July 2025 was another month with healthy inflows for the U.S. ETF industry.
These inflows occurred in a volatile but overall positive market environment in which investors around the globe acted nervous over any political and economic news. Investor sentiment was further impacted by the announcements around the new tariff regime by the U.S. president and potential tit-for-tat reactions from the markets which are the targets of the new tariffs. That said, the tariffs are seen as a kind of trade war between the U.S. and the rest of the world, especially China, by some market observers. Nevertheless, the key trade partners for the U.S., including China, might be able to negotiate trade agreements with lower-than-announced tariffs.
When it comes to this, investors were concerned about the impact of any new tariffs on the growth expectations of literally all economies around the globe. In addition to this, investors were also concerned about the impact of new tariffs on the profitability of all kinds of companies, as well as on the impact of tariffs on inflation around the globe. Therefore, it is not surprising that investors are listening very carefully to the statements on the future growth and income perspectives made by companies during the earnings season and react accordingly if necessary.
Additionally, the tensions in the Middle East also impacted investor sentiment since a possible conflict between Israel and Iran has the potential to become a broader conflict in the region and may drive up the price for oil. That said, the swings in the price for oil during this conflict were so far more stable than investors have expected. This was because no oil production sites were hit by military actions in the region and the shipping route through the Strait of Hormuz stayed open.
Meanwhile, central banks around the globe are trying to adjust their policies to the current environment. While the European Central Bank (ECB) has further cut interest rates, the Bank of Japan (BoJ) did not change its interest rates. The same is true for the U.S. Federal Reserve, which was expected to leave its interest rates unchanged despite some pressure to lower rates from the government. These decisions reflect central banks’ efforts to navigate economic challenges, including trade tensions, inflationary trends, and high market volatility, to support their local economies.
Nevertheless, fears of increasing debt in the U.S. and other major economies—which may lead to increasing interest rates—might be the reason why investors are not strong buyers of bond ETFs despite a possible need for safe haven investments. That said, the inflows into money market ETFs were on a rather normal level in July, which might be another sign that investors are in risk-on mode.
More generally speaking, aside from the geopolitical tensions, there is only a very limited number of indicators which are sending negative signals for economic growth in the U.S. and other major economies around the world. When it comes to this, it is noteworthy that most of these negative indicators are being offset by positive signals from other indicators. In addition, it looks like some major economies, such as Germany, may return to economic growth fostered by lower interest rates and/or increased government spending as stimulus. Despite these headwinds, the positive effects of lower interest rates seem to be more important for investors than the current state of some economies.
From an ETF industry perspective, the performance of the underlying markets led, in combination with the estimated net flows, to increasing assets under management from $11,566.3 bn as of June 30, 2025, to a new all-time-high of $11,828.4 bn at the end of July. At a closer look, the increase in assets under management of $262.1 bn for July was driven by the performance of the underlying markets (+$144.4 bn), while estimated net inflows contributed $117.7 bn to the growth of the assets under management.
Assets Under Management by Asset Type
As for the overall structure of the U.S. ETF industry, it was not surprising equity ETFs ($9,332.6 bn) held the majority of assets, followed by bond ETFs ($2,024.4 bn), commodities ETFs ($224.3 bn), alternatives ETFs ($212.3 bn), mixed-assets ETFs ($31.8 bn), and money market ETFs ($3.1 bn).
Within the current market environment, it is not surprising that the assets under management for all asset types marked an all-time high at the end of the month. These numbers show that the main headwinds on the markets have turned into tailwinds which were pushing the assets under management up over the course of the month.
Graph 1: Market Share, Assets Under Management in the U.S. ETF Industry by Asset Type, July 31, 2025
Source: LSEG Lipper
ETF Flows by Asset Type
The U.S. ETF industry enjoyed healthy estimated net inflows (+$117.7 bn) over the course of July despite some market insecurities in the equity and bond markets. These inflows drove the overall inflows in ETFs up to $668.0 bn for the year 2025 so far.
