The U.S. ETF industry enjoyed strong inflows over the course of May 2026 in an environment in which global financial markets were shaped by a delicate balance between geopolitical tensions, constrained fiscal policy, and diverging central bank strategies. Equity markets continued to advance, supported by solid earnings and technology‑driven growth, while bond markets remained more cautious, reflecting persistent inflation and higher borrowing costs.
The conflict in the Middle East remained the dominant driver throughout the month. Disruptions to shipping routes and energy supply kept oil prices elevated, pushing up inflation expectations across major economies. Bond markets reacted swiftly, with government borrowing costs rising sharply—particularly in the United States, where 10‑year Treasury yields reached around 4.6%. These elevated yields unsettled investors and reinforced expectations that monetary policy would stay tight for longer.
Toward the end of May, however, sentiment improved as negotiations between the United States and Iran showed tentative progress. Oil prices eased, helping to stabilize markets and support a recovery in risk appetite.
At the same time, monetary policy paths continued to diverge across major economies. The Federal Reserve held rates steady at 3.50%–3.75%, maintaining a cautious stance as inflation remained uncertain and growth held up. Policymakers signalled that further rate cuts were no longer guaranteed, shifting toward a more neutral, slightly hawkish outlook.
In the euro area, the ECB also left rates unchanged at 2.0%, but discussions increasingly focused on whether further tightening might be required. Inflation, particularly in services, remained persistent, while the energy shock complicated the disinflation process. This kept the ECB firmly in a cautious, data‑dependent mode.
Japan remained on a different path. The Bank of Japan, after beginning its policy normalization in late 2025, held rates steady despite inflation around 2.5%. Political pressure grew during May, highlighting tensions between monetary independence and fiscal priorities as the government pushed for continued economic support.
These differing approaches, a policy pause in the U.S., tightening bias in Europe, and gradual normalisation in Japan added to volatility in global bond markets and currency movements.
Fiscal policy provided little support. Most advanced economies entered 2026 with stretched public finances, limiting their ability to cushion the impact of higher energy prices. Rising bond yields further increased borrowing costs, reinforcing fiscal constraints and making markets more sensitive to interest‑rate expectations.
Against this backdrop, equity markets delivered another strong month. Robust corporate earnings and continued investment in artificial intelligence drove gains. Improving geopolitical sentiment and falling oil prices late in the month also helped, as investors became more confident that central banks would avoid aggressive tightening.
Bond markets, however, remained cautious. Yields stayed elevated after sharp increases earlier in the year, reflecting both inflation concerns and continued government issuance. Although yields eased slightly toward month end, they continued to weigh on valuations and investor confidence.
Emerging markets stood out as relative outperformers. Equity markets in Asia benefited from strong earnings and their key role in global technology supply chains, particularly in semiconductors. Stabilizing geopolitical conditions also supported risk appetite. In bond markets, higher global yields created pressure, but easing commodity prices and more stable inflation expectations helped attract selective inflows.
From a U.S. ETF industry perspective, the performance of the underlying markets led, in combination with the estimated net flows, to increasing assets under management (from $14,902.1 bn as of April 30, 2026, to $15,709.2 bn at the end of May). At a closer look, the increase in assets under management of $800.1 bn for May 2026 was driven by the performance of the underlying markets (+$617.5 bn), while the estimated net inflows added $189.6 bn, to the assets under management.
Assets Under Management in the U.S. ETF Industry
As for the overall structure of the U.S. ETF industry, it was not surprising equity ETFs ($12,157.3 bn) held the majority of assets, followed by bond ETFs ($2,509.1 bn), alternatives ETFs ($614.1 bn), commodities ETFs ($362.9 bn), mixed-assets ETFs ($37.2 bn), and money market ETFs ($28.6 bn).
Graph 1: Market Share, Assets Under Management in the U.S. ETF Industry by Asset Type, May 31, 2026
Source: LSEG Lipper
Given the volatile but overall positive market environment over the course of the month, it is only somewhat surprising that the overall assets under management in the U.S. ETF industry hit a new (month end) all-time high at the end of May 2026. When it comes to this, it is noteworthy that the assets under management for all asset types, with the exception of commodities ETFs, reached a new (month end) all-time high at the end of May.
