Morningstar has published its review of the European open-end and ETF market for Q1 2026.
European funds gathered €184.2 billion in the first quarter of 2026 (excluding money market funds), up from €154.3 billion in Q4 2025.
Giovanni Cafaro, Analyst, Manager Research at Morningstar, commented:
“The first quarter paints a picture of investors remaining engaged with markets, but more selective in how and when they deploy capital. While the quarter started strongly, March saw €18.7 billion of outflows as uncertainty around geopolitics and inflation risks prompted many investors to pause allocations and stay on the sidelines.
“Across asset classes, we continue to see a familiar pattern: passive strategies dominating equity allocations, while active management remains the preferred route in fixed income, where flexibility is seen as crucial in navigating volatile conditions.”
Key findings from the report:
- Equity and fixed income both attracted inflows in Q1. Equity funds gathered €95.3 billion, more than double Q4 2025 levels, while fixed income funds took in €62.7 billion, down modestly from the prior quarter.
- Passive funds accounted for around 65% of all flows in the quarter, pulling in €120 billion, including €108 billion into equity strategies.
- Active equity funds remained under pressure, shedding €12.7 billion, while active funds were the clear beneficiaries in bonds, gathering €49 billion as investors favoured hands‑on management.
- Growth‑focused equity strategies – global, US and European – continued to fall out of favour in Q1, losing €23.3 billion in aggregate.
- Global and European equity exposure gained ground as investors continued to diversify away from US‑centric allocations, with global and European large‑cap blend strategies attracting €58.6 billion combined.
- Emerging‑market funds extended their recovery, with €20.1 billion of inflows over the quarter, although momentum slowed sharply in March amid worries over oil prices and supply‑chain disruption.
- Thematic funds shed €4.1 billion, continuing a prolonged period of outflows, with broad technology, digital economy and multi‑technology strategies among the largest drags.
- BlackRock topped the flow league table, attracting €34 billion, driven largely by its iShares ETF franchise. Outflows were mostly an active equity story, with Morgan Stanley leading the redemptions.
- Assets in European open‑ended funds and ETFs stood at just over €14 trillion at the end of Q1, down from February’s peak as market losses linked to geopolitical shock fed through to valuations.
A full copy of the report can be found here.
