MARKET INSIGHTS

Flow & Tell with iShares | Q1 2025 ETF/ETP Flows

Kristy Akullian, CFA Apr 15, 2025 Global

Q1 FLOWS 2025

The scores are on the door for Q1, and there were some upsets. The S&P 500 posted its steepest quarterly drop since 2022, with tech, discretionary, and communication services leading the decline — the inverse of last quarter’s winners. The shift wasn’t just sectoral; both developed and emerging market indices outpaced the U.S. after a year of lagging behind.1

Not a singular smoking gun, but rather a slew of headlines behind the returns: aggressive tariff announcements, softer-than-expected macro prints, the release of the DeepSeek LLM model, and the Magnificent 7 closing the quarter in bear market territory.2

BREAKING RECORDS IN FIXED INCOME

U.S. listed fixed income ETFs added over $100bn in Q1 — the category’s largest quarterly inflow on record. The momentum started early, with January and February flows more than doubling the previous record for the start of a year ($76bn vs. $34bn), and March adding to the trend. In total, Q1 2025 saw roughly 2.5x its quarterly average.3

  • Short duration dominated: iShares 0-3 Month Treasury Bond ETF (SGOV) saw its largest quarterly inflow ever, pulling in $9.5bn.
  • Active fixed income punched above its weight: Despite a much smaller AUM base, active FI captured nearly half of total fixed income flows.
  • Bonds broke the trend: The Bloomberg U.S. Aggregate Bond Index returned +2.6% — its first positive quarter alongside a negative equity market since 2020.4

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EQUITIES: A TALE OF TWO MARKETS

Europe

European equities have seen a strong resurgence this year, reversing years of underperformance, with Q1 marking the largest performance gap between European equities and the S&P 500 in a decade.5

Record ETF flows have gone into midcaps ($1.7bn), industrials ($1.2bn), and financials ($1.3bn). European sector flows year to day have now surpassed those of the U.S. A large fiscal stimulus announcement in Germany further boosted growth forecasts and asset performance, particularly for iShares MSCI Germany ETF (EWG), which saw over 50% of its current AUM come from Q1 inflows. The fund added more than $1bn in the quarter, nearly doubling its AUM.

U.S. sectors

While flows typically follow performance, the tech sector defied this trend, attracting $11bn in inflows despite its double-digit selloff. iShares Expanded Tech-Software Sector ETF (IGV) had its second-best quarter, adding $1.5bn, even though it finished the quarter lower year to date.

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GOLD SHINES, BITCOIN STUMBLES

Gold

Gold was a clear winner in Q1. A mix of inflation concerns and mounting geopolitical tensions pushed prices to all-time highs, marking the metal’s biggest quarterly gain since 1986.6

  • Flows followed performance: iShares Gold Trust (IAU) saw its largest quarterly inflow since 2020.
  • February and March each pulled in over $1bn of inflows for Gold ETPs — a stark contrast to the 10-year average of just $120mn per month.
  • Gold ETPs added $6bn in net flows in March alone.

The iShares Trusts are not investment companies registered under the Investment Company Act of 1940, and therefore are not subject to the same regulatory requirements as mutual funds or ETFs registered under the Investment Company Act of 1940. Investments in these products are speculative and involve a high degree of risk.

Bitcoin

Bitcoin, by contrast, lost momentum. The digital asset fell 12% on the quarter as volatility spiked to 68% in March.7

  • ETP flows reversed: U.S. spot Bitcoin ETPs saw $5.5bn in outflows during February and March.
  • Trading activity faded: Daily average volumes hit lows, dipping below $2bn.

Gold ETPs vs. Bitcoin ETPs

Line chart comparing cumulative flow of Gold ETPs and Bitcoin ETPs from January to April 2025.

Source: BlackRock, Markit. ETF groupings determined by Markit. As of April 7th 2025.

Chart description: Line chart comparing cumulative flow of Gold ETPs and Bitcoin ETPs from January to April 2025.

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Photo: Kristy Akullian, CFA

Kristy Akullian, CFA

Head of iShares Investment Strategy for the Americas

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FUND FINDER

You can use BlackRock’s Fund Finder tool to explore the entire universe of U.S. listed ETFs. The tool provides advanced ETF screening and monitoring capabilities to help investors identify which funds may help achieve their goals. Soon you will also be able to view ETF flows data in the tool.