European ETFs rally on AI infrastructure demand and rising investor adoption

Thematic ETFs focused on artificial‑intelligence infrastructure attracted a net $13.31 billion of inflows in Europe in the first half of 2026, with semiconductor‑oriented funds pulling in $3.19 billion in the second quarter and overtaking defence funds for year‑to‑date flows. The surge reflects investors’ shift toward the physical components of AI, such as chips, memory, data‑centres and power systems, while Europe’s memory‑chip ETF market remains modest, holding roughly $62 million in assets.

Overall ETF assets in Europe reached a record USD 3.77 trillion at the end of May 2026, driven by year‑to‑date inflows of USD 220.9 billion. Active ETFs contributed strongly, pulling in about USD 20.3 billion so far this year, nearly double the amount seen in the same period of 2025. A Fidelity International survey of 6,500 European retail investors found that 35 % now hold ETFs, and 31 % understand the difference between active and passive ETFs. The study also highlighted a generational gap: 44 % of investors aged 18‑34 grasp the distinction, versus only 20 % of those over 55, and younger investors cite ease of use as a primary motivator.