The global financial markets were shaped by a sharp shift in macroeconomic narratives, driven primarily by geopolitical tensions, energy price volatility, and an increasingly fragmented monetary policy landscape over the course of Q1 2026.
Bond markets reflected a transition from the synchronized easing expectations of late 2025 to a more uncertain environment. In March rising oil prices, linked to renewed geopolitical tensions in the Middle East, pushed inflation expectations higher and challenged the disinflation trend. Within this environment, central bank policies were back in the focus of investors.
Looking more closely, Q1 2026 marked a clear divergence among major institutions. The Federal Reserve maintained a cautious “wait-and-see” stance, holding rates steady as it balanced moderating inflation against geopolitical risks and energy-driven price pressures. Similarly, the European Central Bank kept rates unchanged, signalling flexibility but refraining from further easing amid rising inflation linked to energy costs. The Bank of England also paused, with policymakers highlighting the inflationary impact of the energy shock and even reopening the discussion around potential tightening.
In contrast, the Bank of Japan stood out by maintaining a tightening bias after its earlier policy shift, reflecting stronger domestic inflation dynamics and a gradual exit from ultra-loose policy.
At the same time, structurally higher yields continued to attract investors back into fixed income as an asset class, with bonds regaining their role as a source of income and diversification.
Equity markets experienced notable sector rotation rather than a uniform trend over the course of Q1 2026. Energy stocks outperformed amid the surge in oil prices, while rate-sensitive sectors such as technology came under pressure as expectations for rapid monetary easing were pushed back. This rotation reflected a broader repricing of inflation and interest rate trajectories, as well as persistent uncertainty about global growth. Nevertheless, the overall trend in corporate earnings during Q1 2026 can be characterised as solid but uneven growth, with a clear divergence across sectors and regions, and increasing sensitivity to macroeconomic and geopolitical conditions. At an aggregate level, measured by the S&P 500 companies, earnings growth remained resilient, as companies are expected to deliver low double-digit year-on-year earnings growth. This indicates that, despite macro uncertainty, corporate profitability continued to expand and exceeded (partly) earlier expectations.
Overall, Q1 2026 was characterised by a move from policy synchronisation to divergence, from disinflation optimism to renewed inflation uncertainty, and from broad-based equity gains to more selective market leadership. These dynamics underline a more complex investment environment in which geopolitical developments and central bank policies remain central to investor confidence and market direction.
Assets Under Management by Asset Type
From the perspective of the global ETF industry, the performance of the underlying markets led, in combination with the estimated net flows, to increasing assets under management (from $18,690.6 bn as of December 31, 2025, to $19,003.5 bn at the end of March 2026) over the course of the first quarter 2026. At a closer look, the increase in assets under management of $313.0 bn for Q1 2026 was driven by the performance of the underlying markets (-$409.6 bn), while the estimated net inflows added $722.6 bn to the assets under management.
Graph 1: Growth in Assets Under Management in the Global ETF Industry by Asset Type, December 31, 2025 – March 31, 2026 (in bn USD)
Source: LSEG Lipper
As for the overall structure of the global ETF industry, it was not surprising equity ETFs ($14,402.9 bn) held the majority of assets at the end of March, followed by bond ETFs ($3,290.6 bn), alternatives ETFs ($571.8 bn), commodities ETFs ($500.6 bn), money market ETFs ($135.3 bn), mixed-assets ETFs ($83.0 bn), and “other” ETFs ($19.4 bn).
Graph 2: Market Share, Assets Under Management in the Global ETF Industry by Asset Type, March 31, 2026
Source: LSEG Lipper
Taking the current market environment into account, it is not surprising that the assets under management for all asset types with the exception of money market did not made an (month end) all-time high at the end of March.
ETF Flows by Asset Type
The global ETF industry saw strong inflows (+$722.6 bn) over the course of Q1 2026. The flow pattern over the course of the first quarter shows that the inflows into ETFs slowed down as the geopolitical tensions in the Middle East intensified over the course of March.
Graph 3: Monthly Estimated Net Sales, January 1, 2026 – March 31, 2026 (USD Billions)
Source: LSEG Lipper
The impressive estimated net flows for January (+$260.9 bn) and February (+$288.1 bn) might be seen as proof that the acceptance and adoption of ETFs by investors around the globe has been further increased over the course of Q1 2026.
