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European ETP assets reached $3.8tn at the end of May, up 5% on the month and 16% year-to-date. Net flows of $46.5bn came in just $0.4bn above April, confirming that the spring recovery in demand has settled at a high level rather than rolling over after the March slowdown. Trading told a quieter story: volumes eased from April and RFQ activity recorded its lowest monthly print of the year.
Beneath the headline number, two shifts are worth attention: the outsized share of flows going to fixed income, and a rotation in thematic positioning away from the Q1 geopolitics trade and back towards AI.
Fixed income took a disproportionate share of flows
Fixed income drew $15.6bn of net new money in May, up roughly 54% from $10.2bn in April. That was about 35% of total monthly flows against a 19% share of European ETP AUM, a clear overweight relative to its footprint. The composition broadened too. Earlier months leaned heavily on ultra-short maturities; in May, government bonds, corporate bonds and high yield all attracted meaningful inflows, which points to allocation across the curve and credit spectrum rather than a single duration call.
The defence and energy trade gave way to AI
The thematic picture inverted the first quarter. Defence and energy dominated Q1, much of it a reaction to the Iran conflict. From April that momentum faded: energy saw outflows, and defence attracted only limited additional demand. AI-related exposures filled the gap. Semiconductors, infrastructure and new energy all recorded sustained inflows, while IT excluding semiconductors turned positive as it recovered from the February–March sell-off. The breadth is the point. Flows are no longer concentrated in chipmakers but spread across the enabling layer, from infrastructure to the power themes tied to AI demand such as clean energy, uranium and hydrogen.
What it signals
Two months of near-identical net flows suggest a more durable demand base than the volatile Q1 reading implied. For anyone reading flows as a positioning signal, the more useful detail is compositional: the fixed income bid is widening beyond cash substitutes, and the thematic bid has consolidated around a broader AI value chain rather than the headline geopolitical names. Both are the kind of rotation that aggregate AUM figures obscure.
The figures here are drawn from ETFBOOK’s European ETP flow and AUM data, which tracks daily net flows and trading volumes across the European ETP universe, segmented by asset class, sector and theme. The full May 2026 European ETP Market Landscape, prepared by Davide Guberti, Head of Data Analytics, breaks each of these movements down by exhibit.
