HANetf, Europe’s leading white-label UCITS ETF and ETC platform, has released its Exchange-Traded Europe Q1 2025 report, which reveals that assets in European ETPs reached $2.4 trillion in Q1, with ETFs accounting for $2.28 trillion. Core equity ETFs led the flows ($45.70 billion), while fixed income ETFs added $15.19 billion.
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Flows snapshot – Europe ETF assets at $2.28 trillion
Headlines – Flows into U.S.-focused ETPs redirected to Europe amid tariff turmoil
- European ETP market hits new all-time highs: European ETPs are now at $2.4 trillion AUM.
- Flows redirected to Europe-focused ETPs: U.S. market downturns and President Trump’s tariffs have seen Europe-focused ETPs take a greater share of flows than their U.S. counterparts in Q1.
- Core equity ETFs surpass $1tn: Core equity ETFs reached $1.02 trillion in assets, with $45.70 billion net flows in Q1.
- Active and options-based ETFs see strong relative growth: Active ETF AUM grew 11.65% in Q1, and options-based ETF AUM by 54.55%.
- No. European ETP brands continues to rise: In Q1 2025, there were 10 new entrants to the European ETP market and 3 exits, bringing the total number of brands to 131.
- Europe approves semi-transparent ETFs: Active ETFs can now adopt semi-transparent structures in Europe.
Tariff chaos sees flows shift to Europe
Across Q1, we witnessed a significant shift in the direction of flows, from U.S.-focused to Europe-focused ETPs – with the latter seeing more total flows by the end of the quarter.
U.S. markets saw a significant downturn in Q1, driven largely by President Trump’s unpredictable tariffs. European stocks, and ETPs tracking them, therefore saw renewed interest.
March saw the greatest disparity, with $8.95 billion into Europe-focused ETPs, while U.S.-focused ETPs lost $990.92 million.
Active ETFs continue growth
After a 68% AUM increase in 2024, active ETFs have continued to gain popularity in Europe.
In Q1, active ETFs saw $6.39 billion in flows, bringing their total assets to $61.89 billion – a new record.
Semi-transparent active ETFs
Europe has given the green light for semi-transparent active ETFs. The move means active managers would not have to reveal their portfolios on a daily basis, with the view of making it more difficult for anyone to copy them.
Instead, holdings can be published with a one-month delay. The structure has existed in the U.S. since 2019, but now, European active managers can follow suit. The move may encourage more asset managers to make the jump to Europe.
No. European ETP brands continues to rise
Over the past three quarters, the number of European ETP brands has risen from 116 to 131 – an increase of almost 13% in under a year.
While some brands have exited the market for various reasons, there continues to be a net increase in new issuers, demonstrating the health of the European ETP market.
So far this year, HANetf has had around 195 enquiries from asset managers looking to launch products in Europe.
Defence ETFs continue rapid growth
Q1 2025 saw defence ETFs continue the 2024 trend of taking in flows.
The top 5 defence ETF issuers by AUM saw a cumulative $4.16 billion in flows, around 4.5% of total ETF flows in Europe.
This represents a sizeable 5x increase in flows over the previous quarter.
