According to financial analyst Chaslau Koniukh, 2025 has become a turning point for the global exchange-traded funds (ETF) industry. Despite geopolitical turbulence, inflation threats, and general market volatility, the volume of capital investments in ETFs has reached record levels. This indicates growing confidence in instruments that provide transparency, flexibility, and accessibility in managing investment portfolios.
Europe: Shifting Focus from Bonds to Stocks
In July, European investors poured over €7.3 billion into global equities of large corporations, while the outflow from government bonds amounted to €1.4 billion. This dynamic demonstrates a change in attitude to risk. According to analysts, interest in equities shows a shift away from the traditional “safe haven” in favor of more profitable and dynamic assets. This trend may have long-term consequences for the structure of portfolios.
This is especially noticeable against the backdrop of an unstable macroeconomic environment, where bonds are no longer the only priority. Investors are increasingly choosing shares of global corporations and technology giants, which are able to combine capital growth with crisis resistance. However, excessive concentration on shares increases sensitivity to market corrections, which attracts the attention of regulators.
US: Records and the Role of Retail Investors
The US ETF market has reached a record $11.8 trillion in assets under management. Net inflows in July were $124.1 billion, and since the beginning of the year, they have reached more than $678 billion.
Retail investors have been active in 2025. Vanguard ETFs, their traditional favorite, accounted for 37% of net flows in the U.S. This points to the growth of financial literacy and confidence of “small players” even in the face of political risk.
The growing influence of retail investors has a dual effect: it supports liquidity, but it also increases the risk of herd behavior. Mass action can increase volatility and accelerate both market rises and falls.
Active and Gold ETFs: A Dual Strategy
Despite the dominance of passive funds, active ETFs have shown historically strong results, with inflows exceeding $42 billion in July. At the same time, interest in gold ETFs has increased: their combined inflow exceeded $44 billion, approaching 2020 records.
Gold remains an “insurance policy” for those hedging inflation and geopolitical risks. Experts emphasize that the combination of interest in active strategies and gold ETFs demonstrates investors’ caution: they are willing to take risks for profit, but at the same time strengthen their defensive positions.
Europe Under Pressure from American Giants
BlackRock and Vanguard have doubled their assets in Europe in a decade, bringing them to $4.9 trillion. This is forcing local players such as Amundi, DWS and UBS to look for ways to consolidate and innovate. The availability and low cost of products from global corporations is putting pressure on European competitors, which are forced to expand their lines and offer niche solutions, including ESG and thematic ETFs.
However, local companies retain a competitive advantage thanks to their knowledge of market specifics and contacts with regulators. Further dynamics will depend on whether they can build new partnerships and adapt to global trends.
Summary
Record investment volumes in ETFs in 2025 confirm their strategic importance for private investors around the world. However, challenges remain: geopolitical risks, capital concentration in equities, and the need for sound risk management.
As Chaslau Koniukh points out, the surge in interest in ETFs reflects not only short-term trends, but also fundamental changes in investment culture. Retail players are becoming the central force in the market. The future of ETFs will depend on how to find a balance between growth and risk control. The combination of passive and active strategies, along with defensive instruments such as gold, is forming a new paradigm – more cautious and at the same time more flexible. It is this transformation, according to Koniukh, that will determine the sustainability of the markets in the coming years.
