Long-term undertakings for collective investment in transferable securities (Ucits) funds across the EU experienced negative net sales in April 2025 following US president Donald Trump’s announcement of reciprocal tariffs on 2 April, which imposed 20% duties on EU products and 25% on vehicles manufactured outside the US. Targeting over 100 countries, these measures intensified global trade tensions, unsettling investors and triggering a notable shift in asset allocation.

Thomas Tilley, senior economist at European Fund and Asset Management Association, in a press release on 1 July 2025, said: “Net sales of long-term Ucits turned negative in April, for the first time since October 2023, as the escalating trade turmoil prompted investors to move out of bond Ucits and into money market funds. Equity Ucits did continue to see positive net sales, driven by sustained net inflows into exchange-traded funds. However, investors disinvested from US-focussed ETFs, while investments in European and global ETFs remained resilient.”

Flight to liquidity

Overall, Ucits and alternative investment funds (AIFs) combined recorded net inflows of €58bn in April, a sharp increase from €15bn in March. Ucits alone posted €47bn net inflows, up from €14bn the previous month. However, long-term Ucits, excluding money market funds, suffered net outflows of €6bn, a reversal from €34bn inflows in March.

Within long-term Ucits, ETF Ucits net inflows nearly halved to €16bn from €31bn, signalling investor caution. Equity funds saw modest net inflows of €16bn, down slightly from €17bn in March. Bond funds faced substantial redemptions, with net outflows of €21bn, flipping from €7bn inflows in March. Multi-asset funds also saw net outflows of €2bn, compared to inflows of €2bn in the prior month.

In stark contrast, Ucits money market funds experienced robust net inflows of €53bn, rebounding sharply from €20bn net outflows in March, reflecting a pronounced move toward liquidity and safety amid market uncertainty.

AIFs continued to attract capital, recording €11bn net inflows in April, up from €1bn in March. Despite market volatility, this growth underscores investors’ appetite for diversification through alternative strategies.

Overall, net assets of Ucits and AIFs fell by 1.5% in April to €22.9trn, signalling the market impact of heightened trade tensions and the resulting volatility.