European-listed US equity ETFs rebounded with net inflows of €905 million on April 9, reflecting hope after days of volatility. However, this rebound has only partially undone the damage—cumulative outflows since ‘Liberation Day’ stand at €4.6 billion, according to Morningstar.
Kenneth Lamont, principal at Morningstar, noted that the week has been a rollercoaster for markets. “As Liberation Week draws to a close — marked by President Trump’s dramatic tariff announcements and subsequent pause — global markets have rebounded. However, European investors remain wary,” he said.
In contrast to the outflows from US-focused equity ETFs, European-focused ETFs lost €133 million over the same period. The difference, Lamont explained, highlights a longer-term trend in investor behaviour. “Since President Trump’s inauguration in January, European investors have shown a consistent preference for Europe-focused ETFs,” he added. These funds have seen €21.1 billion in cumulative inflows, while US-focused funds have recorded €1.4 billion in net outflows.
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Sector-specific ETF flows also showed defensive positioning, according to Morningstar’s data. Utilities stood out as the only sector to record net inflows during the week, reflecting their traditional status as a safe haven in uncertain times.
In contrast, financials – an indicator of economic confidence – continued to face outflows.
“Impact investing themes like AI and big data funds saw the largest redemptions this week, with €121 million in outflows,” Lamont said, pointing to investors’ “cautious sentiments” driven by heightened geopolitical uncertainty.
According to Lamont, this sentiment is also driven by the US administration’s protectionist trade stance — including ongoing US–China tensions and the lingering risk of tariffs on other key trading partners, despite “some moderation from their original scope”.