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Quote of the day: “In the short-run, the market is a voting machine - reflecting a voter-registration test that requires only money, not intelligence or emotional stability - but in the long-run, the market is a weighing machine.” - Benjamin Graham (Economist).

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For a long time, ETFs were the sensible corner of the portfolio. Useful, low-cost, liquid. A cleaner way to hold the S&P 500 or tilt into a sector. That version of the story is still true. It just isn't the interesting part anymore.

Something more important is happening. The ETF is becoming the instrument investors reach for when the thing they actually want to own is hard to get to directly. Uranium. Private credit. Infrastructure. Defence technology. AI. Robotics. Space. These are not neat allocations. They sit across public equities, private markets, geopolitics, industrial policy, and venture-style innovation; sometimes with very messy underlying liquidity.

And yet, more and more of them are being pulled into ETF form.

The numbers make this impossible to ignore. Global ETF assets hit a record $21.91 trillion at end-April 2026, surpassing the previous high of $21.24 trillion set in February. Year-to-date inflows through April reached $856.38 billion; already exceeding the full first-half totals of any prior year. Q1 alone brought $626.42 billion, the highest first-quarter figure ever recorded. Europe is no longer a sideshow: European ETF assets reached $3.22 trillion at end-2025, after record annual inflows of $396.84 billion.

👉 Growth in assets in the Global ETFs industry as of the end of April

The product category is growing. But the more important question is: what is the ETF now being asked to do?

👉 Market Share, Assets Under Management in the Global ETF Industry by Asset

The market has moved past the question of whether investors like ETFs. They do.

👉 ETFs are the fastest-growing product on retail investment platforms in the last five years

BBH's 2026 Global ETF Investor Survey found that 96% of professional investors plan to increase ETF allocations over the next 12 months, 98% plan to increase active ETF allocations, and 99% said they would consider private-markets ETFs.

👉 What product types do you intend to increase allocations to in the future?

Institutional behavior is shifting too. Cerulli and Invesco research published in April 2026 found that North American institutional ETF holdings reached approximately $337 billion in 2025, nearly doubling in five years. Institutions are using ETFs not only as core holdings, but for liquidity management, tactical allocation; and, critically, as public-market proxies for private-market exposure.

👉 Growth of ETF assets among corporate and public defined benefit plans (DB) ($m)

That last phrase is the one to sit with: public proxies for private markets.

A pension fund cannot practically underwrite 200 small AI companies one by one. A retail investor cannot usually access venture funds, private credit vehicles, or institutional infrastructure mandates. A sovereign wealth fund may want a liquid tactical position before committing to a ten-year lockup.

So the ETF steps in. It becomes a discovery layer, a pricing signal, a benchmark and, increasingly, a transition vehicle between public and private allocation.

That is not "ETFs are growing." We knew that. The shift is that ETFs are becoming the default structure for markets investors want but cannot easily own directly. And that makes the ETF part of the market's plumbing, not just a product sitting on top of it.

This is not a newsletter about BlackRock. But BlackRock is one of the clearest indicators of where the market is heading - because no other firm is simultaneously building at this scale on both sides of the public-private line.

BlackRock entered 2026 with $14 trillion in AUM, after record net inflows of $698 billion in 2025. iShares alone gathered $527 billion in net inflows last year.

At the same time, BlackRock has been building hard into private markets. It completed the acquisition of Global Infrastructure Partners in October 2024, creating an infrastructure platform with approximately $170 billion in AUM across more than 100 countries. In July 2025, it completed the acquisition of HPS Investment Partners, forming a combined Private Financing Solutions platform with around $190 billion in client assets. And at its June 2025 investor day, BlackRock set its first firmwide target for private-markets fundraising: $400 billion by 2030.

The signal is not that BlackRock is big. The signal is that the world's largest ETF platform is simultaneously building private credit, infrastructure, data, and portfolio-technology capabilities at scale. The firm at the centre of ETF distribution is positioning itself at the centre of public-private portfolio construction. That tells where the market is moving: away from separate buckets called "public markets" and "private markets," towards integrated structures where capital flows between them more fluidly. And the ETF is one of the cleanest vehicles for that transition.

