Equity Europe and Eurozone ETFs See Strong Uptick in Investor Interest

The European ETF industry enjoyed healthy estimated net inflows (+€27.2 bn) over the course of July. That said, these inflows were above the rolling 12-month average (€25.9 bn). These inflows drove the overall inflows in ETFs up to €179.7 bn for the year 2025 so far.

The inflows in the European ETF industry for July were once again driven by equity ETFs (+€22.0 bn), followed by bond ETFs (+€3.4 bn), money market ETFs (+€1.0 bn), alternatives ETFs (+€0.4 bn), commodities ETFs (+€0.3 bn), and mixed-assets ETFs (+€0.04 bn). This flow pattern may indicate that European investors are further in risk-on mode.

Equities are European ETF Investors’ Darlings!

Given the overall fund flow trend in the European ETF industry, it was not surprising that Equity Global (+€5.9 bn) was the best-selling Lipper global classification for July. It was followed by Equity U.S. (+€3.5 bn) and Equity Emerging Markets Global (+€2.7 bn).

Generally speaking, it is not surprising that Equity U.S. is back among the top spots on the table of the 10 best-selling Lipper classifications given its status as core market and the strong recovery of the market after the turmoil in April 2025.

Nevertheless, it looks like European investors want to take more control around the exposure to U.S. equities since Equity Global ex-U.S. (+€1.6 bn), a classification which is not always on the table of the 10 best-selling classifications, was the fifth best-selling Lipper classification for the month.

Graph 1: European ETF Industry , Ten Best- and Worst-Lipper Global Classifications by Estimated Net Sales, July 2025 (EUR Billions)

Source: LSEG Lipper

The trend toward investing in Europe has continued, as Equity Europe (+€1.9 bn) and Equity Eurozone (+€1.2 bn) are taking spots on the table of the 10 best-selling Lipper classifications for the month. These two classifications faced outflows until the end of 2024, but the tide has changed ever since and a trend toward investing in European equities was established over the course of the first half of 2025. That said, Equity Europe Small & Mid-Cap (+€0.5 bn), was the thirteenth best-selling Lipper classification, which means European investors not only buy large caps to extend their positions in European equities. In addition, Equity Eurozone Small & Mid-Caps enjoyed inflows of €0.1 bn.

On the other side of the table, Equity Japan (-€0.5 bn) was the equity classification with the highest estimated outflows. It was bettered by Equity Switzerland (-€0.4 bn), Equity U.S. Small & Mid-Cap (-€0.1 bn), Equity France (-€0.1 bn), and Equity Australia (-€0.1 bn).

Is the Defence Theme Still Visible?

The trend toward investing in stocks which are potentially benefitting from the increasing defence budgets around the world is still intact. Equity Sector Industrials, the classification in which defence-themed ETFs are hosted, enjoyed inflows of €1.1 bn. These inflows were clearly driven by defence-themed ETFs, as these ETFs enjoyed inflows of €0.9 bn.

Is Gold Shining in the ETF Flows?

Since the price of gold has strongly moved upward over the course of the year, it is surprising that the fund flow pattern didn’t keep up with the performance. That said, ETFs in the Lipper classification Commodity Precious Metals enjoyed inflows of €0.3 bn despite the volatile and slightly negative performance of gold over the course of the month.

What about Money Market ETFs?

The flows into money market products in the European ETF industry have further normalized over the course of July. That said, it might be somewhat surprising to see Money Market USD (+€0.8 bn) on the list of the top selling Lipper classifications.

In addition to the weakening , one needs to bear in mind that money market products are in general not considered as a core asset type within the European ETF industry. Therefore, money market classifications are not expected to be on this list. In line with the flows in Money Market USD, no major money market classification faced outflows for the month—Money Market EUR (+€0.2 bn), Money Market GBP (+€0.005 bn), and Money Market CHF (€0.0 bn).

Are Bond ETFs out of Favor?

Given the overall fund flow trend in the European ETF industry, it was not surprising to see only one bond classification—Bond EUR High Yield (+€1.0 bn)—on the list of the 10 best-selling Lipper classifications. That said, it is surprising to see a high yield classification enjoying more estimated net inflows than any other bond classification given the risk profile of high yield bonds.

More generally speaking, it looks like European investors are also in risk-on mode when it comes to bonds since the second best-selling bond classification is Bond EUR Corporates (+€0.8 bn). These two classifications are followed by Bond USD Inflation Linked (+€0.5 bn), Bond Global Corporates EUR (+€0.5 bn), and Bond Global Short Term (+€0.5 bn). This means, there is no plain-vanilla bond classification at the top of list.

Instead, some of the major bond categories can be found at the bottom of the table. Bond EMU Government (-€1.4 bn) was the classification with the highest estimated outflows overall for the month. From a bond perspective it was bettered by Bond USD Government (-€0.4 bn), Bond Global USD (-€0.2 bn), Bond CNY (-€0.2 bn), and Bond EUR (-€0.2 bn).

Since these outflows can’t be considered as significant, given the overall size of the markets, it might be a fair assumption that European investors are trimming their bond positions as central banks around the globe try to find their ways to work through the different economic scenarios in the main economies around the globe.

It might also be a topic of interest that ETFs investing in collateralized loan obligations (CLOs) only gathered estimated inflows of €0.1 bn over the course of the month despite investors being in risk-on mode and the high number of headlines around these products, as well as an increasing number of ETFs investing in CLOs.