October ETF Flows: Year-to-date Flows Surge Past $1 Trillion.

Market Overview

October 2025 was characterized by further market volatility driven by escalating US-China trade tensions, with President Trump threatening 100% tariffs and China considering rare-earth export restrictions. Markets rallied later in the month however, on signs of a potential trade truce ahead of a Trump-Xi summit. The US government shutdown continued into its fourth week, delaying crucial economic data releases and increasing the likelihood of Federal Reserve rate cuts, with the Fed delivering a quarter-point cut amid weakening labor market conditions. Gold prices experienced dramatic swings, initially surging to an unprecedented $4,000 per ounce before suffering their worst two-day selloff in over 12 years. Regional banking concerns resurfaced as Zions and Western Alliance disclosed fraud losses, triggering the worst single-day decline in the SPDR S&P Regional Banking ETF (KRE) since April, while major banks including JPMorgan Chase, Goldman Sachs, and Morgan Stanley reported strong quarterly earnings, with Morgan Stanley's equity trading revenue surging 35%.

The ETF industry demonstrated remarkable momentum throughout October, building on a record-breaking third quarter that saw global assets surpass $18 trillion. US-listed ETFs continued their strong performance, with year-to-date inflows crossing the symbolic $1 trillion threshold during the month, reflecting sustained investor confidence despite market turbulence. European ETFs maintained their impressive growth trajectory, extending their consecutive monthly inflow streak while pushing regional assets beyond the $3 trillion milestone. Actively managed ETFs remained a standout segment of the market, with equity-focused products capturing the majority of new capital as investors increasingly embraced the ETF structure across various investment strategies. This robust activity across regions and product types underscores the ETF market's resilience and growing importance within the broader investment landscape, even as economic uncertainties and geopolitical tensions persisted throughout October.

EMEA: Flows Reflect European Instability.

Top 5 European ETF Net Inflows October 2025

^{Source: S&P Global Market Intelligence Exchange Traded Fund Data
© 2025 S&P Global Market Intelligence}

Top 5 European ETF Net Outflows October 2025

^{Source: S&P Global Market Intelligence Exchange Traded Fund Data
© 2025 S&P Global Market Intelligence}

European ETF flows clearly mirrored the continent's complex economic and political landscape, with investors strategically repositioning amid French political turmoil, ECB policy divergence from the Fed, and shifting trade dynamics. The sizeable $4.06 billion inflow into JP Morgan's Europe ETF (BBEU) alongside outflows from UK gilts and mid-cap German exposure (DEKA MDAX's -$641.81M) reflected investor preference for broader European exposure over country-specific risks, particularly as France faced political crisis following its prime minister's resignation and S&P's sovereign downgrade. Meanwhile, the significant inflow into high-yield corporate bonds (IHYG: +$986.11M) aligned with analysts’ assessments that the risk vs reward profile of European corporate bonds still represents a strong opportunity for investors. Eurozone government bonds also gained appeal (+$517.31M into VETA) as the ECB held rates steady at 2% while the Fed continued cutting. The rotation away from UK gilts (-$596.62M from IGL5) came as asset managers called on the Bank of England to halt bond sales amid concerns that the UK faced the highest 30-year borrowing costs among G7 nations.

APAC: Japan Surges as Hong Kong and China Retreats.

Top 5 APAC ETF Net Inflows October 2025

^{Source: S&P Global Market Intelligence Exchange Traded Fund Data
© 2025 S&P Global Market Intelligence}

Top 5 APAC ETF Net Outflows October 2025

^{Source: S&P Global Market Intelligence Exchange Traded Fund Data
© 2025 S&P Global Market Intelligence}

APAC ETF flows reflected significant regional market shifts and investor sentiment changes across the region. The Tracker Fund of Hong Kong ETF experienced the largest outflow at $1.001 billion, as investors retreated from Hong Kong equities amid renewed trade tensions between the US and China that temporarily dampened sentiment in the Chinese market. Similarly, the Next Funds Nomura TSE Banking Index Linked ETF saw substantial outflows of $927.21 million, likely reflecting concerns about Japanese banking sector stability following volatile movements in Japan's longer-dated government bonds. Chinese equity ETFs also faced significant redemptions, with E Fund ChiNext ETF and Fullgoal CSI A500 Index ETF losing $730.89 million and $709.21 million respectively, despite China's CSI 300 being up 30% for the year, suggesting profit-taking after what has been described as the biggest rally in Chinese stocks in eight years.

Conversely, Japanese broad market ETFs dominated inflows, with Listed Index Fund TOPIX, MAXIS TOPIX ETF, and Next Funds TOPIX ETF collectively attracting over $3.5 billion. This surge coincided with the Nikkei 225 breaking through the psychologically important 50,000 level for the first time, driven by optimism surrounding newly elected Prime Minister Sanae Takaichi's pro-stimulus policies. The Yuanta/P-Shares Taiwan Top 50 led all APAC ETFs with inflows of $2.21 billion, reflecting strong investor confidence in Taiwan's semiconductor industry following TSMC's 40% profit jump and raised revenue growth projections, reinforcing the market's belief in continued AI-driven demand. These flows demonstrate how investors repositioned toward markets benefiting from the AI boom while reducing exposure to areas facing geopolitical and economic uncertainty.

US: Large Caps Dominate

Top 5 US ETF Net Inflows October 2025

^{Source: S&P Global Market Intelligence Exchange Traded Fund Data
© 2025 S&P Global Market Intelligence}

Top 5 US ETF Net Outflows October 2025

^{Source: S&P Global Market Intelligence Exchange Traded Fund Data
© 2025 S&P Global Market Intelligence}

ETF flows directly mirrored the broader market dynamics seen in the period, with investors pouring nearly $20 billion into VOO and over $14 billion into SPY as the S&P 500 repeatedly hit all-time highs amid strong earnings and AI optimism. This large-cap preference aligns with the market's record-breaking run where, the S&P 500 powered to a record 6,875 up 17% for the year as some analysts now project that it could surge past 7,000. Simultaneously, investors withdrew $2.62 billion from the leveraged semiconductor ETF SOXL despite the semiconductor sector's earlier gains, suggesting profit-taking following in AI-related stocks. Small-cap outflows from IWM (-$1.49 billion) reflected the growing trend of investors positioning for easing geopolitical risk, lower rates, and progress on trade deals. Fixed income outflows aligned with falling yields on deposits and short-term instruments after the Federal reserve cut rates by 25bps, pushing capital into equities amid ongoing inflation concerns.

Summary of Monthly Flows

October ETF flows painted a vivid picture of global investment trends amid a complex macroeconomic landscape. Despite heightened US-China trade tensions and ongoing US government shutdown, ETF markets demonstrated remarkable resilience with global assets exceeding $18 trillion and US-listed ETFs crossing the symbolic $1 trillion inflow threshold for the year. Regional patterns revealed distinct investor preferences: US flows heavily favored large-cap equity exposure with nearly $20 billion pouring into VOO alone as the S&P 500 approached 7,000; European flows reflected political instability with investors seeking broad exposure (BBEU: +$4.06B) while avoiding country-specific risks in France and UK; and APAC flows showcased a dramatic rotation into Japanese equities (+$3.5B across TOPIX ETFs) following Prime Minister Takaichi's pro-stimulus policies while Hong Kong's Tracker Fund experienced significant outflows (-$1B) amid renewed trade tensions. These movements collectively highlighted investors' strategic positioning toward markets benefiting from AI innovation and economic stimulus while reducing exposure to geopolitical and credit risks, even as precious metals ETFs experienced volatility following gold's historic surge past $4,000 before its subsequent correction.