285 peer groups each accounted for more than 1% of assets under management. In total, these 16 peer groups accounted for $11,813.8 bn, or 77.07%, of the overall assets under management.
Graph 3: Ten Largest Lipper Global Classifications by Assets Under Management, May 31, 2025 (USD Billions)
Source: LSEG Lipper
The peer groups on the other side of the table showed some funds in the global 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.
Graph 4: Ten Smallest Lipper Global Classifications by Assets Under Management, May 31, 2025 (USD Billions)
Source: LSEG Lipper
ETF Flows by Lipper Global Classifications
The net inflows of the 10 best-selling Lipper classifications accounted for $87.7 bn. In line with the overall sales trend for May, equity peer groups (+$76.4 bn) gathered the majority of flows by asset type on the table of the 10 best-selling classifications by estimated net inflows for May 2025. That said, compared with the concentration of flows for the single regions, the 10 best-selling Lipper classifications are more diversified on the global level. Given the overall fund flow trend in the global ETF industry and the dominance of the U.S. as leading market for ETFs, it was not surprising that Equity U.S. (+$21.0 bn) was the best-selling Lipper global classification for May. It was followed by Equity Global ex U.S. (+$11.7 bn) and Equity Global (+$10.4 bn).
Since money market is in general not considered a core asset type within the global ETF industry, it is not surprising that there were no money market products on the table for the best-selling classifications for the global ETF industry.
More generally, these numbers showed the global ETF segment is also somewhat highly concentrated when it comes to the estimated net 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. In addition, one needs to bear in mind, that the numbers for the global ETF industry are massively impacted by the fund flow trends in the U.S.
Graph 5: Ten Best- and Worst-Lipper Global Classifications by Estimated Net Sales, May 2025 (USD 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 $31.3 bn in outflows. These outflows were below than the outflows for the previous month (-$42.8 bn).
Alternative Equity Leveraged (-$11.2 bn) was the classification with the highest outflows for the month. It was bettered by Equity Japan (-$8.3 bn), Bond USD Government Short Term (-$3.7 bn), Equity Sector Financials (-$2.5 bn), and Equity Sector Materials (-$1.2 bn).
Assets Under Management by Promoters
A closer look at assets under management by promoters in the global ETF industry also showed high concentration, with only 183 of the 686 ETF promoters in the global ETF industry holding assets at or above $1.0 bn. The largest ETF promoter in the global ETF industry—iShares ($4,602.5 bn)—accounted for 30.03% of the overall assets under management, ahead of the number-two promoter—Vanguard ($3,509.4 bn)—and the number-three promoter—SPDR ($1,655.9 bn).
Graph 6: The 10 Largest ETF Promoters by Assets Under Management, May 31, 2025 (USD Billions)
Source: LSEG Lipper
The 10-top promoters accounted for 80.31% of the overall assets under management in the global ETF industry. This meant, in turn, the other 676 fund promoters registering at least one ETF for sale accounted for only 19.69% of the overall assets under management. These numbers show that the assets under management at the promoter level in the global ETF industry are somewhat more diversified than in the single regions. This is not surprising as some promoters are only active in single regions/markets and do therefore take away some market share from the global promoters.
ETF Flows by Promoters
Since the global ETF industry is highly concentrated with regard to the assets under management by promoter, it was somewhat surprising that only five 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 the global ETF industry for May (+$37.3 bn), ahead of Vanguard (+$27.3 bn) and Invesco (+$14.1 bn).
Graph 7: Ten Best-Selling ETF Promoters, May 2025 (USD Billions)
Source: LSEG Lipper
The flows of the 10-top promoters accounted for estimated net inflows of $102.1 bn. As for the overall flow trend in May, it was clear that some of the 686 promoters (179) faced estimated net outflows (-$25.5 bn in total) over the course of the month.
