Morningstar reported European ETF & ETC asset flows as well as leaders in terms of assets under management.   Photo: Shutterstock, Morningstar; Montage: Maison Moderne

Morningstar reported European ETF & ETC asset flows as well as leaders in terms of assets under management.   Photo: Shutterstock, Morningstar; Montage: Maison Moderne

European ETF flows were boosted by investors’ appetite for US equities and by active ETFs to a smaller degree. The industry continues to be dominated by Ishares and JP Morgan for passive and active exchange-traded funds, respectively.

Paperjam reported earlier this week on , a research and consulting firm. Not surprisingly, the picture is similar at the European level according to a research note published by Morningstar, a data and research provider, on 17 January 2025. 

It noted that 2024 has seen record flows of €247bn for European exchange-traded fund and exchange-traded commodity industries against €145.4bn in 2023. Ishares came first in the annual flow league table with €84.4bn whereas the second and third, Xtrackers and Amundi came far behind with flows of €36.0bn and €27.5bn, respectively.

Assets under management in ETFs and ETCs reached almost €2.18trn by YE24 an increase of 33% over 2023 (€1.64trn). Similarly, market shares at Ishares dwarfed its competitors at 42.2%. Amundi came second at with a share of 12.4% while Xtrackers arrived third with 10.9%.

Domination of “mainstream US index equity exposure”

Equity ETFs received the lion share of last year’s flows, €197.2bn, with investors showing a “strong preference” for US equity exposure. 70% of all ETF equity flows in Europe went into US large-cap blend and global large-cap blend category ETFs . Bond ETFs have seen a decline in flows which nevertheless reached +€47.4bn in 2024, down from +€57.3bn in 2023 while investors preferred short duration strategies.

ESG strategies: still losing steam

Flows into environmental, social, and governance-focused ETFs declined to €32.4bn in 2024, down €42.8bn a year earlier. Morningstar stated that: “the proportion of total ETF flows into ESG strategies has declined abruptly since 2022.”

Active ETFs: a one-man show

Active ETFs accelerated inflows with €19.1bn in 2024, up from €6.7bn in 2023. They accounted for 7.7% of all flows into ETFs in the year. Assets under management rose to €54.4bn (2.5% of assets invested in ETFs) from €29.6bn in 2023, with JP Morgan strengthening its market share to a stunning 54.6%.

Thematic ETFs moving into negative flow territory

Breaking a positive trend over the last 10 years, thematic ETFs experienced outflows of €1.1bn in 2024 with ETFs tracking the energy transition theme leading the outflows.

Despite widely held positions in so-called “magnificent seven” US stocks across many thematic funds tapping into different themes, Jose Garcia-Zarate, the author of the research report, observed in a written communication with Paperjam that “the performance of these stocks has not been enough to lift the overall performance of thematic funds.”

As per ETF flows data, he also noted that “there has been a significant decline in interest in thematic ETFs over the past three years” with a strong pick-up in outflow in the last two quarters of 2024.

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