European-focused exchange traded products (ETPs) attracted more investor flows than their US counterparts in Q1 2025 as market volatility and US tariff tensions redirected capital, according to European ETF provider HANetf’s report.
As US markets were impacted under tariff pressure from President Trump, investors put money into European-focused ETPs, pushing the region’s total ETP assets to a record $2.4 trillion.
March saw $8.95 billion allocated to Europe-focused ETPs, while US-focused funds suffered outflows of nearly $1 billion. This pivot comes as investors seek stability and value outside the US, according to the report, according to the data provider, with European equities benefiting from comparative resilience and more predictable policy environments.
Core equity ETFs led the way, drawing in $45.70 billion in Q1 and pushing total assets in the segment past $1 trillion. Fixed income ETFs followed with $15.19 billion in inflows, as investors also sought defensive positions in response to macroeconomic uncertainty.
Active ETF assets grew by 11.65% in Q1, according to the data. Flows totalled $6.39 billion, bringing European active ETF assets to $61.89 billion. Options-based ETFs also stood out, seeing a 54.55% increase in assets over the quarter, driven by rising demand for structured return strategies.
A significant development for active managers came with Europe’s approval of semi-transparent ETF structures, highlighted the report. This regulatory shift allows issuers to delay the daily disclosure of holdings—similar to US rules introduced in 2019. The move is expected to make European markets more attractive to active managers concerned about protecting intellectual property, HANetf added, potentially opening the door to new cross-border launches.
HANetf also reported continued growth in the number of European ETP brands, which now stand at 131, up from 116 three quarters ago. While some exits were recorded, the net increase signals a healthy and expanding market with growing appeal to investors and issuers.
Defence ETFs experienced exceptional growth in Q1, with $4.16 billion in flows representing 4.5% of total ETF flows and a fivefold increase from the previous quarter. As geopolitical tensions persist, demand for defence and security-related strategies has surged, positioning this once-niche category for sustained attention, shared HANetf.
