Europe Fund Flows: What's Happening in 2026?

The European exchange-traded fund and exchange-traded commodities market gathered flows of EUR 36.9 billion in June 2026, down from EUR 38.3 billion in May. Flows totaled EUR 219 billion for the year to date—an increase of 38.5% compared with the first half of 2025.   

Here, we’ll uncover trends in fund flows across asset classes and ETF providers. 

This article is adapted from the recent report published by Morningstar Manager Research. The Morningstar European Open-End and ETF Flows report is available to download for free. 

European open-end funds and ETFs, excluding money market funds, gathered EUR 188 billion in the second quarter of 2026. While flows remained robust, they slipped from nearly EUR 203 billion in the first quarter as escalating tensions in the Middle East weighed on investor risk appetite. Despite the softer flow picture, investors continued to put capital to work across a range of asset classes rather than retreating to the sidelines completely.  

Here's how second-quarter flows performed by broad asset class. 

Source: Morningstar Direct. Data as of June 30, 2026.

Fixed-income funds displaced equity as the leading asset class in the second quarter, gathering EUR 84.1 billion in net flows, up from EUR 75.7 billion in the first quarter. Equity inflows eased to EUR 72.4 billion after leading the market in the previous quarter. Investors appeared to favor the relative stability of bonds amid heightened geopolitical uncertainty and inflation concerns.  

Allocation funds notched a third consecutive quarter around the EUR 20 billion mark. Meanwhile, real-assets funds returned to positive territory with EUR 3.7 billion in inflows, reversing nearly all of the outflows recorded during the prior two quarters, as investors sought exposure to commodities and other inflation-hedging assets.  

Alternative strategies remained in favor as well, gathering EUR 6.4 billion and extending their streak of positive quarterly flows to six consecutive quarters.

The passive-investing story continues to be largely driven by equities. Passive equity funds gathered EUR 89.9 billion in the second quarter, while active equity funds suffered EUR 17.8 billion of outflows. Even so, active equity ETFs remained an area of growth, attracting EUR 7.5 billion and partially offsetting redemptions from traditional open-end equity funds.  

Fixed income continued to tell a different story. Active bond funds attracted EUR 47.5 billion of inflows, compared with EUR 36.5 billion for passive fixed income strategies. Although passive fixed-income products remain popular, investors continue to demonstrate a preference for active management when seeking fixed income market exposure.

After European investors diversified away from US equities earlier this year amid sticky inflation and valuation concerns, investors returned in the second quarter. Global large-cap blend and US large-cap blend categories collectively attracted EUR 88.2 billion, more than double the flows gathered during the first quarter. Strong corporate earnings and renewed enthusiasm surrounding artificial intelligence helped drive investor demand.  

Technology-focused funds experienced a dramatic turnaround. After suffering outflows during the first quarter, the category attracted EUR 11.7 billion in the second quarter, marking its strongest quarter since the first quarter of 2021. Advances in AI and resilient earnings from technology companies (despite increased spending concerns) helped restore investor confidence in technology.  

Infrastructure funds also benefited from investor interest in the AI ecosystem, gathering EUR 3.8 billion as spending on data centers, electricity networks, and related projects continued to accelerate.

Source: Morningstar Direct. Data as of June 30, 2026. 

Source: Morningstar Direct. Data as of June 30, 2026. 

Technology themes were the primary driver of the turnaround. Artificial Intelligence and Big Data strategies attracted EUR 1.9 billion during the quarter.. The rebound in technology-themed funds accounted for much of the broader recovery across thematic investing.  

Space-focused funds also enjoyed strong demand, extending a seventh consecutive quarter of inflows and gathering EUR 1.3 billion. Investor interest in the space industry accelerated during the quarter as new investment products entered the market and attention remained focused on developments across the sector.  

Not all themes participated in the recovery. Defense funds, one of the strongest themes throughout 2025, recorded their first quarter of net outflows in more than two years. Broad thematic strategies also remained under pressure, extending a multi-year streak of outflows, while social-themed funds returned to negative territory.  

Take the pulse of the market with asset flows data in Morningstar Direct. The application offers a comprehensive, timely picture of the total net assets and estimated net flows across multiple geographical markets as well as organic growth rates for specific markets. 

You can monitor broad investor trends, perform competitive analysis, develop new products and market managed investment products.