In April, exchange-traded fund investors kept on buying, piling roughly €16.2 billion into Europe-domiciled ETFs. Even though the headline figure seems encouraging, this is the lowest monthly result in terms of flows since April 2024.
The Morningstar Global Markets Index, a broad gauge of worldwide equities, tumbled 11% during the first 8 days of April as markets digested Donald Trump’s tariffs announcement. Therefore, volatility exploded, and safety was hard to find. Treasuries, gold, and bitcoin also lost value, albeit by varying amounts.
Since then, thanks largely to the 90-day pause on tariffs sought by the Trump administration, international markets have recovered much of their losses during the rest of the month.
At the individual asset class level, ETFs confirm themselves as a favorite tool for stock investors: in April, €14.6 billion target equity strategies, 70.4% of the total inflows. Conversely, fixed-income ETFs experienced net outflows of €33 million, right after €378 million of net redemptions seen in March. These two negative results came after a stunning period of 29 consecutive months of positive net inflows for bond ETFs.
The Big Shift from the US to Europe
Looking at the category level, it appears that European investors are showing signs of souring on US stocks as Trump’s trade wars and concerns about the strength of the US economy continue.
The combined inflows into ETFs in the Europe and eurozone equity categories in April amounted to €7.9 billion. By contrast, US equities categories combined saw €2.3 billion of net outflows last month.
“The ETF flow story in April is really a continuation of moves that had already started at the beginning of the year, as investors understood that policies undertaken by the US administration would impact negatively on growth and, particularly, weaken USD-denominated assets,” says Jose Garcia Zarate, associate director for passive strategies at Morningstar.
“The repatriation of assets into home turf – in this case EUR equities – has thus to be seen as a kind of safe-haven-seeking strategy designed to limit the downside of a high exposure to USD.”
The flight to safety was more pronounced in fixed income than stocks, with investors primarily favoring the safety of EUR government bonds and limiting risk to short-dated maturities and currency hedged investment-grade corporate bond exposure.
“This risk-off scenario is further compounded by the noted outflows of high yield – more vulnerable to an economic downturn – and emerging markets hard-currency (USD mainly) bonds”, says Zarate. “Although volatility diminished in the wake of the announcement of the 90-day pause on tariffs, there remains a great deal of uncertainty that underpins the cautious approach investors are taking.”
WisdomTree Europe Defence ETF Among the Top Gatherers in April
In response to the US pulling back support for Ukraine and President Trump demanding higher NATO contributions, the European Union has unveiled an €800 billion rearmament plan, which has made European defense one of the hottest investment themes of 2025. This haspushed ETF providers to meet the surging demand from investors wanting pure exposure to Europe’s defense sector.
The WisdomTree Europe Defence was the sixth ETF in terms of net inflows in April.
Among the largest outflows in April, we find US equity ETFs, sustainable stock strategies, as well as the Invesco Physical Gold ETC, one of the biggest gold exchange-traded offerings in Europe.
IShares Still the King
IShares remains the largest provider in Europe, with a market share of 41.5%. Amundi, Xtrackers, and Vanguard all saw a mild increase in assets compared with the end of 2024, but their respective market share remained essentially unchanged.
Among major ETF providers, however, those that have organically grown the most are State Street (a 34% organic growth rate in the year to date) and JPMorgan (+50%).
The former has benefited from strong flows into its S&P 500 ETF. Around 60% of the flows for the provider in the year to date have been directed to this product. State Street cut the fee on this ETF from 0.09% to 0.03% in November 2023, and this has paid off handsomely since.
JPMorgan, for its part, is the undisputed leader in the rising segment of active ETFs, with a market share of 54.7%. Its best-seller, the JPM Global Research Enhanced Index Equity Active UCITS ETF JREG, has attracted €1,4 billion so far in 2025.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.