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One reason this convergence is happening now is that the ETF format is no longer limited to tracking an index.

ETFGI reported that actively managed ETFs held $2.12 trillion in global assets at end-March 2026, and gathered $245.21 billion of net inflows in Q1 alone - up 70% from the previous Q1 record set in 2025. BlackRock projects global active ETF AUM could rise from $1.4 trillion in mid-2025 to $4.2 trillion by 2030.

This matters because active management makes the format more flexible. The new story is about packaging strategy, outcomes, income, private-market-adjacent exposure, thematic views, and dynamically managed positions - all inside a structure investors already trust and understand. The format has earned investor confidence over two decades. Now issuers are testing how much complexity that confidence can carry.

👉 BBH surveyed investors, “In which of the following ETF strategies do you plan to invest over the next 12 months?”

Three structural forces converged to make the ETF the default wrapper for complex exposure.

1. ⚛️ Uranium: the scarcity trade. The IEA says nuclear interest is at its highest since the 1970s, but four countries control 75%+ of mine production and output covers only ~90% of utility needs. The Global X Uranium ETF: $7.76bn in net assets. It doesn't fix supply concentration - but it lets investors express a scarcity view without building the position asset by asset.

2. 💳 Private credit: where the engineering gets serious. The SPDR SSGA Apollo IG Public & Private Credit ETF (launched February 2025) allows 10-35% Apollo-sourced private credit, with firm bids covering seven-day stress redemptions. BondBloxx's Private Credit CLO ETF: $201.7mn, 87.4% in private-credit CLOs. Whether daily-traded vehicles should hold assets not built to trade daily is unresolved. That is exactly why it matters.

3. 🏗️ Infrastructure: the proxy problem. PwC forecasts $151.1 trillion in cumulative global infrastructure investment by 2050. The iShares Global Infrastructure ETF: $10.69bn - but it's 77 listed equities (NextEra, Transurban, Aena), beta 0.59, P/E 22.64. Investors are buying companies that own infrastructure, not infrastructure as an asset class. The ETF creates the on-ramp. It is not the destination.

4. 🛡️ Defence: geopolitics becomes investable. Global military spending hit $2.887 trillion in 2025 (SIPRI). European NATO: +14%, fastest since 1953. The EU's ReArm Europe plan: up to €800bn. The Global X Defense Tech ETF: $8.09bn. For founders in dual-use, cyber, or AI-adjacent defence - public-market capital is now pricing and benchmarking your category. That changes the fundraise narrative years before an IPO.

5. 🤖 AI & space: what's actually in the basket? The iShares Future AI & Tech ETF: $3.17bn - but top 10 holdings are 48.65% of the fund, almost entirely semiconductors (AMD, Marvell, Micron, NVIDIA, SK Hynix). The application and software layers are largely absent. This is a chip bet, not an ecosystem bet. The Procure Space ETF ($742.5mn) now trades on Coinbase - the wrapper evolving by distribution channel, not just asset class. For founders: once a category gets an ETF, index providers define what's in it. That classification determines which flows hit your stock. It's not administrative. It's economic.

This story needs honesty about its limits; and those limits connect directly to the hardest questions raised above. Start with the cleanest example. BlackRock closed and liquidated the iShares Frontier and Select EM ETF after citing persistent liquidity challenges, including delays and limits on currency repatriation in certain markets. The final trading date was January 6, 2025. The fund had operated for nearly 12 years before the underlying market mechanics made continuation untenable. The Financial Times described it as part of a wider retreat by ETFs from frontier markets.

The lesson is clear: the ETF cannot fix broken market plumbing. When underlying liquidity, pricing depth, and market-making infrastructure are not there, the product cracks; regardless of investor demand.

