Aggregate flows Total net flows for the year were €704.72bn (+€371bn mutual funds/+€333.31bn ETF).
Asset class Bonds were the most popular asset class (+€284.06bn: +€221.36bn MF/+€62.69bn ETF). Equities took second place (+€175.72bn: -€73.93bn MF/+€249.65bn ETF).
Money Market USD is top over the year (+€92.83bn) ahead of tits EUR equivalent, likely driven by the more attractive yield on the dollar, with Equity Global funds taking second place (+€63.4bn).
Equity UK continues to suffer the greatest redemptions, despite the strong performance of the FTSE 100 (-€20.35bn).
Last year was the first post‑pandemic year in which all major asset classes generated positive returns, driven by risk‑on sentiment despite numerous macro and geopolitical uncertainties and outright upsets. In line with this, most asset classes in Europe have enjoyed positive flows—primarily, bonds and equities—although real estate continues its negative run.
Global economies in 2025 were shaped by tariffs, geopolitical tensions, and shifting central bank policy. In April, the US imposed tariff rates not seen since the 1930s, triggering a drop in major equity markets early in the month before ongoing horse-trading restored confidence, and market pundits became obsessed with a crispy Mexican snack. That said, while European investors made their heaviest allocations to MMFs that month, and bond funds saw their highest monthly redemptions, equity fund flows, while subdued, were positive.
Markets recovered late in the month, and despite ongoing concerns, continued to climb (more or less) over the year. As a result, Equity US is no longer the main game in town, as it was in 2024, and has been overtaken by Equity Global, Europe and Emerging Markets.
Inflation trended lower across major economies, enabling the European Central Bank (ECB) and other central banks to cut rates, while the Federal Reserve paused its easing cycle amid sticky core services inflation. Despite shocks, global GDP proved resilient, aided by fiscal stimulus in some regions.
Bond markets delivered positive returns, supported by easing inflation and expectations of rate cuts. Over the year, investors have favoured diversified high-cred quality global bond funds, along with short-term bonds, while tending to shun corporate credit, a trend likely informed by historically tight spreads. The flows to short-term bond funds have abated somewhat over the course of the year, as yield curves normalised, offering greater opportunities further out.
Throughout, however, this has been a year where investors have sort comfort in cash—predominantly of the USD and EUR variants.
Asset Class Overview
Chart 1: Asset Class AUM by Year, 2003-2025 (€bn)
Source: LSEG Lipper
Over the two-plus decades covered by chart 1, total net assets (TNA) held in European mutual funds and ETFs have risen from €3.43trn to €17.4trn, or a fivefold-plus increase. Over the long run, the mix has broadened and scaled dramatically. Equity grew from €1.1tn in 2003 to €7.7tn in 2025, the largest absolute expansion (+€6.6tn). Bonds rose from €0.83tn to €4.0tn (+€3.2tn), while Mixed Assets climbed from €0.37tn to €2.6tn (+€2.2tn). MMFs nearly tripled to €2.26tn, underscoring the structural role of liquidity vehicles. Alternatives expanded from a small base (€90bn to €434bn), though with pronounced cyclicality; Real Estate doubled to €225bn; Commodities, negligible in 2003, reached €95bn in 2025.
After the 2022 drawdown, risk assets have rebounded strongly:
- Equity: €6,489.9bn (2021) → €5,372.0bn (2022) → €7,722.6bn (2025). The 2023–2025 leg added about €2.35tn versus the 2022 trough, lifting equities to fresh highs by 2025.
- Bond: €3,463.6bn (2021) → €2,946.3bn (2022) → €4,027.0bn (2025). A robust recovery (+€1.08tn since 2022) suggests duration regained favour as rate expectations stabilised.
- MMF: €1,535.7bn (2021) → €1,601.1bn (2022) → €2,263.4bn (2025). Cash vehicles kept gathering assets, with a notable step-up in 2025 (+€500bn+ vs 2024), indicating persistently high cash balances alongside the risk rally.
