US-listed single-country exchange-traded funds have become a dominant force in equity investing this year, pulling in more than $26 billion through late September, according to TD Securities' U.S. ETF Weekly report. That figure dwarfs the $6.5 billion the category collected in all of 2025, reflecting a surge in demand for targeted international exposure.
The inflows come amid a record-breaking year for the broader ETF market. Total US-listed ETF assets reached $16.4 trillion as of September 25, 2026, with year-to-date flows of roughly $1.5 trillion already surpassing the $1.48 trillion gathered in all of 2025, per Bloomberg data cited by TD Securities. The Investment Company Institute separately reported net issuance of $26.61 billion for the week ended September 16, 2026, underscoring sustained investor appetite.
Asia dominates the flow picture
Most of the single-country inflows have concentrated in a few markets with compelling structural stories. Japan attracted approximately $9.5 billion year-to-date, buoyed by corporate governance reforms, shareholder-friendly policies, and improving profitability. South Korea followed with about $9 billion, driven by its pivotal role in the global artificial intelligence and semiconductor supply chain.
"South Korea and Taiwan offer direct access to key parts of the semiconductor and AI infrastructure supply chain," TD Securities analysts wrote in their September 29 report. That dynamic has translated into outsized fund flows. Canada drew $3.6 billion, with demand tied to financials, energy, and natural resources, while Taiwan pulled in $3.1 billion.
At the fund level, the iShares MSCI South Korea ETF (EWY) led with $7.7 billion in inflows, followed by the iShares MSCI Japan ETF (EWJ) at $4.3 billion, the Franklin FTSE Taiwan ETF (FLTW) at $2.9 billion, and the iShares MSCI Canada ETF (EWC) at $2.8 billion. The JPMorgan BetaBuilders Japan ETF (BBJP) added $2.7 billion.
Why advisors are shifting to country-specific funds
The surge reflects a change in how financial advisors construct international allocations. Rather than relying solely on broad developed- or emerging-market benchmarks, investors are using country ETFs to express views on specific economic, technological, or policy catalysts, according to TD Securities.
The firm identified four drivers: targeted AI exposure via South Korea and Taiwan; improving Japanese fundamentals, including earnings momentum and reform momentum; a desire for diversification beyond the US after years of domestic outperformance; and the precision that country funds offer versus broad international products. This trend has been a hallmark of 2026, with international equity ETFs seeing record inflows earlier in the year as non-US markets outperformed.
For context, the broader market has also been active. US-listed ETFs took in $33.4 billion for the week ending September 25, led by $17.8 billion in equity inflows and $10.8 billion in fixed income. Global ex-US ETFs posted their largest weekly inflows in a year, with the iShares International Country Rotation Active ETF (CORO) and the iShares MSCI ACWI ex US ETF (ACWX) each drawing about $4.4 billion.
Alternative ETFs saw strong demand, with the iShares Bitcoin Trust ETF (IBIT) adding $1.2 billion, the iShares Systematic Alternatives Active ETF (IALT) $907 million, and the Fidelity Wise Origin Bitcoin Fund (FBTC) $702 million. On the equity side, large-cap funds led with $19 billion in inflows, while mid-caps saw outflows of $2.1 billion. Factor-based ETFs registered net outflows of $13.3 billion, with value strategies shedding $9.6 billion—the largest weekly value outflows in a year—driven by redemptions from the Pacer US Cash Cows 100 ETF (COWZ), the VictoryShares Free Cash Flow ETF (VFLO), and the Vanguard Morningstar Value ETF (VTV).
In fixed income, aggregate bond and government ETFs led with $7 billion and $4.6 billion in inflows, respectively. Sector ETFs posted $5.6 billion, with financials attracting $2.3 billion—the second-largest weekly financial ETF inflows in a year—largely on the back of $2 billion into the State Street Financial Select Sector SPDR ETF (XLF). Health care and energy followed with $998 million and $875 million.
At the single-stock level, NVIDIA Corp drew the largest inflows of any S&P 500 constituent via ETFs last week at $1.4 billion, highlighting the continued AI focus. As advisors navigate this landscape, the shift toward country-specific vehicles appears set to persist, with implications for portfolio construction and client conversations.
