July 2025 was another month with strong 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 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. Nevertheless, the key trade partners for the U.S., including China, might be able to negotiate a trading agreement with lower than announced tariffs.
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. Therefore, it is not surprising that investors are listening very carefully to the statements on the future growth and income perspectives made by companies during the earnings season and react accordingly if necessary.
Additionally, the 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. That said, the swings in the price for oil during this conflict were so far more stable than investors have expected. This was because no oil production sites were hit by military actions in the region and the shipping route through the Strait of Hormuz stayed open.
Meanwhile, central banks around the globe try to adjust their policies to the current environment. While the European Central Bank (ECB) has further cut interest rates, the Bank of Japan (BoJ) did not change its interest rates. The same is true for the U.S. Federal Reserve, which was expected to leave its interest rates unchanged despite some pressure to lower rates from the government. 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 on a rather normal level in July, which might be another sign that investors are in risk-on mode.
More generally speaking, aside from the geopolitical 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. In addition, it looks like some major economies, such as Germany, may return to economic growth fostered by 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 €2,198.9 bn as of June 30, 2025, to €2,285.0 bn at the end of July). At a closer look, the increase in assets under management of €86.1 bn for July was driven by the performance of the underlying markets (+€58.9 bn), while the estimated net inflows added (+€27.2 bn) to the increase in 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 (€1,733.3 bn) held the majority of assets, followed by bond ETFs (€427.1 bn), money market ETFs (€67.6 bn), commodities ETFs (€43.5 bn), alternatives ETFs (€9.2 bn), and mixed-assets ETFs (€4.3 bn).
Given the current market environment, it is no surprise that the overall assets under management in the European ETF industry (€2,285.0 bn) hit a new all-time high at the end of the month. With regard to this, it is noteworthy that the assets under management for all asset types with the exception of commodities reached a new all-time high.
Graph 1: Market Share, Assets Under Management in the European ETF Segment by Asset Type, July 31, 2025
Source: LSEG Lipper
ETF Flows by Asset Type
Within the current market conditions, the European ETF industry enjoyed healthy estimated net inflows (+€27.2 bn) over the course of July. That said, these inflows were above the rolling 12-month average (€25.9 bn). These inflows drove the overall inflows in ETFs up to €179.7 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 €300.0 bn and €320.0 bn.
The inflows in the European ETF industry for July were once again driven by equity ETFs (+€22.0 bn), followed by bond ETFs (+€3.4 bn), money market ETFs (+€1.0 bn), alternatives ETFs (+€0.4 bn), commodities ETFs (+€0.3 bn), and mixed-assets ETFs (+€0.04 bn).
Graph 2: Estimated Net Sales by Asset Type, July 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 July 2025. This investor behavior repeats a trend we have seen in the past where ETFs enjoyed high inflows during times of unstable market conditions.
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 2025, the European ETF market was split into 178 different peer groups. The highest assets under management at the end of July were held by funds classified as Equity U.S. (€563.6 bn), followed by Equity Global (€420.0 bn), Equity Europe (€109.9 bn), Equity Emerging Markets Global (€102.4 bn), and Equity Eurozone (€81.7 bn). These five peer groups accounted for 55.91% of the overall assets under management in the European ETF segment, while the 10-top classifications by assets under management accounted for 65.74%.
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 €1,714.5 bn, or 75.03%, of the overall assets under management.
Graph 3: Ten Largest Lipper Global Classifications by Assets Under Management, July 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, July 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 €20.8 bn. In line with the overall sales trend for July, equity peer groups (+€18.9 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 was 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 (+€6.0 bn) was the best-selling Lipper global classification for July. It was followed by Equity U.S. (+€3.5 bn) and Equity Emerging Markets Global (+€2.7 bn).
Generally speaking, it is not surprising that Equity U.S. is back among the top spots on the table of the 10 best-selling Lipper classifications given its status as core market and the strong recovery of the market after the turmoil in April 2025. That said, Equity Europe and Equity Eurozone were not on this table until the end of 2024. That said, the tide has changed ever since as there has been a trend toward investing in European equities established over the course of the first half of 2025.