- Mixed Assets: Dipped in 2022 to €2,365.5bn, then recovered to €2,605.2bn by 2025—healthier, but still below 2021’s €2,656.8bn peak, reflecting ongoing rotation into single-asset equity/bond sleeves.
- Alternatives: Fell from €664.0bn (2021) to €210.5bn (2024) before partially rebounding to €434.2bn (2025). The category remains well below its 2017–2019 levels, suggesting a multi‑year repositioning.
- Real Estate: Slid from €303.8bn (2021) to €188.8bn (2024), with a modest 2025 bounce to €225.3bn—still subdued.
- Commodities: Range‑bound through 2021–2024, then jumped to €2bn in 2025, hinting at renewed interest in real‑asset hedges.
2025 marks a new leadership pairing—equities at record highs and bonds restored—while cash remains elevated, after a strong period of inflows over 2023 to 2025. Multi‑asset, real estate, and alternatives have lagged their pre‑2021 standing, but 2025 shows tentative stabilisation (particularly in alts and commodities).
Chart 2: Asset Class AUM by Year, 2003-2025 (%)
Source: LSEG Lipper
There have inevitably been significant shifts in the fund asset mix over a period that has encompassed a global financial crisis and pandemic, to mention but two lowlights.
Chart 2 illustrates several clear structural trends. Equity has consistently dominated, typically accounting for 27%-45% of total assets. At only one point has it not been the largest asset class: 2008, as investors fled equity markets I free fall for the safety of cash. Its share expanded meaningfully from 2012, reflecting the strong post‑crisis equity cycle.
Between 2021 and 2025, average equity exposure was 43%. That contrasts with the pre-GFC period of 27.55%. Does this denote a rational shift in the asset mix, or point to investors’ irrational exuberance? Unfortunately, as I’ve argued here, market peaks and troughs are only visible in the rear-view mirror, and historically high equity exposures doesn’t mean this wouldn’t—or indeed shouldn’t—go higher.
Bond funds also saw a reduction around the time of the GFC, albeit of a less extreme nature. Their nadir was 2007 (18.26%), although exposure had been in decline for some years. They tracked along at about a quarter of total assets between 2012 and 2020, despite historically low rates and quantitative easing depressing yields. What’s interesting is that the post-covid increase in rates, catalysing the large fixed-income losses of 2022, doesn’t not seem to have had a significant impact on holdings.
MMFs showed a gradual long‑term reduction following the huge expansion in the teeth of the global financial crisis (19.79% to 29.34%). Levels stayed below those of the pre-GFC period from 2012, as investors were discouraged by the low yields available on cash. Their share increases noticeably through 2023–2025, signalling elevated cash holdings amid macro uncertainty and attractive short‑term yields. Nevertheless, and despite strong flows over the past year, MMF levels are still well below their pre-GFC levels.
Mixed Assets steadily rise from the mid‑2000s to the mid‑2010s, then plateau and have softened slightly over the past couple of years. This could be because MA funds with higher bond exposures were being used by investors as bond proxies, with other risk assets acting as a kicker to returns in a low-yield environment. That has unwound, as bond yields have increased. Alternatives and Real Estate remain small components throughout, with modest fluctuations but no structural expansion.
Chart 3: Asset Class AUM, 2025 (%)
Source: LSEG Lipper
Which leads us to a snapshot at the end of 2025, with equity funds holding the largest share of assets (44%), followed by bonds (23%), mixed assets (15%), and MMFs (13%).
Alternatives have a 3% share, and real estate, 1%.
Chart 4: Asset Class Flows by Year, 2004-2025 (€bn)
Source: LSEG Lipper
Since 2024, asset‑class flows show pronounced cyclicality, highlighting sharp divergences between risk‑on and risk‑off periods.
