Europe’s ETF market will experience a historic upswing in 2025: record inflows, growing numbers of private investors and attractive valuations will bring it into the focus of investors.
• European ETFs are at an all-time high
• Germany accounts for a quarter of the European ETF market
• Europe is becoming more of an investor focus
European ETFs with record inflows
The European ETF market will experience a historic upswing in 2025 – especially in Germany, as Morningstar explains. With around 500 billion euros in ETF assets at the middle of the year, German investors now account for almost a quarter of the European ETF market. The growth drivers were primarily equity ETFs, which recorded net inflows of 245.6 billion euros in 2025. Global standard indices such as the MSCI World and European large-cap stocks were also particularly in demand. “Private investors invest heavily in stock ETFs, especially in broadly diversified products. The MSCI World is unsurprisingly at the top. There is also a slight home bias, for example via the DAX,” says Patrick Diel from DWS Xtrackers according to Morningstar. “Thematic ETFs, for example on artificial intelligence and big data, are also popular and have now reached a volume of around 6 billion euros. A very strong trend over the past two years has also been Euro overnight ETFs.”
Savings plans, young investors and income gaps
Behind the boom is a rapidly growing private investor base: According to the German Stock Institute, around 14.1 million Germans are investing in stocks, funds or ETFs – a record figure.
“People in Germany have recognized that there is no way around stocks for good long-term returns. We see that broadly diversified and continuous investments are taking place even with lower incomes. Stock investments are anchored in the middle of society,” explains Henriette Peucker, Managing Director of the German Stock Institute.
The number of young investors also increased significantly in 2025 and has more than doubled since the mid-2010s. A total of 4.9 million people under the age of 40 owned stocks, funds or ETFs – 1.2 million more than in the previous year and thus responsible for over 60 percent of the total increase. They are particularly popular here Savings plansthrough which every second person under 40 now regularly invests in ETFs or funds.
Women are also increasingly participating in the capital market, as the report by the German Stock Institute shows: One million more female investors were invested in 2025, an increase of 24 percent, while an increase of 940,000 (plus 12 percent) was recorded for men. From a regional perspective, eastern German states including Berlin saw above-average growth, which narrowed the West-East divide in share ownership slightly.
Political support for a broader stock culture is also growing – especially with regard to private retirement provision and the strengthening of the financial culture in Germany and Europe: “The social tailwind for stocks is stronger than ever. The planned early start pension can be a success in the long term in conjunction with a retirement savings account. A tax-subsidized investment savings account, as suggested by the EU Commission, would be just as helpful. We are in favor of increasing the use of stocks in all three pillars of retirement provision in Germany too “There are internationally successful solutions for all of these challenges. The door is wide open for the legislature,” emphasizes Peucker.
Europe as an alternative to the USA
After years of US dominance, Europe has now become the focus of international investors again, as extraETF explains. Lower valuations, billion-dollar investment programs and a broader industry structure make the continent an attractive alternative.
According to extraETF, analysts such as Peter Oppenheimer from Goldman Sachs even expect slightly higher returns for European stocks than for US stocks over the next ten years. In addition, extensive infrastructure, energy and defense programs strengthen the basis for growth. Experts see this as a structural change that could establish Europe as an attractive complement or alternative to the US market in the long term.
Editorial team finanzen.net
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