European equity ETFs second only to Global equities in net new assets
Gold the best-performing asset in Q1 with 19% return
Q1 flows into fixed income products remained strong, totalling US$13.8bn
The European ETF market had its best quarter in terms of flows, with US$93 billion of NNA in Q1 eclipsing the US$91 billion in Q4 2024. The total AUM of US$2.38 trillion at the end of the quarter was helped by strong commodity returns (particularly from gold) and solid gains in fixed income markets. Equity returns were broadly flat in the quarter.
The percentage of flows going into equities (80%) was in-line with the average in 2024, but we saw a shift away from the US towards Europe as the quarter progressed. This included broad European exposures, country-specific (namely Germany) and sectors. Global equities took top spot in the quarter, while smart beta continued to see increased demand. Equal weight, low volatility, value and high dividends were among the more defensive strategies that gathered interest as equity markets came under pressure.
Investors' risk-off attitude was also reflected in fixed income and commodity flows. Cash management was the only fixed income category that made it into the top 10 for net inflows although Euro government bonds also saw healthy demand. Sentiment towards US Treasuries waned in March, but net flows remained positive for the quarter.
Gold was the big winner in the commodity asset class. Flows into gold ETPs have been positive for the past four months after being largely absent for most of the gold price rally before then. Gold was the best-performing asset in Q1 with a 19% return, driven by the allure of its perceived "safe haven" characteristics as equity markets fell and the economic outlook became increasingly uncertain.
In our latest ETF Snapshot, we’ve highlighted opportunities across asset classes that might be worth considering in the current market environment, including a few spotlight ETFs that may be of interest.
Gold had a remarkable month, gaining 9.3% after breaking through US$3,000 and ending March at US$3,124. Economic and geopolitical uncertainty drove the gold price higher ahead of the trade tariffs scheduled to be announced on 2 April. Discover insights into the key macro events and what we think you should be keeping your eyes on in the near term.
Five key factors suggest cryptocurrencies may continue their 2024 momentum and see positive performance in 2025.
Bond markets generally performed well in February, although there were varying outcomes across different regions. Read our latest thoughts on how fixed income markets fared during the month and what we think you should be looking out for in the near term.
For complete information on risks, refer to the legal documents. The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.
Value fluctuation: The value of investments, and any income from them, will fluctuate. This may partly be the result of changes in exchange rates. Investors may not get back the full amount invested.
Invesco MSCI Europe Equal Weight UCITS ETF: The value of equities and equity-related securities can be affected by a number of factors including the activities and results of the issuer and general and regional economic and market conditions. This may result in fluctuations in the value of the Fund. The Fund may be exposed to the risk of the borrower defaulting on its obligation to return the securities at the end of the loan period and of being unable to sell the collateral provided to it if the borrower defaults.
Invesco Physical Gold ETC: Instruments providing exposure to commodities are generally considered to be high risk which means there is a greater risk of large fluctuations in the value of the instrument. If the issuer cannot pay the specified return, the proceeds from the sale of the precious metal will be used to repay investors. Investors will have no claim on the other assets of the issuer.
Invesco AAA CLO UCITS ETFs: The creditworthiness of the debt the Fund is exposed to may weaken and result in fluctuations in the value of the Fund. There is no guarantee the issuers of debt will repay the interest and capital on the redemption date. The risk is higher when the Fund is exposed to high yield debt securities. It may be difficult for the Fund to buy or sell certain instruments in stressed market conditions. Consequently, the price obtained when selling such instruments may be lower than under normal market conditions. Highly rated tranches of CLO Debt Securities may be downgraded, and in stressed market environments even highly rated tranches of CLO Debt Securities may experience losses due to defaults in the underlying loan collateral, the disappearance of the subordinated/equity tranches, market anticipation of defaults, as well as negative market sentiment with respect to CLO securities as an asset class.
Data as at 21 April 2025 unless otherwise stated.
This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication.
Views and opinions are based on current market conditions and are subject to change. For information on our funds and the relevant risks, refer to the Key Information Documents/Key Investor Information Documents (local languages) and Prospectus (English, French, German), and the financial reports, available from www.invesco.eu. A summary of investor rights is available in English from www.invescomanagementcompany.ie. The management company may terminate marketing arrangements.
UCITS ETF’s units / shares purchased on the secondary market cannot usually be sold directly back to UCITS ETF. Investors must buy and sell units / shares on a secondary market with the assistance of an intermediary (e.g. a stockbroker) and may incur fees for doing so. In addition, investors may pay more than the current net asset value when buying units / shares and may receive less than the current net asset value when selling them. For the full objectives and investment policy please consult the current prospectus.
EMEA4410551/2025