Equities experienced some of the largest multi‑year swings, moving from a strong +€212.39 bn in 2020 to an exceptional +€331.7bn in 2021, before reversing sharply to -€51.01 bn in 2022 and -€10.77bn in 2023, as central banks belatedly grappled with the new rate environment. While 2024 and 2025 partially recovered to +€136.29bn and +€175.72bn respectively, the pattern reflects heightened volatility and sensitivity to macro shocks.
Bond flows show an even more striking rebound pattern. After a steep decline to -€106.2bn in 2022—again, as rates spiked and principals plummeted—inflows surged to €157.65bn in 2023 as investors both took advantage of perceived attractive entry points and rebalanced their portfolios. Bond flows climbed further to €295.93bn in 2024 and €284.06bn in 2025. This sustained strength suggests a decisive shift toward fixed income in a higher‑yield environment.
MMFs exhibit one of the most dramatic recent shifts, rising from +€17.46bn in 2022 to a €172.61 bn in 2023, then peaking at €274.37bn in 2024 before moderating to €167.94 bn in 2025. This three‑year surge indicates persistent demand for liquidity during periods of uncertainty. In addition, higher base rates from 2022 has made cash attractive.
Alternatives remain volatile, with deep outflows of -€80.16 bn in 2020, followed by a brief recovery in 2021 (+€11.36 bn), then renewed declines in 2022 (-€39.33 bn) and 2023 (-€17.27 bn). The return to inflows in 2025 (+€28.48bn) may signal selective re‑risking.
Mixed assets also reverse sharply, from +€174.18 bn in 2021 to -€100.26 bn in 2023 and -€62.67 bn in 2024, before turning positive at €49.52 bn in 2025. To repeat the point made under chart 2, this may be because those funds with higher bond exposures were being used as bond proxies, with other risk assets acting as a kicker to returns in a low-yield environment: a trade that has unwound as bond yields increased.
Real Estate remains structurally weak in recent years, deteriorating from +€11.72bn in 2022 to -€14.67bn in 2024 and -€10bn in 2025, consistent with valuation pressures in a higher‑rate world.
Chart 5: Asset Class Flows by Month, 2025 (€bn)
Source: LSEG Lipper
It may be somewhat surprising, but risk assets weathered the slings and arrows of outrageous tariff threats rather well. While equity markets saw their largest drawdowns in April, the month’s flows to the asset class were up on the previous month (+€16.23bn) and rose again in May (+€27.49bn). Indeed, there have only been two negative months: July (-€20.84bn) and October (-€1.99bn), concentrated on Equity US flows, and likely a manifestation of fears over tech valuations. This encompasses UK flows, which have seen a much more skittish year (see chart 5 here). Continental Europe has the reputation of being more risk averse than the UK in investment terms—and still has a lower equity exposure—but that certainly hasn’t been the case this year.
Bonds saw redemptions in just one month—April (-€23.56bn), possibly as a response to the anticipated impact of tariffs on inflation—although May saw their best month of the year as the immediate threat receded (+€37.74bn).
MMFs’ best month was, rather unsurprisingly, April (+€54.69bn). Their worst month proved to be December, as investors exited both EUR and USD funds (but not GBP)—a month where Equity Emerging Markets Global was the most popular classification.
Product Type Overview
Chart 6: Product Type AUM by Year, 2003-2025 (€bn)
Source: LSEG Lipper
The long‑term AUM trend across all fund product types is one of substantial expansion, with the industry more than quadrupling from €343trn in 2003 to €174trn in 2025, with growth accelerated particularly after 2012, before a temporary dip to €14.37trn in 2023 and a renewed rise through 2025.
Actively managed funds remain the dominant product category throughout the period, scaling from €3,329.78 bn in 2003 to €12,738.30 bn in 2025. While their share declines structurally as passive products gain traction, they still contribute the largest portion of the industry’s AUM. Notably, they follow the broader market pattern: strong expansion into 2021 (€12,321.55 bn), contraction in 2023 (€11,169.62 bn) and renewed growth thereafter.
Index trackers demonstrate robust, steadily compounding growth, rising from €101.8bn in 2003 to €4.66trn in 2025. A marked acceleration occurs from 2012 onward, reflecting increasing adoption of systematic, low‑cost strategies.