The flows into money market products in the European ETF industry have further normalized over the course of July. Given the weakening U.S. dollar, it is somewhat surprising to see Money Market USD (+€0.8 bn) on the list of the top selling Lipper classifications. That said, one needs to bear in mind that money market products are in general not a core asset type within the European ETF industry.
Graph 5: Ten Best- and Worst-Lipper Global Classifications by Estimated Net Sales, July 2025 (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 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 peer groups with the highest estimated net outflows for July accounted for €3.8 bn in outflows. These outflows were above the outflows for the 10 peer groups with the highest outflows for June 2025 (-€3.3 bn).
Bond EMU Government (-€1.4 bn) was the classification with the highest outflows for the month. It was bettered by Equity Japan (-€0.5 bn), Bond USD Government (-€0.4 bn), Equity Switzerland (-€0.4 bn), and Bond Global USD (-€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 29 of the 61 ETF promoters in Europe holding assets at or above €1.0 bn. The largest ETF promoter in Europe—iShares (€974.1 bn)—accounted for 42.63% of the overall assets under management, far ahead of the number-two promoter—Amundi ETF (€290.7 bn)—and the number-three promoter—Xtrackers (€244.6 bn). (To earn 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, 2025 (Euro Billions)
Source: LSEG Lipper
The 10-top promoters accounted for 93.56% of the overall assets under management in the European ETF industry. This meant, in turn, the other 51 fund promoters registering at least one ETF for sale in Europe accounted for only 6.44% 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 all 10 of the 10 largest promoters by assets under management were among the 10-top selling ETF promoters for July. iShares was the best-selling ETF promoter in Europe for July (+€9.9 bn), ahead of Xtrackers (+€3.1 bn) and Amundi ETF (+€2.6 bn).
Graph 7: Ten Best-Selling ETF Promoters, July 2025 (Euro Billions)
Source: LSEG Lipper
The flows of the 10-top promoters accounted for estimated net inflows of €24.0 bn. As for the overall flow trend in July, it was clear that some of the 61 promoters (seven) faced estimated net outflows (-€0.1 bn in total) over the course of the month.
Assets Under Management by ETFs
There were 4,364 instruments (primary share classes [2,166] and [convenience] share classes [2,198]) 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 442 of the 2,166 ETFs (primary share classes = portfolios) held assets above €1.0 bn each. These ETFs accounted for €1,914.4 bn, or 83.78%, of the overall assets in the European ETF industry. The 10 largest ETFs in Europe accounted for €461.7 bn, or 20.20%, of the overall assets under management.
Graph 8: The 10 Largest ETFs by Assets Under Management, July 31, 2025 (Euro Billions)
Source: LSEG Lipper
Estimated Net Flows at ETF Level
A total of 1,134 of the 2,166 ETFs (primary share classes = portfolios) analyzed in this report showed net inflows of more than €10,000 each for July, accounting for inflows of €46.9 bn. This meant the other 1,032 instruments faced no flows, or net outflows, for the month. Upon closer inspection, only 118 of the 1,134 ETFs posting net inflows enjoyed inflows of more than €100 m during July—for a total of €30.2 bn. The best-selling ETF for July was iShares Core MSCI World UCITS ETF, which enjoyed estimated net inflows of €1.8 bn. It was followed by iShares MSCI World ex USA UCITS ETF (+€1.4 bn) and Amundi S&P 500 II UCITS ETF (+€1.1 bn).
Graph 9: The 10 Best-Selling ETFs, July 2025 (Euro Billions)
Source: LSEG Lipper
The flow pattern at the fund level indicated there was a lot of turnover and rotation during July, 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 €9.0 bn.
Given its size and the overall trend for net sales at the promoter level, it was not surprising that five of the 10 best-selling funds for July were promoted by iShares. These iShares ETFs accounted for estimated net inflows of €5.1 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.
