U.S. equity ETFs saw outflows of €1.44 billion in February among European investors, according to LSEG Lipper.
Investors in Europe are dumping their U.S. ETFs in favor of money market and global funds and ETFs, according to new data from LSEG Lipper.
In February, LSEG Lipper tracked US equity ETFs outflows of €1.44 billion in February. That’s compared to overall inflows of €33.7 billion for ETFs in Europe last month and €62.7 billion through the first two months.
This comes after a record-setting year in 2024 when ETFs in Europe saw €256.4 billion in inflows. U.S. equities generated €100.3 billion in inflows with the bulk of the U.S. fund inflows piled into U.S. ETFs. In fact, U.S. equity ETFs saw more inflows than any other asset class last year, LSEG Lipper found.
“Equity US flows for February are anaemic relative to prior months. What’s more, Equity US ETF flows are negative for the month. Given the importance of the vehicle for the asset class as a whole—much more so than in bonds, where its market penetration lags, if growing—this may be a canary in the coal mine moment,” Dewi John, head of Lipper EMEA Research, wrote in the LSEG Lipper report.
It follows a similar trend among U.S. investors, who doubled the amount of inflows into international ETFs in February, while inflows into U.S. ETFs slowed.
U.S. Money Market Funds and Global Equities Attract Attention
Instead, European investors are favoring the U.S. money market and European funds and ETFs, which both saw strong inflows in February.
“Faced with tumbling US stocks, softening economic data in the country, and an increase in global uncertainty around tariffs and geopolitics, European investors chose to plough €22.99bn into Money Market USD funds in February,” John wrote.
Also, European equity funds saw inflows of €1.49 billion in February. Further, Equity Global funds generated €23.76 billion in inflows over the first two months of the year, with ETF inflows accounting for €15.04 billion of that total, according to LSEG Lipper.
“With US equity demand softening and bond inflows remaining strong, European investors seem to be reassessing risk exposures as they position portfolios for the months ahead,” John said. “The coming quarters will reveal whether these shifts are temporary or signal a longer-term recalibration in global asset allocation.”