ETFs are the fastest‑growing segment, expanding from €17.38bn in 2003 to €2.58trn in 2025. The most rapid increases occurred after 2015, with AUM rising from €427.94bn to €1.33trn by 2021 and then doubling again by 2025.
Overall, the trend illustrates a decisive long‑term shift toward passive products—especially ETFs—while active funds continue to grow in absolute terms but at a slower relative pace.
Chart 7: Product Type Flows by Year, 2004-2025 (€bn)
Source: LSEG Lipper
ETFs deliver persistently positive flows across the entire period, underscoring durable investor demand for low‑cost, intraday‑traded vehicles. After steady growth through the 2010s (for example, +€106.7bn in 2019), inflows accelerate post‑pandemic: +€161.01bn in 2021, €154.89bn in 2023, and a step‑up to €256.36bn in 2024 before a modest ease to €242.58bn in 2025. The 2024 jump (+€101.47 versus 2023) highlights ETFs’ increasing role as the preferred passive wrapper.
Index‑tracking mutual funds grow over the long run but are markedly more volatile than ETFs. Flows crest at +€113.03bn in 2019, remain positive through 2023 (+€52.8bn), and firm to +€65.21bn in 2024 before swinging to
-€19.40 in 2025—the only negative print in the series. The 2025 reversal, following softer momentum since 2021 (€62.26), suggests rotation toward ETFs within the passive sleeve.
Actively managed mutual funds show the largest cyclical swings. Extreme stress appears in 2008 (-€601.81bn) and again in 2022 (-€257.12bn), followed by stabilization in 2023 (-€12.35bn) and a powerful rebound in 2024 (€298.65bn) and 2025 (€481.54bn). It’s noticeable that in years of net redemptions (2008, 2011, 2018 and 2022), passive products have remained in the black, as investors prioritise cost when faced with losses.
Notably, the 2024 to 2025 resurgence makes active funds the largest absolute contributor to net flows in those years, even as the structural share shift toward passive—led by ETFs—continues.
Chart 8: Estimated Net Flows by Management Approach and Product Type, 2025. €bn
Source: LSEG Lipper
Active mutual funds lead ETFs over the year, with index-tracking MFs in the red (active MFs +€400.19bn, ETFs +€333.31bn, and passive MFs -€28.78bn). When MMFs are stripped out, actively managed mutual funds’ share of long-term asset flows was +€2.57.72bn, flows to long-term assets in ETFs were +€3.18.28bn, while index-tracking mutual funds saw redemptions of €39.22bn.
Chart 9: Product Type AUM, 2025 (%)
Source: LSEG Lipper
At the risk of stating the too obvious, active funds command the majority of AUM (73.23%), with ETFs at 14.82% and index tracking MFs at 11.96%.
Trends by Asset Class, Active v Passive
Chart 10: UK Asset Class Flows, Passive and Active Mutual Funds and ETFs, 2025 (€bn)
Source: LSEG Lipper
Total net flows for the year were €704.72bn (+€371bn MF/+€333.31bn ETF).
Bonds were the most popular asset class (+€284.06bn: +€221.36bn MF/+€62.69bn ETF). In performance terms, the asset class had a strong year, supported by policy easing, and easier financial conditions led by financials, despite persistent tariff risks.
Equities took second place (+€175.72bn: -€73.93bn MF/+€249.65bn ETF) as the asset class continued to deliver across global markets despite the multiplying geopolitical concerns over the year. Overall, investors clearly feel that while the music continues to play, they will continue to dance.
MMFs follow (+€167.94bn: +€152.91bn MF/+€15.03bn ETF), in a complex dance between USD and EUR vehicles, despite a Turkish lira selloff over the year, and while GBP pushes on (see chart 8).