But the frontier-market case is the easy one. The harder question is whether the same structural risks apply, in subtler forms, to the private credit ETFs now being launched. What happens in a credit stress event where multiple private credit ETFs face simultaneous redemption pressure? The liquidity backstop has not been tested under fire.

None of this means private credit ETFs will fail. It means the next phase of ETF expansion will be judged differently. Not by AUM growth or product launches, but by the quality of the structure underneath: liquidity engineering, valuation rigour, disclosure standards, stress-test results, and the credibility of the counterparties standing behind the bid.

The frontier-market closure and the private credit launches are two sides of the same coin: the ETF format works when the underlying mechanics support it. The question is how far those mechanics can be stretched before something gives.

There is a structural question sitting underneath all of this that Europe has not fully answered. The spending commitments are real. The ReArm Europe plan targets €800 billion. PwC's infrastructure outlook points to a major renewal cycle across Europe and North America. European savers, pension funds, and asset managers have meaningful capital to deploy.

European ETF adoption is accelerating ($3.22 trillion in assets at end-2025, with record inflows) and ETFs can play a genuine role in broadening participation. They can create benchmarks for strategic sectors, make themes visible to a wider investor base, and give institutions a way to build positions in areas like defence, energy, and AI infrastructure before making larger private-market commitments.

But the format alone cannot solve what are deeper capital-market problems. Europe still has a relatively thin pipeline of growth-stage companies going public. IPO pathways remain weaker than in the US. Pension participation in innovation is structurally lower. The gap between early-stage venture and public-market liquidity is wider.

An ETF can package the public companies that exist. It cannot create the companies that don't. If European capital remains structurally underexposed to the sectors shaping the next decade (AI infrastructure, defence technology, energy systems, industrial automation, deeptech) the ETF can help at the margins. But the core problem is upstream: company formation, growth capital, and the institutional risk appetite to back them. This deserves its own analysis. For now, the point is that the ETF is a useful layer in a functioning capital-market stack. It is not a substitute for the layers that are missing.

The next ETF cycle will not be about more products. It will be about more complex exposures moving into a format originally designed for simple ones.

💡 Two additional observations😀

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European Women in VC is a proud partner to Redstone, AlpMomentum, TUM, the University of Trier and Jörn Block in the Redstone University Startup Index 2026, one of Europe’s largest studies on academic entrepreneurship.

📍 Full report: Redstone University Startup Index 2026: Europe’s Trillion Euro Opportunity. Find more at: https://redstone.vc/research/redstone-university-startup-index-2026

The study analyses 1,000 higher education institutions and 50 public research organizations across the EU/EEA, the UK and Switzerland. Together, these institutions operate with more than €300 billion in annual budgets and have already helped create more than 23,000 economically viable startups. But the efficiency gap is huge: some institutions create only 1 startup per €100 million of annual budget, while top performers create 80+ startups per €100 million.

The upside, if 🇪🇺 Europe’s institutions performed like the top 10% of their peer groups, is enormous:

Brynne Kennedy is the Co-Founder and Managing Partner of 🇨🇭Smart Society Ventures, a decarbonization and energy tech investment firm accelerating the path to Net Zero across Europe and the US. Before transitioning to the VC side, Brynne founded the global enterprise software giant Topia, raising over $100M in venture capital, navigating global expansion, and leading the company to a successful private equity acquisition. 👉 Find more about Brynne here!

Monica Blatyta is the Managing Partner and Founder of 🇧🇷🇵🇹 Eqwow Ventures, a VC firm that bridges the gap between high-growth Latin American talent and sustainable, ESG-driven investment strategies. Monica is a true bridge-builder between the European and Latin American ecosystems. Having studied at Universidade Católica de Lisboa and built a career in Europe before moving to LatAm, she represents the global mobility and cross-continental leadership that defines the modern VC landscape. 👉 Find more about Monica here!

