European Investors Shift Capital Into Local Exchange-Traded Funds
European investors are shifting money into local exchange-traded funds (ETFs) at a record pace as they ditch U.S. stocks and other American investment vehicles.
Market data shows that Europeans have put more money into local Europe-centric ETFs so far in 2025 than in any full-year on record.
Investors put 39.4 billion euros ($46.2 billion U.S.) into European-focused ETFs that are domiciled on the continent as of July 31 this year.
That’s the most placed in European ETFs since the data began to be collected in 2008.
The net inflows in 2025 are up more than three-fold from the total amassed in 2024 and are helping to push Europe’s ETF market to 2.4 trillion euros in assets, according to financial services firm Morningstar (MORN).
In contrast, U.S.-focused ETFs have attracted 12.5 billion euros of new money this year, down 40% from the same period in 2024 and the lowest amount in three years.
U.S. asset manager BlackRock (BLK) and Swiss bank UBS (UBS) have seen strong local inflows into European ETFs, according to Morningstar.
European-focused ETFs have topped U.S.-focused funds among European investors every month this year except January, according to the latest data.
Analysts say European investors are choosing to keep their capital close to home amid a dislike for U.S. President Donald Trump’s trade and tariff policies.
Among European investors, defence-themed ETFs are especially popular as European nations race to build-up their militaries.
Europe-based security ETFs have seen 7.6 billion euros of net inflows this year, Morningstar said, more than three times the next biggest ETF category, which is artificial intelligence (A.I.).
