For Europe’s UCITS ETF market, 2025 was not merely a good year; it was a landmark one. According to latest data released by fund manager Amundi, net inflows reached a record €330.6bn, lifting total assets under management to €2.57trn and confirming ETFs as the continent’s investment vehicle of choice.
In a year shaped by political uncertainty, shifting monetary expectations and geopolitical strain, investors responded not by retreating, but by diversifying, with notable confidence.
Equities carried the momentum. According to Amundi, they attracted €249.3bn of net new assets over the year, a rise of almost 16% on 2024. Fixed income, often presumed to be the cautious sibling, was hardly left behind, drawing €77.8bn, a 16.6% increase year on year. The result was a market that grew not just larger, but more sophisticated in its allocation choices.
American no longer monopolises investor attention
Unlike 2024’s heavy reliance on American equities, 2025 was defined by rotation. Investors adopted a more balanced global stance, favouring European equity strategies, all-country world indices and emerging markets. World and ACWI equity ETFs gathered €63.3bn and €42.7bn respectively, comfortably outpacing US equity inflows of €37.2bn. America still mattered, but it no longer monopolised attention.
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Bumper year for European equity ETFs
Europe, in particular, enjoyed a bumper year. European equity ETFs recorded a record €65.8bn of inflows, up 23% on the previous year. Germany’s decision to boost defence and infrastructure spending, combined with broader efforts to enhance Europe’s strategic autonomy, sharpened the region’s appeal.
Investors did not simply buy Europe wholesale; they drilled down. Sector ETFs gathered €35.5bn, led by industrials (€13.3bn), followed by information technology (€8.9bn) and financials (€7.3bn). Defence-themed strategies alone attracted nearly €10bn, far surpassing robotics and AI themes.
Elsewhere, emerging markets benefited from similarly granular positioning. Roughly a third of EM inflows targeted specific regions or countries, with China attracting €6.6bn, much of it into technology indices, alongside steady allocations to EM Asia and India. Even amid uncertainty, investors proved willing to be selective rather than sceptical.
ESG equity ETFs attract over €31 billion
Income strategies also had their moment. High-dividend equity ETFs drew €11.6bn, reflecting demand for resilience in volatile conditions. ESG equities gathered €31.6bn, with flows concentrated in low-tracking-error products, a reminder that sustainability preferences remain tempered by performance discipline.
Fixed income told a story of careful calibration rather than retreat. Government bonds (€27.6bn) and investment-grade corporate credit (€24.2bn) dominated inflows, supplemented by €13.4bn into money-market funds. Euro corporate credit had its strongest year on record, with €18.5bn of inflows and growth of nearly 22%.
Duration management was the defining theme. Investors favoured shorter maturities, locking in yields while limiting sensitivity to rate moves. Over 40% of inflows into euro corporate bond ETFs went into 1-5 year exposures, with a further quarter into ultra-short strategies. The same pattern appeared in US credit and government bonds, signalling consistency rather than caution.
“Shorter duration offers attractive yield levels with less sensitivity to changes in interest rates compared to longer duration exposures,” Amundi noted in its report.
Even commodities played their part. Gold prices surged to a record $4,533 an ounce, driven by inflation concerns and geopolitical unease. Gold ETCs attracted €5.6bn, buoyed not only by central banks but also by renewed interest from private investors.
Taken together, 2025 suggests a market coming of age. Europe’s ETF investors are neither complacent nor fearful. Instead, they are purposeful, balancing risk, yield and resilience with a level of nuance that bodes well for the industry’s next chapter.
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