Next comes mixed assets (+€49.52bn: +€48.7bn MF/+€0.82bn ETF); alternatives (+€24.48bn: +€26.72bn MF/+€1.75bn ETF), and commodity funds (+€10.44bn: +€7.08bn MF/+€3.36bn ETF).
On the negative side of the equation, “other” (-€1.43bn) and real estate funds (-€10bn) suffered YTD redemptions, all from mutual funds.
Lipper Global Classification
Chart 11: 10 Largest Positive Flows by Lipper Global Classification, 2025 (€bn)
Source: LSEG Lipper
Money Market USD is top over the year (+€92.83bn: +€89.34bn MF/+€3.49bn ETF), despite periodic redemptions, especially December. That it’s three places ahead of Money Market EUR (+€51.08bn: +€39.69bn MF/+€11.39bn ETF) may seem surprising. We see two main reasons. First is MM USD offers a higher rate of return than EUR, albeit with currency risk, which may explain the occasional rush for the exits. This is supported by the fact that UK investors have stayed away, instead preferring Money Market GBP (€27.62bn). Why? Likely because the UK base rate is more in line with the US, and comes without the currency risk. Another is that investors may be parking cash in these vehicles as they move in an out of US risk assets, but the relative absence of this phenomenon in the UK market would militate in favour of the former explanation.
Equity Global takes second place (+€63.4bn: -€10.12bn MF/+€73.53bn ETF), with Equity Europe (+€42.39bn: +€4.2bn MF/+€38.19bn ETF) also demonstrating the rotation away from Equity US over the year. It’s interesting that this has favoured Global—with a large US crossover—rather than a clearer (and for the past 12 months more profitable) European equity alternative. Equity Emerging Markets Global has also been a clear beneficiary, and a strong performer over the year (€29.24bn: €7.93bn MF/ €21.31bn ETF).
Bond Global Short Term (+€24.05bn) and Bond EUR Short Term (+€22.87bn) both demonstrate the fact that many investors had been hunkered down at the short end of yield curves in search of income, although this has ebbed over the year as curves have normalised and steepened.
Chart 12: 10 Largest Negative Flows by Lipper Global Classification, 2025 (€bn)
Source: LSEG Lipper
Equity UK continues to languish at the bottom of the table despite the strong performance of the FTSE 100 over 2025 (-€20.35bn: -€21.18bn MF/+€0.83bn ETF). This is predominantly a domestic phenomenon, driven by structural factors. While UK pension funds’ asset shift may largely have fed through, wealth managers continue a shift to more global benchmarks, and this is likely presenting an ongoing headwind—although we did see the first positive flows in the UK market in December 2025 since November 2024. Equity US Small & Mid Cap (-€7.5bn) and Equity UK Income (-€5.6bn) also continue to languish.
The €10.17bn redemptions from Target Maturity Other were largely the result of more than the liquidation of about €16bn-worth of funds in this classification over Q3.
In a year favouring fixed income, there are relatively few bond classifications in the relegation zone: only four in the bottom 20. Of these, three are corporates: Bond Global Corporates LC (-€9.25bn), Bond GBP Corporates (€-7.5bn), and Bond Global Corporates GBP (-€2.68bn). The other is Bond Convertibles Global (-€2.61bn). One potential explanation is that historically tight spreads have driven investors to seek a better risk-adjusted return in portfolios more weighted to government debt, which is where the flows have favoured.
Money Market TRY (that is, Turkish lira) is another unusual one, selling off to the tune of €8.38bn over the year, mainly in H1. The lira has been in long-term decline, but higher central bank rates in 2024 tempted investors, from investment banks to hedge funds, into the currency. The lira trended up against the euro from late summer 2024, but then resumed its downward journey from mid-January, and investors pulled their cash—clearly, lots of it.
Sustainable Funds
Chart 13: Asset Class Flows, SFDR v Conventional, 2025 (€bn)
Source: LSEG Lipper
Article 8 and 9 bond and MMFs took the majority of flows in their asset class (+€1.68bn/ 59.38% and +€121.01bn/72.06%, respectively). Third-placed article 8 and 9 alternatives also take the bulk of flows to the asset class (+€22.08bn/77.53%).
