The U.S. ETF industry enjoyed strong inflows over the course of July. These inflows occurred while global financial markets made little overall progress, but the modest headline moves concealed a sharp change in leadership. Renewed tension between the United States and Iran drove oil prices higher, revived inflation fears, and pushed government bond yields up. At the same time, investors moved away from highly valued technology shares and towards energy, financial, and other value-oriented sectors.
Geopolitics once again supplied the month’s main shock. The resumption of U.S.-Iran hostilities raised concerns about oil production and shipping through the Middle East. Brent and West Texas Intermediate crude rose by more than 20%, reversing much of June’s decline. Energy shares benefited, but the rise in oil complicated the outlook for inflation and economic growth, particularly in energy-importing Europe and Japan. Markets nevertheless appeared to assume that the confrontation would stop short of another full-scale disruption to global supplies.
In the United States, the Federal Reserve kept the federal funds target at 3.50% to 3.75% during its July meeting. Its statement described economic activity as solid but said inflation remained above the 2% objective, partly because of supply-driven increases in energy prices. The decision exposed a notable division within the Federal Open Market Committee: three members voted for an immediate quarter-point increase. That split strengthened expectations that U.S. rates could remain high for longer and contributed to rising Treasury yields.
The European Central Bank also remained on hold, leaving its deposit rate at 2.25% during its July meeting after raising it by 25 basis points (bps) in June. The ECB warned that energy prices were still well above their pre-conflict levels and that the full inflationary effects had yet to emerge. Its balance-sheet reduction continued as maturing bonds under the APP and PEPP programs were no longer reinvested. That combination of restrictive rates and declining central-bank holdings limited support for eurozone government debt, even as subdued growth restrained the rise in yields.
The Bank of Japan maintained its overnight rate at around 1% during its July meeting. The Bank of Japan (BoJ) expected higher oil prices, wage increases, semiconductor costs, and the weaker yen to keep inflation above 2% during the second half of the fiscal year. Japanese bonds, therefore, remained vulnerable to expectations of additional tightening.
With regard to this, it was no surprise that global government and corporate bonds declined in general.
Fiscal policy added another source of unease. Higher defense and infrastructure spending supported parts of the European economy, but expanding borrowing requirements left sovereign markets sensitive to debt sustainability and issuance. In Japan, government measures to reduce household energy bills moderated the near-term inflation forecast but transferred part of the burden to the public finances.
Equity performance reflected these shifts, as investors questioned whether the earnings generated by artificial-intelligence investment justified elevated technology valuations. Energy and financial companies advanced instead, supported by higher commodity prices, resilient earnings, and more moderate valuations. As a result, U.S. shares were broadly flat, with the S&P 500 losing 0.1%, while markets outside the United States performed better. Hence, the MSCI World Index gained 0.5% in U.S. dollar terms over the course of the month.
July’s message was clearest in the bond market. The inflation shock had not passed, central banks were reluctant to ease, and governments still needed substantial financing. Equities absorbed that combination through a rotation rather than a broad selloff. Bonds had less room to escape.
From a U.S. ETF industry perspective, the estimated net flows led, in combination with the performance of the underlying markets, to decreasing assets under management (from $15,819.4 bn as of June 30, 2026, to $15,785.9 bn at the end of July). At a closer look, the decrease in assets under management of $33.5 bn for July 2026 was driving the negative performance of the underlying markets which deducted $221.5 bn from the assets under management, while the estimated net inflows contributed $188.0 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 ($12,248.0 bn) held the majority of assets, followed by bond ETFs ($2,589.4 bn), alternatives ETFs ($572.9 bn), commodities ETFs ($313.4 bn), mixed-assets ETFs ($38.0 bn), and money market ETFs ($24.3 bn).
Graph 1: Market Share, Assets Under Management in the U.S. ETF Industry by Asset Type, July 31, 2026
Source: LSEG Lipper
Given the volatile and on average negative market environment over the course of the month, it is not surprising that the overall assets under management in the U.S. ETF industry did not hit a new (month end) all-time high at the end of July 2026. When it comes to this, it is noteworthy that the assets under management for bond and mixed-assets ETFs reached a new (month end) all-time high at the end of July despite the overall market trend.
ETF Flows by Asset Type
The inflows in the U.S. ETF industry for July (+$188.0 bn overall) were driven by equity ETFs (+$118.1 bn), followed by bond ETFs (+$53.6 bn), alternatives ETFs (+$17.4 bn), commodities ETFs (+$1.2 bn), and mixed-assets ETFs (+$0.7 bn), while money market ETFs (-$3.1 bn) faced outflows.
Graph 2: Estimated Net Sales by Asset Type, July 1 – July 31, 2026 (USD Billions)
Source: LSEG Lipper
Given the market environment, it was somewhat surprising to see that equity ETFs enjoyed the highest estimated net inflows over the course of July. That said, it was also surprising to see that U.S. investors further sold money market ETFs in this market environment, since money market is considered a safe haven investment.
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 July 2026, the U.S. ETF market was split into 137 different Lipper global classifications. The highest assets under management at the end of July were held by funds classified as Equity U.S. ($6,677.2 bn), followed by Equity Global ex U.S. ($1,287.4 bn), Equity U.S. Small & Mid Cap ($1,166.3 bn), Bond USD Medium Term ($650.0 bn), and Equity Sector Information Technology ($621.3 bn). These five classifications accounted for 65.90% of the overall assets under management in the U.S. ETF segment, while the 10-top classifications by assets under management accounted for 78.05%.