The inflows in the global ETF industry for Q1 2026 were driven by equity ETFs (+$453.1 bn), followed by bond ETFs (+$178.6 bn), alternatives ETFs (+$36.0 bn), money market ETFs (+$32.7 bn), commodities ETFs (+$12.3 bn), and mixed-assets ETFs (+$10.3 bn). On the other side of the table, “other” ETFs (-$0.5 bn) faced outflows for the month.
Graph 4: Estimated Net Sales by Asset Type, January 1 – March 31, 2026 (USD Billions)
Source: LSEG Lipper
Given the market environment, it was somewhat surprising to see that the estimated net inflows into ETFs were led by equity ETFs over the course of Q1 2026. Nevertheless, the overall fund flows picture does in general look like one would expect given the overall fund flow and market trends in the global ETF industry.
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 March, the global ETF market was split into 304 different Lipper Global Classifications. The highest assets under management at the end of the month were held by ETFs classified as Equity U.S. ($6,454.1 bn), followed by Equity Global ex U.S. ($1,184.2 bn), Equity U.S. Small & Mid Cap ($1,030.7 bn), Equity Global ($827.9 bn), and Equity Japan ($769.9 bn). These five classifications accounted for 54.03% of the overall assets under management in the global ETF industry, while the 10 largest classifications by assets under management combined accounted for 68.24%.
Overall, 16 of the 304 Lipper classifications each accounted for more than 1% of assets under management. In total, these 16 classifications accounted for $14,716.3 bn, or 77.44%, of the overall assets under management.
Graph 5: Ten Largest Lipper Global Classifications by Assets Under Management, March 31, 2026 (USD Billions)
Source: LSEG Lipper
The Lipper classifications 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 6: Ten Smallest Lipper Global Classifications by Assets Under Management, March 31, 2026 (USD Billions)
Source: LSEG Lipper
ETF Flows by Lipper Global Classifications
The net inflows of the 10 best-selling Lipper classifications for Q1 2026 accounted for $406.4 bn. In line with the overall sales trend for March, equity peer groups (+$288.3 bn) gathered the majority of flows by asset type on the table of the 10 best-selling classifications by estimated net inflows for the month. That said, compared with the concentration of flows for the single regions or domiciles, the 10 best-selling Lipper classifications are more diversified at the global level. This flow pattern is expected, as investors from the different regions may have different preferences when it comes to their investments. Nevertheless, the table of the 10 best-selling Lipper classifications is heavily impacted by the estimated net flows from the U.S.
Given the overall fund flow trend in the global ETF industry and the dominance of the U.S. as the leading market for ETFs and largest stock market in the world, it was not surprising that Equity U.S. (+$79.5 bn) was the best-selling Lipper global classification for the month. It was followed by Equity Global ex U.S. (+$67.3 bn), Equity Emerging Markets Global (+$50.6 bn), Equity Global (+$47.1 bn), and Bond USD Medium Term (+$39.6 bn).
Since money market is in general not considered a core asset type within the global ETF industry, it is somewhat surprising that there was one money market classification on the table for the best-selling classifications for the global ETF industry. That said, it looks like money market ETFs get more interest from some local ETF investors over time. This means money market may become a core asset type for ETF investors in the near future.
More generally, these numbers showed the global ETF segment is somewhat concentrated when it comes to the estimated net flows by classification. Generally speaking, one would expect the flows into ETFs to be concentrated, even as investors around the globe may have different preferences, the main trends are normally global investment trends and investors use ETFs to implement their strategic market views and short-term asset allocation decisions. These products are made and, therefore, are easy to use for these purposes.
Graph 7: Ten Best- and Worst-Lipper Global Classifications by Estimated Net Sales, January 1- March 31, 2026 (USD Billions)
Source: LSEG Lipper
On the other side of the table, the 10 peer groups with the highest estimated net outflows for the month accounted for $24.4 bn in outflows.
Bond USD High Yield (-$5.6 bn) was the classification with the highest outflows for the month. It was bettered by Equity China (-$4.6 bn), Equity Sector Financials (-$3.7 bn), Equity Sector Consumer Discretionary (-$2.5 bn), and Equity Sector Communication Services (-$2.4 bn).
