Global ETF Flows in May Slip as Fixed Income Sets a Record

Global ETF flows in May fell to $199.4 billion, down from $212.4 billion in April, according to analysis from BlackRock. The headline dip masks a sharp divergence underneath: fixed income broke records at the same time equity inflows hit their lowest reading since January.

What Global ETF Flows in May Revealed About Risk Appetite

Equity exchange-traded product (ETP) inflows dropped to $106.4 billion in May, the weakest monthly figure for that category since January. The rotation was stark: investors pulled back from growth bets with one hand while piling into bonds with the other. Fixed-income ETPs gathered $87.7 billion, BlackRock’s data shows, the largest single month of inflows on record for that category.

The regional picture reinforces the cautious tone. Of all regionally focused ETPs, only those targeting the US attracted positive flows, and even those moderated to $103.3 billion from $121.9 billion in April. Emerging market equity ETPs recorded outflows of $40.4 billion, the steepest negative reading of any region.

European data from Morningstar pointed in the same direction. European ETF and exchange-traded commodity (ETC) flows eased to €38.0 billion in May from €40.2 billion in April. Jose Garcia-Zarate, senior principal at Morningstar, framed the month as a normalisation rather than a warning: ‘Investor demand for ETFs remained resilient in May, even as flows moderated slightly from April’s peak. Equities continued to dominate allocations, supported by strong market performance and sustained interest in US exposure.’

The moderation in May sits against an accelerating structural backdrop. European ETFs and ETCs set a full-year record of €247 billion in 2024, breaking the previous record of €159 billion set in 2021. Full-year 2025 flows have since reached €337.5 billion, per Morningstar’s 2025 review, suggesting that individual months of modest softening carry less structural weight than the run-rate implies. The first quarter of 2025 alone delivered €91 billion in European ETF flows, a quarterly record.

Fixed Income Breaks Records While Equities Lose Ground

Within global ETF flows in May, sector dispersion among equities was pronounced. Technology attracted $14.4 billion, the only sector to gather flows of any scale. Industrials and energy followed at a distance.

The concentration in technology reflects, in part, investor positioning ahead of a potential SpaceX IPO. Garcia-Zarate flagged this directly, noting that the VanEck Space Innovators UCITS ETF (LON:JEDG) was ‘among the top 10 flow-gathering ETFs in May.’ The fund tracks the MarketVector Global Space Industry Screened Index, which covers the largest and most liquid companies in the global space industry. Anticipated listings with a space-economy angle have repeatedly catalysed short-term inflows into thematic vehicles, and the SpaceX dynamic follows that pattern.

Europe and the SpaceX Effect

The broader active ETF segment is also worth watching alongside these passive flow figures. In EMEA, active ETFs represent 2.5% of total ETF AUM at about $69 billion, with their share of total ETF AUM having doubled since 2021, according to a BlackRock analysis of the active ETF market. Overall active ETF AUM was up 33% from year-end 2024 to the first half of 2025. That structural growth in active products runs in parallel with the passive inflow story: both are capturing wallet share from traditional open-end funds.

The thesis for European ETF demand has not shifted materially on one month of moderation. The next test is whether the record fixed-income inflow in May reflects a durable allocation shift or a tactical hedge that unwinds if risk appetite recovers into the summer. Equity flows into non-US markets, particularly emerging markets given the $40.4 billion outflow, will indicate which way the rotation is settling.