Global ETF Flows Surge 25% YoY to $900B in H1 2025: State Street

Global ETF flows reached $900B in H1 2025, a 25% increase YoY, with megatrends identified by State Street gaining momentum. The firm attributed the growth to investor appetite for sustainable and thematic ETFs, as well as continued demand for fixed income and equity products. State Street noted that the first half of 2025 saw strong inflows across regions, with the US, Europe, and Asia-Pacific driving the growth.

Global ETF flows reached a record $900 billion in the first half of 2025, marking a 25% increase year-over-year (YoY), according to State Street [1]. The firm attributed this growth to investor appetite for sustainable and thematic ETFs, as well as continued demand for fixed income and equity products.

State Street's 2025 Global ETF Megatrends Midyear Review highlighted several key trends. Active ETFs now account for 39% of U.S. ETF inflows, exceeding the firm's earlier prediction of more than 30% [1]. Global active ETF inflows reached $267 billion in H1 2025, a 73% increase from H1 2024 [1]. Retail investors directed $82 billion into the lowest-cost S&P 500 ETFs [1].

The trend of strong inflows was not limited to the U.S. European investors have put more money into local stock index-trackers so far in 2025 than in any full-year on record, with demand for defence funds booming [2]. By the end of July, investors had ploughed a net 39.4 billion euros ($46.2 billion) into European-focused ETFs, topping every full-year tally since 2008 [2]. In contrast, U.S.-focused ETFs attracted 12.5 billion euros of net new money this year, down 40% on the same period in 2024 [2].

Global equity funds have also gained ground this year, with net inflows into European-domiciled products up 40% to 47.3 billion euros [2]. Meanwhile, UK-focused ETFs have continued to struggle, suffering 1.2 billion euros of net outflows after a small inflow last year [2].

Investors in the region have also backed defence-themed ETFs in huge numbers, as European countries race to rebuild their militaries. Europe-based security ETFs have pulled in 7.6 billion euros of net inflows so far this year, more than three times the next biggest ETF category, artificial intelligence [2].

The trend towards picking local stocks has been visible across the biggest investment houses. U.S. investment giant BlackRock, France’s Amundi, Deutsche Bank’s DWS, and Switzerland’s UBS have all seen strong local inflows, according to Morningstar data [2].

While U.S. stocks have rebounded to record highs after an initial sell-off following Trump’s ’Liberation Day’ trade tariffs on April 2, net inflows into European-focused ETFs have topped U.S.-focused funds every month this year except in January [2].

Frank Koudelka, global head of ETF Solutions at State Street, commented, "We’re seeing synchronized momentum across continents, with clients leveraging our scale, technology, and expertise to bring new strategies to market faster than ever before" [1].

References:
[1] https://seekingalpha.com/news/4484517-global-etf-flows-jump-25-yy-to-900b-in-h1-2025-state-street-says
[2] https://www.investing.com/news/stock-market-news/europeans-pile-into-local-etfs-at-record-rate-at-expense-of-us-stocks-4187754