Sonia Fernández is a Partner at 🇪🇸 Kibo Ventures and a leader in the European ecosystem. With over 20 years of experience, she is the rare case, bridging the gap between operations and strategic venture capital. Her operating experience includes founding and leading giants like MercadoLibre and Match.com in Spain. Now, she is a recognized partner and portfolio leader at Kibo, investing in the industry's structural future. 👉 Find more about Sonia here!

Copenhagen-based KOMPAS VC, co-founded by Talia Rafaeli, announced the final close of its €160 million Fund II, focused on backing early-stage industrial technology startups. The fund will invest in companies modernising physical industries across areas such as manufacturing, the built environment, energy, advanced materials, logistics, industrial AI, robotics, and cybersecurity.

The close reinforces growing institutional conviction behind the transformation of the physical economy - where productivity, resilience, and decarbonisation are becoming core investment themes. It is a strong signal for founders building in industrial tech: the market increasingly needs specialist capital that understands long adoption cycles, legacy infrastructure, and complex industrial customers. 👉 Find more here!

Auxxo Female Catalyst Fund, Germany's first female-focused VC fund based in Berlin, has now backed 50 female co-founded companies. What started in 2019 as an angel fund founded by Bettine Schmitz and Dr. Gesa Miczaika evolved into the first Female Catalyst Fund in 2021, deploying €19m across 30 startups. In 2024, Auxxo launched its second Female Catalyst Fund with a fund size of €28.5m, already invested in 10 startups with further investments underway. 👉 Find more here!

Congratulations to Triin Linamagi and Rupa Popat on the £7.5M first close of the Arāya Sie Fund, a partnership fund between Sie Ventures and Arāya Ventures. 👏 The fund will back female founders building across AI, deeptech, fintech, healthcare, and climate throughout the UK and Europe, combining early-stage capital with hands-on operational support and access to a strong ecosystem of operators, investors, and founders. Find more here!

Funding news⚡

Industry: AI | Location: 🇬🇧 London | Funding: $6m

London-based Rezonant, founded by former Stripe UK CTO Emma Burrows, launched out of stealth with a product development workspace for teams building with AI coding agents. The company received $6 million in seed funding from General Catalyst and Firstminute Capital.

Rezonant is tackling a new bottleneck in software development: AI has made code dramatically faster to produce, but deciding what to build, translating product intent into clear specs, and turning ideas into engineering-ready work has become harder. Rezonant sits above tools like Cursor, Claude Code, and GitHub Copilot, helping product teams turn ideas into structured specs, tasks, and tickets grounded in the codebase. 👉 Read more here.

LiveEO launches its own satellite constellation, secures ESA backing, and announces a new funding round 🛰️

LiveEO launched Twinspector, its own satellite constellation purpose-built for monitoring critical infrastructure. Shortly after, the company secured seven-figure funding from the European Space Agency’s InCubed programme - a strong vote of confidence in the team building Europe’s dedicated capability for high-resolution Earth observation. 👉 Read more here.

Synergi named one of Finland’s 10 hottest startups ⚡

Synergi was named one of the ten hottest Finnish startups by Talouselämä, a leading Finnish business and financial magazine. It is a well-deserved recognition for the team building the home energy management layer connecting households, utilities, and grid operators - a critical piece of the future distributed energy system. 👉 Read more here.

☀️ Solar Monkey and Eturnity merge to create a European leader in installer software

Solar Monkey and Eturnity recently announced their merger, forming a European leader in software for solar and energy installers. Together, the combined company supports more than 2,000 installers across 8+ countries, providing a full software backbone from design and sales through to installation and permitting. The merger strengthens the company’s position as installer software becomes a critical layer in Europe’s energy transition. 👉 Read more here.

Together with AGX venture fund, lead by Iwona Cymerman and Filip Vurdelja, Venture Connections and European Women in VC delivered the first ever Tech Stack Report. Dive in here :

We're a squad of over 1000 senior female venture capital wizards from all over Europe and beyond. We're here to flip the script and make things right.

Join us in shaking up the VC world! 🚀

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