ETF Flows by Asset Type
The inflows in the U.S. ETF industry for May (+$189.6 bn overall) were driven by equity ETFs (+$124.3 bn), followed by bond ETFs (+$60.4 bn), alternatives ETFs (+$3.4 bn), mixed assets ETFs (+$0.8 bn), commodities ETFs (+$0.7 bn), and money market ETFs (+$0.03 bn).
Graph 2: Estimated Net Sales by Asset Type, May 1 – May 31, 2026 (USD Billions)
Source: LSEG Lipper
Given the market environment, it was not surprising to see that equity ETFs enjoyed the highest estimated net inflows over the course of May. Since there were no asset types facing outflows over the course of May, it can be said that U.S. ETF investors are in risk-on mode.
Assets Under Management by Lipper Global Classifications
In order 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 May 2026, the U.S. ETF market was split into 137 different Lipper global classifications. The highest assets under management at the end of May were held by funds classified as Equity U.S. ($6,658.9 bn), followed by Equity Global ex U.S. ($1,261.5 bn), Equity U.S. Small & Mid Cap ($1,132.9 bn), Equity Sector Information Technology ($643.3 bn), and Bond USD Medium Term ($632.4 bn). These five classifications accounted for 65.75% of the overall assets under management in the U.S. ETF segment, while the 10-top classifications by assets under management accounted for 77.98%.
Overall, 16 of the 137 peer groups each accounted for more than 1% of assets under management. In total, these 16 peer groups accounted for $13,401.5 bn, or 85.31%, of the overall assets under management.
Graph 3: Ten Largest Lipper Global Classifications by Assets Under Management, May 31, 2026 (USD Billions)
Source: LSEG Lipper
In addition, it was noteworthy that the rankings of the largest classifications saw some movement in single positions over the last few years. As the positions of the classifications had been quite stable in the past, this indicates that U.S. investors use ETFs to trade according to their market views. Even as some of these positions might be core holdings, once investors got into risk-off mode they also reduced their exposure to core asset classes.
Despite the fact that the rankings at the top of the table show some changes from time to time, these numbers show that the assets under management by Lipper global classifications continued to be highly concentrated in the U.S. ETF industry.
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, May 31, 2026 (USD Billions)
Source: LSEG Lipper
ETF Flows by Lipper Global Classifications
The net inflows of the 10 best-selling Lipper classifications accounted for $166.5 bn. In line with the overall sales trend for May, equity peer groups (+$117.6 bn) led the flows by asset type on the table of the 10 best-selling Lipper global classifications by estimated net inflows. That said, it was somewhat surprising to see that the table of the 10 best-selling classifications for the month was split between four equity, five bond, and one alternatives classification. When it comes to this, it was not surprising that Equity U.S. (+$77.3 bn) was the best-selling Lipper global classification for May, which might be an additional sign that U.S. investors have switched back into risk-on mode after the market turmoil in March. Equity Sector Information Technology (+$23.4 bn) was the second best-selling classification, followed by Bond USD Medium Term (+$14.1 bn), Equity Global ex U.S. (+$11.0 bn), and Alternative Relative Value (+$7.7 bn).
Graph 5: Ten Best- and Worst-Lipper Global Classifications by Estimated Net Sales, May 1 – May 31, 2026 (USD Billions)
Source: LSEG Lipper
More generally, these numbers showed the U.S. ETF segment is also highly concentrated when it comes to fund flows by classification—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.
On the other side of the table, the 10 peer groups with the highest estimated net outflows for May 2026 accounted for $18.0 bn in outflows. These outflows were way lower compared to the numbers for April 2026 (-$33.4 bn).
Alternative Equity Leveraged (-$4.9 bn) was the Lipper classification with the highest outflows for the month. It was bettered by Equity Korea (-$3.1 bn), Alternative Cryptocurrency (-$2.3 bn), Equity Sector Financials (-$2.3 bn), and Equity Sector Gold & Precious Metals (-$1.2 bn).
