US and AIFs surpassing the 20 billion dollar milestone.
In recent months, Europe's investment fund market has witnessed significant growth, with both UCITS and Alternative Investment Funds (AIFs) experiencing robust net inflows and an increase in managed assets.
According to Efama's latest statistics, net inflows for AIFs reached 8.4 billion euros in May, returning to levels seen in March. This increase was driven mainly by multi-asset, real estate, and other funds. The data, aggregated from 29 national associations in Europe, does not include money market funds. Excluding money market funds, net inflows stood at 64 billion euros in May.
Simultaneously, a net total of 55 billion euros flowed into European UCITS-compliant funds in May. Mixed fund inflows remained stable at 17 billion euros, while bond fund inflows decreased slightly, with a net addition of 15 billion euros compared to 20 billion euros in April.
The overall increase in managed assets was 0.8 percent, with AIF-managed assets increasing to 7.42 trillion euros. UCITS assets, on the other hand, increased to 12.62 trillion euros. Collectively, UCITS and AIFs in Europe have surpassed the 20 trillion euro mark in managed assets.
The trends in fund categories are also noteworthy. European equities have attracted significant investor interest, with strong returns in specific sectors such as banks and industrials. For instance, the Amundi Euro Stoxx Banks fund yielded a 63.3% return in the first seven months of 2025.
Investors have also shown a preference for diversification, with mixed funds gaining some traction. Money market funds in euros showed notable inflows, reflecting demand for euro-denominated short-term fixed income.
ETFs as a format have become a key growth area within both UCITS and alternatives, seen as vital distribution channels for actively managed strategies, including so-called smart beta and systematic index-based strategies.
Enhanced regulatory scrutiny is influencing fund governance and pricing transparency across UCITS and AIFs. Efforts to harmonize cost disclosures and improve value assessments for investors are ongoing, affecting fund management practices across Europe.
In the first five months of the year, equity AIFs saw outflows, which have now totaled 47.5 billion euros. However, equity funds saw the strongest decrease in net inflows, with 29 billion euros in May compared to 48 billion euros in April.
In conclusion, Europe's UCITS and AIF markets are experiencing strong growth, especially in actively managed and alternative funds, with investor flows favoring European equities (notably banks and small caps) and certain fixed income segments. ETFs are playing an increasingly important role in delivering diverse strategies in this landscape.
The strong growth in Europe's investment fund market is evident in the increase of managed assets for both UCITS and AIFs, with other types of funds such as multi-asset, real estate, and ETFs witnessing significant net inflows. Additionally, investors are showing a preference for diversification, with mixed funds gaining traction, and enhanced regulatory scrutiny influencing the pricing transparency of these funds in the business sector.
