European UCITS ETF flows:

 It was a record year for the European UCITS ETF market with inflows of €330.6bn in 2025, taking total assets under management to €2.57 trillion.

Equities led the way with €249.3bn of net new assets (NNA) in the year, an increase of 15.9% on 2024. Fixed income gained €77.8bn in 2025, with year-on-year growth of 16.6%.

In equities, it was a year of rotation as investors took a more balanced approach to allocations instead of the US-focused approach favoured in 2024. There was a strong focus on Europe, all-country world (ACWI) and emerging market (EM) equity strategies.

Government bonds (€27.6bn) and IG corporate credit (€24.2bn) accounted for the majority of fixed income’s overall inflows of €77.2bn, while there were significant allocations into money market funds (€13.4bn)

It was a record year for Euro corporate credit, recording its strongest ever year with +21.8% NNA growth on inflows of €18.5bn.

Equities: Bumper year for European strategies

European equity exposures were a bright spot in 2025, attracting record annual NNA of €65.8bn (+23.1% year-on-year).

Germany’s decision to increase spending on defence and infrastructure, along with a broader European commitment to bolster the continent’s strategic autonomy, all contributed to European equity asset gathering.

Given the political and macroeconomic backdrop, investors took a more granular approach to Europe, with substantial allocations to industrials, defence, information technology (IT) and financials.

European sector ETFs gathered over €35.5bn with most of the assets directed into industrials (€13.3bn), while NNA for IT and financials came in at €8.9bn and €7.3bn respectively. Meanwhile defence strategies gathered almost €10bn in the year, well ahead of robotics & AI thematic exposures (€2.3bn).

There was a rebound in US equity flows from May onwards, driven by the strong market recovery following early April’s “Liberation day” sell-off, which was further supported by  strong earnings from the tech giants. But the €37.2bn funnelled into US equity indices in 2025 trailed world (€63.3bn), ACWI (€42.7bn) and EM (€33.3bn).

Continuing the theme of more granular allocations, EM investors took a similar approach. About one-third of overall EM inflows were directed at more specific investments including China (€6.6bn), with a particular focus on China tech indices, EM Asia (€1.7bn) and India (€1bn).

In a year marked by heightened uncertainty, investors allocated €11.6bn to more defensive income equity strategies. These strategies focus on high dividend companies, which tend to be more robust in times of market turbulence.

ESG equity strategies gathered €31.6bn with the bulk of that going into low tracking error strategies, as investors continue to be selective about performance.

Fixed income: Duration management in focus

Duration management was a key trend in fixed income in 2025 in both government bonds and corporate credit. The nuances were clear in EUR corporate bond strategies, which were also the single largest NNA collector by fixed income sub-asset class category at €18.5bn.

Shorter duration offers attractive yield levels with less sensitivity to changes in interest rates compared to longer duration exposures.

Short-term exposures (1-5 years) accounted for just over 40% of inflows (€7.9bn) into EUR corporate bond indices, while around a quarter was into ultra short-term exposures (under 1 year). This marked a major shift from both 2023 and 2024 when all-maturity EUR corporate bond strategies were favoured.

In the US corporate bond market there was a similar preference for short-term exposures (€6bn) while there were significant outflows from all-maturity US corporate credit indices.

Similarly, investors favoured short-term EUR government debt with NNA of €4.9bn and in US Treasuries, ultra short-term and short-term exposures led the way at €7bn and €1.6bn respectively.

ESG fixed income strategies gained €18.2bn and accounted for a much greater proportion of overall NNA within the asset class compared to equities.

Commodities: Gold reaches new heights

In 2025 the gold price hit a new high of $4,533/oz, buoyed by political uncertainty, concerns over inflation, and a general demand for diversification from investors.

Gold ETCs added NNA of €5.6bn by year end. The precious metal continues to be in demand by EM central banks, but in 2025 there was also a resurgence of non-central bank investors heading into the gold market.

Source: Amundi