US-listed exchange-traded funds absorbed $196 billion in June, concluding a second quarter that saw $560 billion in net inflows—the largest quarterly total on record, according to State Street Investment Management's monthly ETF flows report compiled by Matthew Bartolini, the firm's global head of research strategists.
Year-to-date inflows have surpassed $1 trillion for the first time in a first half, and State Street projects full-year 2026 inflows will reach $2.3 trillion, exceeding 2025's record of $1.5 trillion. Rolling 12-month flows now stand at $2 trillion, another record for any 12-month stretch.
Three Pillars of Growth
Low-cost ETFs accounted for 49% of year-to-date inflows, or $506 billion, while active ETFs took in 39%, or $398 billion. Bond ETFs added $300 billion, representing 29% of flows despite comprising only 16% of industry assets. Combined, low-cost and active ETFs span 3,368 funds, leaving the remaining roughly 2,000 ETFs to split just 12% of inflows, with 800 of those seeing outflows or no activity this year.
International Diversification
Non-US equity ETFs pulled in $228 billion year to date, representing 34% of all equity inflows despite non-US exposures making up only 20% of equity ETF assets. US equity ETFs still led in dollar terms at $441 billion, and June inflows skewed heavily domestic, with $112 billion—80% of equity flows—going into US-focused funds even as non-US equities modestly outperformed for the month. Emerging market ETFs added $2.2 billion in June, bringing the 2026 total to $38 billion, already ahead of the full-year record of $35 billion set in 2025. However, single-country EM exposures lost $658 million, with China-focused ETFs alone shedding $1.4 billion.
Sector and Style Rotation
Sector ETFs collected $17 billion in June, but technology alone accounted for $13 billion, or 78% of sector flows, well above tech's 45% share of sector assets, even as the sector fell 3.3% for the month on AI regulatory and issuance concerns. Industrials led all other sectors with $2.2 billion in June inflows and rank second for the year, a position rewarded by industrials' 19.5% gain in 2026. Energy ETFs lost $3 billion in June, reversing gains tied to the earlier spike in oil prices around the Iran conflict. Value strategies overtook growth for the first time this year, taking in $13 billion in June versus growth's $1.9 billion. Small-cap ETFs saw the smallest June inflows of any style category but have turned positive for the year, helped by US small caps returning 22% in 2026 versus 10% for large caps.
Fixed Income: Duration, Inflation, and Credit
Short-term government bond ETFs added $8 billion in June and $58 billion year to date, nearly matching all of 2025's $69 billion, while long-term government bond ETFs shed $1 billion in June and $6.5 billion for the year as investors continue avoiding duration risk. Inflation-linked bond ETFs gathered $2 billion in June, extending a run of inflows in 17 of the past 18 months, with CPI running at 4.2%. Credit exposures remained in favor, led by investment-grade corporate bond ETFs at $11 billion in June, pushing total credit-sector inflows to $17.8 billion for the month and $62 billion for the year. Convertible bond ETFs added $400 million in June and $3 billion for the year, a total already exceeding the combined inflows of the past 11 years, aided by a 21% return in the category so far this year versus 12% for stocks and 0.6% for bonds.
Active Funds Hit New Highs
Active ETFs pulled in $74 billion in June, a monthly record, and are on pace for $820 billion in 2026 after gathering $398 billion so far. Seventy percent of active ETFs posted inflows in June. Within equities, large-cap active strategies led, alongside continued demand for actively managed technology funds. Ultrashort bond strategies topped active fixed income flows. Outcome-oriented strategies also gained ground: derivative income funds took in $5 billion in June and $32 billion for the year, while defined outcome ETFs added $1.5 billion in June and $7 billion year to date, with assets now at $88 billion, nearly double the assets held in low-volatility factor ETFs. Actively managed leveraged equity ETFs added $8 billion in June and $15 billion for the year, both records, pushing assets to an all-time high of $51 billion. However, combined with index-based leveraged equity funds, the broader leveraged equity category has seen $11 billion in net outflows this year and $24 billion in cumulative net redemptions since the start of 2025.
Thematic ETFs gathered just $258 million in June, a sharp slowdown from the prior three months. Robotics and AI funds posted their first monthly outflow in more than a year, and space-related thematic ETFs lost $500 million in June after a strong recent run. Smart cities funds bucked the trend, continuing a pattern of steady interest across the year and over the trailing 12 months.
For advisors navigating these trends, recent regulatory developments may offer new opportunities. The House Bill Proposes Adviser-Led Path to Accredited Investor Status for Clients could expand access to certain investments, while the SEC Opens 60-Day Comment Window on Novel ETFs, Including Prediction-Market Funds signals potential shifts in product availability.