Assets Under Management by Region
ETFs domiciled in North America ($11,510.4 bn) held the highest assets under management in the global ETF industry at the end of May 2025. They were followed by ETFs domiciled in Europe ($2,463.6 bn), ETFs domiciled in the Asia Pacific region ($1,322.2 bn), ETFs domiciled in South and Central America ($18.8 bn), ETFs domiciled in Africa ($12.0 bn), while other domiciles held ($1.2 bn) in assets under management.
Graph 8: Assets Under Management in the Global ETF Industry by Region – May 31, 2025 (in bn USD)
Source: LSEG Lipper
These numbers showcase that the global ETF industry is a truly global industry with a high concentration of the assets under management in a few domiciles.
Estimated Net Flows by Region
By reviewing the estimated flows in the global ETF industry by fund domicile and the respective regions, one needs to bear in mind that some domiciles have specific advantages or disadvantages when it comes to ETF distribution. The U.S. is, for example, a single market and can take profit from the size of the overall market, while in Europe every market is or at least can be an ETF domicile, which means that the local markets are much smaller.
That said, the EU countries have established a fund regulation (Undertakings in Collective Investments and Transferable Securities, or UCITS) which enables the fund and ETF industry to cross-list all products which are registered for sale in one EU country into another EU country. Since UCITS has become such a well-recognized regulatory standard for mutual funds and ETFs, some countries in South and Central America, as well as in Asia, allow UCITS funds to be cross-listed and sold to local investors. It is fair to say that there is no other regulatory framework available that allows funds to be distributed in various countries around the globe. Other mutual recognition agreements, such as those between Hong Kong and China or Hong Kong and Taiwan, are only bilateral and have no global reach. This means that the estimated flows for European ETFs in January also include flows from South and Central America, as well as from Asia.
Graph 9: Estimated Net Flows in the Global ETF Industry by Region, May 2025 (in bn USD)
Source: LSEG Lipper
As one may expect from the assets under management, ETFs domiciled in North America (+$88.6 bn) enjoyed the highest estimated net inflows for May 2025. They were followed by ETFs domiciled in Europe (+$31.1 bn), South and Central America (+$0.4 bn), and Africa (+$0.04 bn). Conversely, ETFs domiciled in the Asia Pacific region (-$2.5 bn) faced outflows. In addition, ETFs domiciled in other regions also enjoyed estimated net outflows (-$0.01 bn).
Assets Under Management by Domicile
To investigate the concentration by region further, it makes sense to analyze the assets under management by domicile. As of the end of May 2025, the U.S. was the largest single country ETF domicile ($11,055.4 bn) of the 42 ETF domiciles covered in this report, followed by Ireland ($1,784.4 bn), Japan ($627.7 bn), Canada ($455.1 bn), and Luxembourg ($452.3 bn). These five ETF domiciles account for assets under management of $14,374.8 bn, or 93.78%, of the overall assets under management in the global ETF industry.
Graph 10: Ten Largest ETF Domiciles by Assets Under Management – May 31, 2025 (in bn USD)
Source: LSEG Lipper
These numbers show that the assets under management in the global ETF industry are dominated by a small number of domiciles. Obviously, this concentration is caused by the time period over which ETFs are available in the single domiciles, as well the overall market size of these domiciles. That said, Ireland and Luxembourg are true global ETF hubs since ETFs registered under the UCITS regulation can be sold in various markets around the world.
Estimated Net Flows by Domicile
In more detail, the U.S. (+$80.9 bn) was the single fund domicile with the highest estimated net inflows for May. It was followed by Ireland (+$24.6 bn), Canada (+$7.7 bn), Luxembourg (+$5.4 bn), and Taiwan (+$2.7 bn).
Graph 11: The 10 ETF Domiciles with the Highest Estimated Net Inflows, May 2025 (in bn USD)
Source: LSEG Lipper
The list of the 10 best-selling domiciles does an even better job of showcasing that ETFs are truly a global phenomenon since it shows that investors around the globe are using ETFs to implement their asset allocation views into their portfolios.
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.