Given the strong recovery of equity markets, it is not surprising that the inflows in the U.S. ETF industry for July were driven by equity ETFs (+$74.3 bn), followed by bond ETFs (+$23.2 bn), alternatives ETFs (+$14.2 bn), money market ETFs (+$2.7 bn), commodities ETFs (+$2.2 bn), and mixed-assets ETFs (+$1.2 bn).
The relatively high (compared to Europe) inflows into bond ETFs, despite the insecurities about the future level of debt in the U.S., might be a sign that U.S. investors are looking for safe haven investments given the unclear outlook for future earnings from some companies caused by the pending announcement of the final tariff regime in the U.S.
Graph 2: Estimated Net Sales by Asset Type, July 2025 (USD Billions)
Source: LSEG Lipper
More generally speaking, it can be said that the flow numbers in the U.S. ETF industry indicate that U.S. investors are in risk-on mode.
Assets Under Management by Lipper Global Classifications
To examine the U.S. ETF markets in further detail, a review of the Lipper global classifications will lead to more insights on the structure and concentration of assets within the U.S. ETF industry. At the end of July 2025, the U.S. ETF market was split into 139 different peer groups. The highest assets under management at the end of July were held by funds classified as Equity U.S. ($5,054.6 bn), followed by Equity U.S. Small & Mid Cap ($887.0 bn), Equity Global ex U.S. ($886.5 bn), Bond USD Medium Term ($515.4 bn), and Equity U.S. Income ($423.8 bn). These five peer groups accounted for 65.67% of the overall assets under management in the U.S. ETF segment, while the 10-top classifications by assets under management accounted for 77.02%.
Overall, 17 of the 139 peer groups each accounted for more than 1% of assets under management. In total, these 17 peer groups accounted for $10,210.8 bn, or 86.32%, of the overall assets under management.
Graph 3: Ten Largest Lipper Global Classifications by Assets Under Management, July 31, 2025 (USD Billions)
Source: LSEG Lipper
The peer groups on the other side of the table showed some funds in the U.S. ETF market are quite low in assets and their constituents may face the risk of being closed in the near future. They are obviously lacking investor interest and might, therefore, not be profitable for their respective fund promoters.
Graph 4: Ten Smallest Lipper Global Classifications by Assets Under Management, July 31, 2025 (USD Billions)
Source: LSEG Lipper
ETF Flows by Lipper Global Classifications
The net inflows of the 10 best-selling Lipper classifications accounted for $96.2 bn. In line with the overall sales trend for July, equity classifications (+$65.7 bn) gathered the majority of flows by asset type on the table of the 10 best-selling classifications by estimated net inflows for July 2025. Given the overall fund flow trend in the U.S. ETF industry, it was not surprising that Equity U.S. (+$39.7 bn) was the best-selling Lipper global classification for July. It was followed by Alternative Currency Strategies (+$12.2 bn) and Equity Global ex-U.S. (+$10.4 bn).
The flows at the classification level show that U.S. investors seem to have further bought into U.S. large caps after the market turmoil in April to participate in the market recovery. The same is somewhat true for Alternative Currency Strategies since this classification contains the cryptocurrency ETFs and investors may want to benefit from the current upward trend in cryptocurrencies.
Despite the fact that there are classifications from various asset types on the table of the 10 best-selling classifications, these numbers show that the U.S. ETF segment is highly concentrated when it comes to the estimated net flows by classification. Generally speaking, one would expect the flows into ETFs to be concentrated since investors often use ETFs to implement their market views and short-term asset allocation decisions. These products are made and, therefore, are easy to use for these purposes.
Graph 5: Ten Best- and Worst-Lipper Global Classifications by Estimated Net Sales, July 2025 (USD Billions)
Source: LSEG Lipper
On the other side of the table, the 10 classifications with the highest estimated net outflows for July faced higher overall outflows for the month (-$16.9 bn) than those for June (-$15.2 bn).
Bond USD Corporates (-$5.6 bn) was the classification with the highest outflows for the month. It was bettered by Alternative Equity Leveraged (-$4.8 bn), Equity U.S. Small & Mid Cap (-$2.3 bn), Equity Sector Healthcare
(-$1.6 bn), and Bond Emerging Markets Global in Hard Currencies (-$1.2 bn).
