Europe’s exchange-traded funds (ETFs) welcomed record inflows during the opening three months of the year, Invesco’s figures show.
The $93bn (£69.9bn) invested in the market in the first quarter beat the previous $91bn (£68.1bn) record set three months earlier.
With equity returns broadly flat, a strong performance in gold and gains in fixed income pushed the assets under management in Europe’s ETF market to $2.38trn (£178.4trn) at the end of March.
This was two days before the US announced its global import tariffs. And despite market uncertainty, 80% of inflows favoured equities, which was consistent with 2024’s average.
However, investors were turning away from the US in favour of Europe. Indeed, a record $19.4bn (£14.5bn) flowed into European-exposed ETFs, across all categories – almost a fifth of the first quarter’s total.
While most ($11.4bn) was attracted to broad European equity products, $5bn was invested in German equities.
Meanwhile, US equities saw $2.2bn (£1.6bn) of outflows in March, taking the total for the quarter to $4.5bn (£3.3bn). This was less than 10% of the record invested during the previous three months.
Gold was the big winner during the quarter, while the returns from equities were largely flat.
Flows into gold exchange-traded products returned four months ago following an absence and have been positive ever since. Indeed, it was the best performing asset in the first quarter returning 19% as investors flocked to the safe haven asset as economic uncertainty increased.
Gary Buxton, head of EMEA ETFs at Invesco, said valuable insights can be drawn from how investors positioned themselves before the tariff-induced market gyrations.
“The valuation case for European equities remains supportive, and growing concerns over concentration risk amongst global and US indices could prompt investors to continue looking to Europe to diversify.
“Similarly, so long as uncertainty persists, the case for gold will remain strong,” he added. “Gold has demonstrated low correlation with equities and other risk assets, and also tends to hold up well during times of increased equity market volatility (in risk-off conditions) and uncertainty.”
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