Flows into European thematic UCITS ETFs hit a record $8.7bn in the first half of 2025 marking a reversal from the lacklustre flows in 2024, which reached $308m for the whole year.
ARK Invest Europe’s latest quarterly update shows defence remained the dominant theme among asset allocators attracting $7.9bn in net flows across global and European defence ETFs, which captured $4.8bn and $3.1bn respectively.
Unsurprisingly, AI ETFs remained popular with $904m in net inflows, supported by the innovation in large language models, robotics, and autonomous systems.
Having seen $311m in outflows in the first half of 2024, cybersecurity ETFs continued to rebuild momentum drawing $318m, reflecting growing investor conviction in cybersecurity as a structural necessity amid rising digital threats.
On the flip side, clean energy, healthcare innovation and electric vehicles and battery tech ETFs all saw net outflows of $307m, $279m and $203m respectively.
Rahul Bhushan, managing director and global head of index at ARK Investment Management, said: “After a cautious 2024, it’s evident that investors are re-engaging with innovation themes that offer clearer earnings visibility and resilience in an increasingly complex macro landscape.
“We’re seeing investor conviction in megatrends with structural tailwinds, particularly defence, AI, and energy security. Thematics are no longer just tactical bets, they’re core strategic exposures.”
