Article

Record quarter sees ETF investors shift their focus towards Europe

25 April 2025
Invesco
Overview of a roundabout
Key takeaways
1

European equity ETFs second only to Global equities in net new assets

2

Gold the best-performing asset in Q1 with 19% return

3

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.  

Equity Flows and Shifts

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.   

Fixed Income and Commodity Flows

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’s Performance

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.

European ETF Snapshot

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. 

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ETF
Invesco MSCI Europe Equal Weight UCITS ETF

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ETC
Invesco Physical Gold ETC

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ETF
Invesco AAA CLO UCITS ETFs

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