Overall, 15 of the 137 peer groups each accounted for more than 1% of assets under management. In total, these 15 peer groups accounted for $13,311.6 bn, or 84.33%, of the overall assets under management.
Graph 3: Ten Largest Lipper Global Classifications by Assets Under Management, July 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 ETF promoters.
Graph 4: Ten Smallest Lipper Global Classifications by Assets Under Management, July 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 $142.3 bn. In line with the overall sales trend for July, equity peer groups (+$98.6 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 five equity, three bond, and two alternatives classifications. When it comes to this, it was not surprising that Equity U.S. (+$46.0 bn) was the best-selling Lipper global classification for July, which might be an additional sign that U.S. investors are further in risk-on mode despite some market volatility. Equity Sector Information Technology (+$18.3 bn) was the second best-selling classification, followed by Equity Global ex U.S. (+$17.6 bn), Bond USD Medium Term (+$11.8 bn), and Equity U.S. Income (+$10.2 bn).
Graph 5: Ten Best- and Worst-Lipper Global Classifications by Estimated Net Sales, July 1 – July 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 July 2026 accounted for $10.4 bn in outflows. These outflows could be considered as low compared to the numbers for June 2026 (-$21.1 bn).
Money Market USD (-$3.1 bn) was the Lipper classification with the highest outflows for the month. It was bettered by Equity Global ex US Small & Mid Cap (-$1.9 bn), Alternative Dedicated Short Bias (-$1.4 bn), Equity China (-$0.9 bn), and Equity Sector Materials (-$0.8 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, as they sold alternative assets and non-core equities.
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 141 of the 505 ETF promoters in the U.S. holding assets at or above $1.0 bn, accounting for $15,712.6 bn. The largest ETF promoter in the U.S.—iShares ($4,551.4 bn)—accounted for 28.83% of the overall assets under management. Despite a comfortable lead as largest ETF promoter globally, iShares is closely followed by Vanguard ($4,528.3 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 ($2,084.3 bn).
Graph 6: The 10 Largest ETF Promoters by Assets Under Management, July 31, 2026 (USD Billions)
Source: LSEG Lipper
With regard to this, it is noteworthy that Vanguard had overtaken iShares as leading ETF promoter by assets under management during June but was not able to maintain that position until the end of the month. This shows that even the positions of the largest ETF promoters can become a subject of change over time.
The 10-top promoters accounted for 88.42% of the overall assets under management in the U.S. ETF industry. This meant, in turn, the other 495 ETF promoters registering at least one ETF for sale in the U.S. accounted for only 11.58% 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 July. Vanguard (+$52.3 bn) was the best-selling ETF promoter in the U.S. for the month, ahead of State Street SPDR (+$33.9 bn) and iShares (+$21.1 bn).
Graph 7: Ten Best-Selling ETF Promoters, July 1 – July 31, 2026 (USD Billions)
Source: LSEG Lipper
The flows of the 10-top promoters accounted for estimated net inflows of $147.1 bn. As for the overall flow trend in July, it was clear that some of the 505 promoters (127) faced estimated net outflows (-$7.2 bn in total) over the course of the month.
Assets Under Management by ETFs
There were 5,580 instruments (primary share classes [5,500] and convenience share classes [80]) listed as ETFs registered for sales in the U.S. 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 1,025 of the 5,500 ETFs (primary share classes = portfolios) held assets more than $1.0 bn each. These ETFs accounted for $15,101.7 bn, or 95.67%, of the overall assets in the U.S. ETF industry. The 10 largest ETFs in the U.S. accounted for $4,771.0 bn, or 30.22%, of the overall assets under management.
Graph 8: The 10 Largest ETFs by Assets Under Management, July 31, 2026 (USD Billions)
Source: LSEG Lipper
With regard to assets under management at the ETF level it is noteworthy that the Vanguard 500 Index Fund; ETF (VOO) has passed the $1.0 trn milestone for the first time at the beginning of June 2026, but the ETF could not hold that level over the course of the month, as the ETF faced outflows over the course of the month. To learn more about this, please read: Vanguard S&P 500 ETF (VOO) – The First ETF With More Than $1.0 trn in Assets Under Management.
Estimated Net Flows at ETF Level
A total of 2,916 of the 5,500 ETFs (primary share classes = portfolios) analyzed in this report showed net inflows of more than $10,000 each for July, accounting for inflows of $266.8 bn. This meant the other 2,584 instruments faced no flows, or net outflows, for the month. Upon closer inspection, 364 of the 2,916 ETFs posting net inflows enjoyed inflows of more than $100 m over the course of July—for a total of $230.1 bn. The best-selling ETF for July in the U.S. was Vanguard 500 Index Fund; ETF (VOO), which enjoyed estimated net inflows of $19.0 bn. It was followed by State Street SPDR S&P 500 ETF Trust (+$14.4 bn) and State Street SPDR Portfolio S&P 500 ETF (+$8.2 bn).
Graph 9: The 10 Best-Selling ETFs, July 1 – July 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 42.71% of the overall inflows.
Given its size and the overall trend for net sales at the promoter level, it was surprising that only three of the 10 best-selling funds for July were issued by iShares, accounting for estimated net inflows of $15.9 bn. Meanwhile, iShares’ main competitor Vanguard issued two of the 10 best-selling ETFs in the U.S., which accounted for estimated net inflows of $25.8 bn.
This article is for information purposes only and does not constitute any investment advice.
The views expressed are the views of the author, not necessarily those of LSEG.
