The European ETF market recorded its “best quarter” for inflows in Q1 2025, attracting $93 billion in net new assets, surpassing the $91 billion set just in the last quarter, according to asset manager Invesco’s data.
Total assets under management reached $2.38 trillion by the end of the quarter due to strong commodity performance, particularly gold and steady gains in fixed income, despite broadly flat equity returns, according to the data.
Equity ETFs dominated, accounting for 80% of all flows in Q1, in line with the 2024 average. Investors preferred Europe-focused strategies, marking a shift away from the US.
European-exposed ETFs led all categories with a record $19.4 billion net inflows, making up nearly one fifth of total ETF inflows for the quarter. Within this, broad European equity funds pulled in $11.4 billion, while German equity ETFs attracted $5 billion.
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In contrast, US equity ETFs lost $2.2 billion in March, bringing the total quarterly outflow to $4.5 billion. That marked a reversal from the record demand seen in Q4 2024.
Gold stood out as the top-performing asset class, delivering a 19% return over the quarter. Gold ETPs saw strong inflows for the fourth consecutive month, driven by safe-haven demand amid rising market uncertainty and slowing equity momentum.
Commenting on the outlook for Q2 2025, Gary Buxton, head of Emea ETFs at Invesco, said: “The valuation case for European equities remains supportive, and growing concerns over concentration risk amongst Global and US indices could prompt investors to continue looking to Europe to diversify.
Similarly, so long as uncertainty persists, the case for gold will remain strong. Gold has demonstrated low correlation with equities and other risk assets, and also tends to hold up well during times of increased equity market volatility (in risk-off conditions) and uncertainty.”
