While the ETF on cryptocurrencies attract American investors, those focused on the defense are essential in Europe, says Anne-Valère Amo de Trackinsight.
Reference platform for the analysis and selection of ETFs, Trackinsight – whose majority shareholder has been Kepler Cheuvreux since last year, has been booking a detailed analysis of the world’s eTF flows on more than 12,500 exhibitions. Some strengths of trends 2025 to June 30 with Anne-Valère Amo, head of ETF selection and strategies who takes up the words of Benoît Mandelbrot, “My life appeared to me as a succession of events and accidents. However, when I look back, I see a diagram there. ”1 A reflection that also applies to the analysis of world and world flows on the first half of 2025.
Can you clarify what the data you have compiled?
These are net flows (sales between entries and outputs) in cumulative dollars since the start of the year on June 30, classified between European investors and American investors.
What are your first general conclusions?
The overall flows are positive both from American investors (570’328 billion dollars) and Européens (179,180 billion dollars) even if the assets under management of the latter represent only a quarter of those of their overseas counterparts. Bond ETF represents just under 30% of the total and the equity ETF around 57%.
“Inputing flows to sovereign bonds are significant, representing 43% of total bond flows in the United States and 50% in Europe.”
What significant trends do you observe in the bond ethors segment?
Within the bond universe, there is an appetite for security and liquidity. ETF Cash and Cash+ count for 24% of the total bond flows, 34% among European investors where the taste of the risk seems significantly lower. Inputing flows to sovereign bonds are significant, representing 43% of total bond flows in the United States and 50% in Europe. The interest, less marked, for business obligations (investment grade and high yield) is nevertheless translated by positive net flows on both sides of the Atlantic, representing 17% of total bond flows in the United States and 24% in Europe.
What about the Actions ETF?
Within the world of actions, there is a preference for domestic markets. Americans invest in the United States (68% of flows), Europeans in Europe (44% of flows). The enthusiasm of European investors for the American market seems to have short -lived (only 9% of flows). On the other hand, investors of the old continent diversify more and are more likely to turn to emerging markets than their counterparts in the United States.
What do you distinguish in the sectoral distribution?
For the first time in a long time, we have observed a tech disenchantment. Decollet, certainly modest but clear, is marked both in Europe and in the United States. Europeans turn to more defensive sectors, such as health and communication services. On both sides, there is a discretion of discretionary consumption (which, as a reminder, includes the automotive industry and in particular Tesla). The United States marks a strong disengagement from real estate ETFs, probably in anticipation of a drop in guiding rates because the reits largely dominate the American part of the sector and tend to pay generous dividends when the rates are high.
A word on raw materials?
Precious metals represent almost all of the flows of this asset class, with a pronounced preference for gold which counts for 72% of net flows on precious metals in Europe and 95% in the United States.
“It is clear that American investors are not very interested in ESG funds with a global clear decollect of 166 million.”
Let’s move on to thematic ETFs.
In the United States, the big winners are the ETF on cryptocurrencies which, with more than 15 billion net flows, count for more than half of the flows invested in the thematic ETF in 2025. This phenomenon is much less sensitive in Europe, where flows to cryptoactives represent only 10% of thematic flows. In Europe, it is the defense -based ETFs won the palm, concentrating 82% of thematic flows by adding global defense and European defense.
Can you tell us more about defense?
The theme of defense was traditionally integrated into the industrial sector. Today he finds himself dispersed in other sectors such as communication (satellites), tech (cybersecurity), energy and health. Defense funds are very heterogeneous in terms of performance, number of positions and management fees. However, and without much surprise, the data since 2019 show that the appetite for defense varies according to the world crises: negative net flows during the Cavid-19 pandemic, then a reversal marked with the war in Ukraine which changed the directionality of flows. Philippe Ferreira, deputy manager Economy & Cross-Asset strategy at Kepler Cheuvreux, remains positive in the defense sector, while calling for selectivity in the face of highly dispersed performance and valuations already amplified by the arrival of new investors, in particular certain ETFs which do not always distinguish the real growth potential. This dispersion also appears in terms of funds, where exposure to European defense dominates in terms of performance and valuation, the theme remaining generally more expensive than the MSCI indices of the main markets.
What about ESG funds?
It is clear that American investors are not very interested in it with a global clear decollect of 166 million. Europeans continue to invest in it (+13 billion) but leave the pure and hard funds (ESG thematic, best-in-class) to prefer exclusion or integration strategies. It must be said that the reclassification of a large number of funds from article 9 to article 8, which occurred in the second half of 2022 in the context of European SFDR regulations, blurred the benchmarks and strengthened the preference of investors for more flexible ESG approaches.
Defense and ESG, isn’t that incompatible?
SFDR regulations do not ban defense as such, except for controversial weapons. However, in the absence of a clear and harmonized definition, as well as consensual exclusion lists, exposure to these weapons varies many from one fund to another, and even more from one country to another. There is indeed no homogeneity between international treaties: white phosphorus or submunition bombs are subject to partial agreements, while depleted uranium is not even covered by treaties. Before positioning himself, the investor must therefore clarify his ethical convictions and assess the potential reputational risk to which he could be exposed.
1 Benoît Mandelbrot, The (Mis)Behavior of Markets: A Fractal View of Risk, Ruin, and Reward, 2004
