-- ETF market continues to grow with solid inflows
- -European focused equity ETFs under pressure – caution rather than capitulation
- Fixed income ETFs gain importance as portfolio stabilisers

London, 3 June 2026: The European UCITS ETF market* continued to see solid net inflows in May, but the composition of those flows shifted noticeably across asset classes. At USD 43.6 billion, inflows were well above both short- and medium-term averages. At the same time, momentum in equity ETFs weakened, while fixed income ETFs saw a marked increase in demand.

“The latest ETF flow data suggests that investors are positioning themselves more selectively,” says Stefan Kuhn, Head of ETF & Index Distribution, Europe at Fidelity International. “While inflows remain strong, investors are more reactive to the macroeconomic backdrop. Higher energy prices and inflation concerns are leading to a more cautious view on Europe, while bonds are regaining their appeal.”

However, the picture is less clear-cut than the headline numbers might suggest. “Geopolitical uncertainty in the Gulf is weighing on risk appetite for European focused ETFs. That said, the region is coming from a high base. Over three- and twelve-month horizons, Europe still attracted more inflows than the US – despite two relatively subdued months recently,” Kuhn adds.

Bonds: the return of portfolio stabilisers

In fixed income, the recent trend continued. Government bonds remained in demand, while interest in corporate bonds eased. “Investors are increasingly looking to stabilise their portfolios,” says Kuhn. “Government bond ETFs continue to serve that role. At the same time, risk has not disappeared – it’s simply being taken more selectively.”