Assets Under Management by Promoters
A closer look at assets under management by promoters in the U.S. ETF industry also showed high concentration, with only 109 of the 418 ETF promoters in the U.S. ETF industry holding assets at or above $1.0 bn—accounting for $11.772.2 bn in assets under management. The largest ETF promoter in the U.S.—iShares ($3,546.2 bn)—accounted for 29.98% of the overall assets under management, ahead of the number-two promoter—Vanguard ($3,409.7 bn)—and the number-three promoter—SPDR ($1,663.7 bn).
Graph 6: The 10 Largest ETF Promoters by Assets Under Management, July 31, 2025 (USD Billions)
Source: LSEG Lipper
The 10-top promoters accounted for 89.85% of the overall assets under management in the U.S. ETF industry. This meant, in turn, the other 408 fund promoters registering at least one ETF for sale in the U.S. accounted for only 10.15% of the overall assets under management. With regard to the concentration of the U.S. ETF industry by promoter, it is noteworthy that there were nine ETF promoters accounting for more than 1% of the overall assets under management each.
ETF Flows by Promoters
Since the U.S. ETF market is highly concentrated when it comes to the assets under management by promoter, it was not surprising that seven of the 10 largest promoters by assets under management were among the 10-top selling ETF promoters for July. Vanguard was the best-selling ETF promoter in the U.S. for July (+$30.2 bn), ahead of iShares (+$23.0 bn) and SPDR (+$12.8 bn).
Graph 7: Ten Best-Selling ETF Promoters, July 2025 (USD Billions)
Source: LSEG Lipper
The flows of the 10-top promoters accounted for estimated net inflows of $89.8 bn. As for the overall flow trend in May, it was clear that some of the 418 promoters (86) faced estimated net outflows (-$5.3 bn in total) over the course of the month.
Assets Under Management by ETFs
There were 4,434 instruments (primary share classes/portfolios [4,365] and [convenience] share classes [69]) listed as ETFs in the Lipper database at the end of July. Regarding the overall market pattern, it was not surprising assets under management at the ETF level were also highly concentrated. Only 829 of the 4,365 ETFs (primary share classes = portfolios) held assets above $1.0 bn each. These ETFs accounted for $11,265.5 bn, or 95.24%, of the overall assets in the U.S. ETF industry. The 10 largest ETFs in the U.S. accounted for $3,636.4 bn, or 30.74%, of the overall assets under management.
Graph 8: The 10 Largest ETFs by Assets Under Management, July 31, 2025 (USD Billions)
Source: LSEG Lipper
Estimated Net Flows at the ETF Level
A total of 2,249 of the 4,365 ETFs (primary share classes = portfolios) analyzed in this report showed net inflows of more than $10,000 each for July, accounting for inflows of $175.1 bn. This meant the other 2,116 ETFs faced no flows, or net outflows, for the month. Upon closer inspection, 305 of the 2,249 ETFs posting net inflows enjoyed inflows of more than $100 m during July—for a total of $146.5 bn. The best-selling ETF for July was Vanguard 500 Index Fund; ETF, which enjoyed estimated net inflows of $12.9 bn. It was followed by iShares Bitcoin Trust ETF (+$5.3 bn) and iShares Ethereum Trust ETF (+$4.7 bn).
Graph 9: The 10 Best-Selling ETFs, July 2025 (USD Billions)
Source: LSEG Lipper
The flow pattern at the fund level indicated there was a lot of turnover and rotation during July, but it also showed the concentration of the U.S. ETF industry even better than the statistics at the promoter or classification levels since the 10 best-selling ETFs account for inflows of $45.1 bn.
Given its size and the overall trend for net sales at the promoter level, it was not surprising that four of the 10 best-selling ETFs for July were promoted by iShares. These iShares ETFs accounted for estimated net inflows of
$15.3 bn. That said, the numbers for iShares show the concentration in fund flows even better than other measures, since the vast majority of the inflows into ETFs classified as Alternative Currency Strategies was invested in just two ETFs issued by iShares.
The views expressed are the views of the author, not necessarily those of LSEG.
This article is for information purposes only and does not constitute any investment advice.