As the bottom of the table is dominated by non-core classifications, this may indicate that ETF investors around the globe sell riskier assets to align their portfolios to the current market environment. Nevertheless, it is somewhat surprising to see high outflows from Equity Sector Communication Services, since corporations operating in this sector should be less impacted by higher prices for oil, as companies in other sectors. Since telecoms are in general very liquid stocks, investors globally might have chosen this sector to reduce the overall risk in their portfolios and to generate a cash buffer.
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 219 of the 776 ETF promoters covered in this report holding assets at or above $1.0 bn, totalling $18,900.1 bn at the end of March. The largest ETF promoter in the global ETF industry—iShares ($5,561.7 bn)—accounted for 29.27% of the overall assets under management, ahead of the number-two promoter—Vanguard ($4,287.5 bn)—and the number-three promoter—State Street SPDR ($1,981.9 bn).
Graph 8: The 10 Largest ETF Promoters by Assets Under Management, March 31, 2026 (USD Billions)
Source: LSEG Lipper
The 10-top promoters accounted for AUM of $14,934.6 bn, or 78.59%, of the overall assets under management in the global ETF industry. This meant, in turn, the other 766 ETF promoters which had registered at least one ETF for sale over the observation period accounted for only 21.41% 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 or domiciles.
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 March. iShares was the best-selling ETF promoter in the global ETF industry for the month (+$149.7 bn), ahead of Vanguard (+$144.0 bn) and State Street SPDR (+$26.9 bn).
Graph 9: Ten Best-Selling ETF Promoters, January 1 – March 31, 2026 (USD Billions)
Source: LSEG Lipper
The flows of the 10-top promoters accounted for estimated net inflows of $447.1 bn. As for the overall flow trend over the course of Q1 2026, it was clear that some of the 787 promoters (185) faced estimated net outflows (-$15.4 bn in total) over the course of the month.
Assets Under Management by Region
ETFs domiciled in North America ($14,264.0 bn) held the highest assets under management in the global ETF industry at the end of March. They were followed by ETFs domiciled in Europe ($3,063.1 bn), ETFs domiciled in the Indo-Pacific region ($1,631.7 bn), ETFs domiciled in South and Central America ($28.8 bn), ETFs domiciled in Africa ($14.8 bn), while other domiciles held ($1.2 bn) in assets under management.
Graph 10: Assets Under Management in the Global ETF Industry by Region – March 31, 2026 (in bn USD)
Source: LSEG Lipper
These numbers show that the global ETF industry is a truly global industry with a high concentration of assets under management in a few regions/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 member states of the European Union (EU) 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 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 also include flows from South and Central America, as well as from Asia.
Graph 11: Estimated Net Flows in the Global ETF Industry by Region, January 1 – March 31, 2026 (in bn USD)
Source: LSEG Lipper
As one may expect from the assets under management, ETFs domiciled in North America (+$514.9 bn) enjoyed the highest estimated net inflows over the course of Q1 2026. They were followed by ETFs domiciled in Europe (+$126.9 bn), the Indo-Pacific region (+$79.4 bn), South and Central America (+$1.2 bn), Africa (+$0.2 bn), and other regions (+$0.003 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 March, the U.S. was the largest single country ETF domicile ($13,650.7 bn) of the 41 ETF domiciles covered in this report, followed by Ireland ($2,212.6 bn), Japan ($728.1 bn), Canada ($613.3 bn), and Luxembourg ($566.9 bn). These five ETF domiciles account for assets under management of $17,771.6 bn, or 93.52%, of the overall assets under management in the global ETF industry.
Graph 12: Ten Largest ETF Domiciles by Assets Under Management – March 31, 2026 (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
To add more detail to the estimated net flow numbers, it makes sense to shed a light on the single domiciles. The U.S. (+$461.9 bn) was, as to be expected, the single fund domicile with the highest estimated net inflows for Q1 2026. It was followed by Ireland (+$87.4 bn), Canada (+$53.0 bn), South Korea (+$31.7 bn), and Luxembourg (+$26.6 bn).
Graph 13: The 10 ETF Domiciles with the Highest Estimated Net Inflows, January 1 – March 31, 2026 (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.
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.