Mixed assets follow (+€21.12bn/42.65%), then, at some distance, commodities (+€1.03bn/9.83%).
Sustainable equity suffered the worst redemptions (-€10.56bn), despite positive flows for conventional funds (+€186.28bn) and article 8 (+€5.45bn). Real estate funds also saw outflows of €6.21bn, or 62.04% of the total redemptions for this asset class.
Note: Lipper has published a more detailed 2025 review of the European SFDR fund market here.
Fund Management Company
Chart 14: Fund Flows by Fund Management Company—Top 10, 2025 (€bn)
Source: LSEG Lipper
Flows of the top 10-selling fund providers totalled €379.99bn, or 52.79%, of total net flows for the year.
BlackRock kept its lead over the year, being by far the dominant ETF player in the European market, despite net outflows from its MF range (+€75.81bn: -€39.58bn MFs/+€115.4bn ETFs).
JP Morgan takes second place, with the strongest mutual fund sales (+€50.88bn: +€46.26bn MFs/+€4.62bn ETFs), and then, as in October and November, DWS (+€42.53bn: +€14.25bn MFs/+€28.28bn ETFs).
Launches, Closures, and Mergers
Chart 15: Mutual Fund and ETF Share-Class Launches, Mergers and Liquidations, 2021-2025
Source: LSEG Lipper
Over the course of 2025, Europe’s fund promoters launched 2,342 funds, while liquidating 925, and merging a further 920. Launches were in line with last year (2,315), with liquidations and mergers marginally down. Overall, therefore, there is a net increase in funds (launches minus liquidations plus mergers) of 497. Over the five years covered by the graph, that’s the greatest increase, after 2021’s 421. That year also marked a previous peak in TNA for the industry, preceding 2022’s slump in assets. That likely incentivised the cost savings represented by the contraction in overall fund numbers over 2022 and 2023, with 2024 seeing a net increase of 294.
Some 25 of the funds merged or liquidated held assets of more than €1bn, with all but three of these being merged. The largest liquidation was, perhaps unsurprisingly, a Target Maturity Bond EUR fund slated to wind up that year. The average size of those funds closed over the year was €101m, and the median, €28m, indicating (unsurprisingly) that economies of scale continues to be a prime driver in this housekeeping exercise.
Chart 16: Mutual Fund and ETF Share-Class Launches, Mergers and Liquidations, by Asset Class 2025
Source: LSEG Lipper
There was most activity in the equity space, with 813 launches, 330 liquidations, and 268 mergers. Popular classifications for launches included Equity Global (305), Equity US (102), Equity Europe (90), Equity Emerging Markets Global (33), with ETF sector activity around IT and Industrial—the latter particularly around defence-themed launches. Conversely, Equity Global also saw a significant number of closures (188), as did Equity Europe (63).
Bonds were the asset class with the next highest number of launches (634), contrasting with 225 liquidations and 186 mergers. Bond Global EUR proved a popular area for launches (76, albeit with 49 closures), as did Bond Global USD (33), although target maturity bond launches dominated, as they did with liquidations and mergers. But that’s the nature of the strategy. Bond Emerging Markets Global funds saw 28 mergers and liquidations, split fairly evenly between hard and local currency.
Of the 486 mixed assets launches, 130 were Mixed Asset EUR Flexible – Global. Paradoxically, this was also the most prevalent classification in mergers and closures: 163 out of 575. This was the only asset class to see more liquidations and mergers than closures, with flows rather anaemic relative to TNA (see chart 7).
Alternatives saw 282 launches, 109 liquidations and 90 mergers; MMFs 48, 6 and 10 respectively, and real estate (32, 11 and 1), other (31, 17 and 4) and commodities (16, 5 and 3) comprising the rest.
Methodology
Flows and performance data are calculated from the universe of mutual funds and ETFs that are domiciled and registered for sale in Europe.