A view of the list of the 10 Lipper global classifications with the highest estimated net outflows indicates that U.S. investors may have reduced the overall risk in their portfolios. In addition, they might have taken some profits from their investments in leveraged equity funds since investors might have played the recovery rally after the breakout of the conflict between the U.S. and Iran.
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 139 of the 490 ETF promoters in the U.S. holding assets at or above $1.0 bn, accounting for $15,639.9 bn. The largest ETF promoter in the U.S.—iShares ($4,545.9 bn)—accounted for 28.94% of the overall assets under management. Despite a comfortable lead as largest ETF promoter globally, iShares is closely followed by Vanguard ($4,491.1 bn), the number-two ETF promoter in the U.S. That said, the two largest ETF promoters in the U.S. have a comfortable lead over the number-three promoter—State Street SPDR ($2,073.5 bn).
Graph 6: The 10 Largest ETF Promoters by Assets Under Management, May 31, 2026 (USD Billions)
Source: LSEG Lipper
The 10-top promoters accounted for 88.41% of the overall assets under management in the U.S. ETF industry. This meant, in turn, the other 480 ETF promoters registering at least one ETF for sale in the U.S. accounted for only 11.59% of the overall assets under management.
ETF Flows by Promoters
Since the U.S. ETF market is highly concentrated when it comes to assets under management by promoter, it was not surprising that eight of the 10 largest promoters by assets under management were among the 10-top selling ETF promoters for May. Vanguard (+$54.1 bn) was the best-selling ETF promoter in the U.S. for the month, ahead of iShares (+$33.6 bn) and Invesco (+$16.7 bn).
Graph 7: Ten Best-Selling ETF Promoters, May 1 – May 31, 2026 (USD Billions)
Source: LSEG Lipper
The flows of the 10-top promoters accounted for estimated net inflows of $153.2 bn. As for the overall flow trend in May, it was clear that some of the 490 promoters (102) faced estimated net outflows (-$10.5 bn in total) over the course of the month.
Assets Under Management by ETFs
There were 5,277 instruments (primary share classes [5,203] and convenience share classes [74]) listed as ETFs registered for sales in the U.S. in the Lipper database at the end of May. Regarding the overall market pattern, it was not surprising assets under management at the ETF level were also highly concentrated. Only 1,020 of the 5,203 ETFs (primary share classes = portfolios) held assets more than $1.0 bn each. These ETFs accounted for $15,041.3 bn, or 95.75%, of the overall assets in the U.S. ETF industry. The 10 largest ETFs in the U.S. accounted for $4,779.5 bn, or 30.43%, of the overall assets under management.
Graph 8: The 10 Largest ETFs by Assets Under Management, May 31, 2026 (USD Billions)
Source: LSEG Lipper
Estimated Net Flows at ETF Level
A total of 2,710 of the 5,203 ETFs (primary share classes = portfolios) analyzed in this report showed net inflows of more than $10,000 each for May, accounting for inflows of $267.2 bn. This meant the other 2,493 instruments faced no flows, or net outflows, for the month. Upon closer inspection, 366 of the 2,710 ETFs posting net inflows enjoyed inflows of more than $100 m over the course of May—for a total of $230.2 bn. The best-selling ETF for May in the U.S. was Vanguard 500 Index Fund; ETF, which enjoyed estimated net inflows of $18.9 bn. It was followed by iShares Core S&P 500 ETF (+$15.5 bn) and State Street SPDR Portfolio S&P 500 ETF Trust (+$10.1 bn).
Graph 9: The 10 Best-Selling ETFs, May 1 – May 31, 2026 (Euro Billions)
Source: LSEG Lipper
The flow pattern at the fund level indicated there was a lot of turnover and rotation during the month, 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 44.87% of the overall inflows.
Given its size and the overall trend for net sales at the promoter level, it was surprising that only two of the 10 best-selling funds for May were issued by iShares, accounting for estimated net inflows of $22.3 bn. Meanwhile, iShares’ main competitor Vanguard issued three of the 10 best-selling ETFs in the U.S., which accounted for estimated net inflows of $27.2 bn.
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.
