In Q3 2025, active funds saw more inflows than passive funds, a first since 2021. European funds benefited from regional shifts, gaining EUR 165 billion in Q3, with a total of EUR 452 billion year-to-date. Investors favored active fixed income over passive options. Precious metal funds also saw increased flows due to macroeconomic uncertainty.

Investors pivoted from US to European equities in Q3, but at a slower rate. Europe large-cap blend equity funds attracted EUR 6.6 billion, while US large-cap funds had outflows of EUR 6.5 billion. Equity funds overall only gained EUR 30 billion in Q3, the lowest quarterly figure since 2023, as investors avoided risky assets.

Global flexible-bond funds, especially USD-hedged, gained investor attention in Q3. USD-hedged global flexible bond funds received EUR 16.1 billion in flows, while non-hedged funds gained EUR 6.4 billion. This shift towards active fixed income strategies reflects investor preference for flexibility in bond markets amidst economic challenges and geopolitical uncertainties.

The mix of macroeconomic uncertainty and geopolitical tensions led investors to seek safe-haven assets like gold in Q3. Commodities saw EUR 10 billion in flows, with EUR 8.9 billion going into precious metal funds. The EUR 17 billion in flows for precious metals year-to-date is on track to set an annual record.

Thematic funds saw EUR 21 billion in outflows in Q3, marking 10 consecutive quarters of outflows totaling EUR 106 billion over three years. However, security-themed funds bucked the trend with EUR 1.3 billion in inflows, driven by geopolitical tensions. WisdomTree Europe Defence ETF led with EUR 1.1 billion gathered in Q3.

Read more at Morningstar: European Fund Flows: A Sign of Life From Actively-Managed Funds