European ETFs recorded $93 billion in net new assets during the first quarter of 2025, marking their highest inflows on record and surpassing the previous high of $91 billion set in Q4 2024.
Per Invesco’s latest European ETF Snapshot, despite largely flat equity returns, rising commodity prices, and solid fixed income gains, pushed total European ETF assets under management to $2.38 trillion by the end of March.
Equities accounted for 80% of Q1 inflows, maintaining pace with the 2024 average. However, Invesco’s data revealed a shift in investor focus, pivoting away from US equities toward European exposures.
ETFs focused on Europe attracted a record $19.4 billion inflows, comprising almost a fifth of the net new assets.
Broad European equity products accounted for $11.4 billion, while German equity ETFs alone captured $5 billion, reflecting heightened investor interest in regional diversification amid global market uncertainty.
CoinShares data for April 18 shows the trend includes European crypto ETPs, notably in Switzerland and Germany, which recorded positive inflows, while US-listed products saw significant outflows.
Switzerland attracted $43.7 million in inflows, and Germany recorded $22.3 million, in contrast to $71 million in outflows from the United States. This divergence supports the analysis of sustained investor preference for European assets and a broader shift away from US exposures across traditional and crypto markets.
However, just-released data from last week indicates a potential recovery in US spot crypto ETFs inflows, though German and Swiss ETP inflows also remain strong.
Appetite for US assets declines
Appetite for US equities has declined as March saw $2.2 billion in outflows from US equity ETFs, bringing total Q1 outflows to $4.5 billion, less than 10% of the record inflows experienced in Q4 2024. The downturn in US-focused flows coincided with growing concerns over concentration risk in US and global indices.
Commodities, particularly gold, contributed significantly to the quarter’s positive asset growth. Gold exchange-traded products experienced consistent positive flows over the past four months after largely being bypassed during much of the earlier gold price rally.
Gold delivered a 19% return in Q1, outperforming other major asset classes as investors sought traditional safe-haven assets amid an increasingly uncertain economic outlook and rising equity market volatility.
The insights from Q1 inflows come against tariff-induced volatility that emerged in April. Gary Buxton, Head of EMEA ETFs at Invesco, emphasized that the first quarter positioning indicates underlying investor sentiment.
He noted that European equities retain valuation support, while the increasing unease over concentration risks in US and global benchmarks could further sustain the pivot towards European markets.
Buxton also highlighted that ongoing economic uncertainty may continue to bolster gold’s appeal. The asset’s historically low correlation with equities and tendency to perform during periods of heightened risk aversion illustrate its role as a diversification tool.
Bitcoin is also reaffirming its position away from a risk asset toward a more technically aligned risk-off investment.
As market conditions are in flux, the inflows into European equities and gold observed in Q1 may inform future investor strategies, particularly in uncertain environments and a search for regional and asset diversification.
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