Exchange-traded funds (ETFs) and money market funds (MMFs) saw unprecedented growth in 2024, according to the European Fund and Asset Management Association (Efama), an industry association representing investment managers in Europe. In its report released on 26 February 2025, Efama stated that net ETF sales soared to €261bn, far surpassing the previous record of €169bn in 2023, while MMFs attracted an all-time high of €223bn.
Efama’s senior director for economics and research, Bernard Delbecque, attributed the rebound in equity undertakings for collective investment in transferable securities (Ucits) inflows to strong stock market performance. He noted that bond Ucits continued to see sustained demand as interest rates declined, while multi-asset Ucits experienced a second consecutive year of net outflows.
Record fund assets
Total net inflows into Ucits and alternative investment funds (AIFs) reached €665bn in 2024, a sharp increase from €237bn in 2023. This growth contributed to a 13.2% rise in the net assets of European investment funds, which reached a record €23.5trn, Efama reported.
Ucits recorded net sales of €618bn, more than tripling from €183bn in 2023. Equity Ucits saw net sales jump to €141bn, from just €5bn the previous year, driven largely by record inflows into equity ETFs, which attracted €192bn. In contrast, non-ETF equity funds faced net outflows of €51bn, highlighting investors’ preference for ETFs when gaining equity exposure.
Rate cuts
Bond Ucits saw strong inflows as several major central banks cut interest rates in 2024, with markets anticipating further easing. Net inflows reached €275bn, nearly doubling the €144bn recorded in 2023. Unlike equity Ucits, non-ETF bond Ucits accounted for the majority of inflows, attracting €223bn, while bond ETFs saw net sales of €52bn.
Multi-asset Ucits recorded net outflows of €43bn last year, following redemptions of €120bn in 2023. Efama suggested this shift reflected investors reallocating from multi-asset Ucits to bond Ucits, as higher interest rates improved the risk-return trade-off in favour of bond funds.
MMFs, ETFs and AIFs
Money market funds recorded net inflows of €223bn, driven by an inverted yield curve that made short-term assets more attractive. Efama also noted that investors used MMFs as a cash alternative, maintaining a cautious approach in uncertain market conditions.
ETFs set a new record in 2024, with net sales reaching €261bn, far exceeding the previous high of €169bn in 2023. Efama’s report highlighted that ETFs are increasingly the preferred investment vehicle for investors seeking exposure to US and global stock markets.
Alternative investment funds recorded net sales of €47bn, slightly below the €54bn seen in 2023. Bond AIFs led inflows with €39bn, followed by multi-asset AIFs with €37bn. However, equity AIFs experienced net outflows of €29bn as Dutch and Danish pension funds continued transitioning from AIF structures to segregated mandates.