Active funds and credit lead a record first half even as equities dipped 0.9% in June.
US-listed ETFs took in $196 billion in June, capping a second quarter that brought in $560 billion, the largest quarterly total on record for the industry.
The figures come from State Street Investment Management's monthly ETF flows report, compiled by Matthew Bartolini, the firm's global head of research strategists.
It shows that year-to-date inflows have now crossed $1 trillion for the first time in the first half of a calendar year, and State Street projects full-year 2026 inflows will reach $2.3 trillion, which would top 2025's record of $1.5 trillion. Rolling 12-month flows already stand at $2 trillion, itself a record for any 12-month stretch.
Three forces have driven the pace. 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 making up only 16% of industry assets.
Combined, low-cost and active ETFs span 3,368 funds, meaning the remaining roughly 2,000 ETFs on the market split just 12% of inflows between them, with 800 of those seeing outflows or no activity at all this year.
Regional diversification
Non-US equity ETFs pulled in $228 billion so far this year, representing 34% of all equity inflows despite non-US exposures making up only 20% of equity ETF assets, pointing to advisors and investors building in an overweight to international markets.
US equity ETFs still led in dollar terms, at $441 billion year to date, and June inflows skewed heavily domestic, with $112 billion, or 80% of equity flows, going into US-focused funds even though 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. Steady participation is broad, too, with 73% of EM funds posting inflows this year.
That said, single-country EM exposures did not share in the enthusiasm, losing $658 million even as developed-market single-country funds gained $3.3 billion, with China-focused ETFs alone shedding $1.4 billion.
Sectors and style rotation
Sector ETFs collected $17 billion in June, though technology alone accounted for $13 billion of that, 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, the best of any sector. Energy ETFs lost $3 billion in June, reversing gains tied to the earlier spike in oil prices around the Iran conflict as prices have since eased.
Value strategies overtook growth for the first time this year, taking in $13 billion in June versus growth's more muted $1.9 billion, even though growth ETFs had gathered $40 billion over the trailing three months on the back of the AI rally.
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
Three themes stood out in bonds. 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 also stayed 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 and closing in on $100 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. But 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 funds cool off
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.
