The U.S. ETF industry enjoyed strong inflows over the course of September. Nevertheless, September 2026 marked a challenging month for global financial markets as investors confronted a combination of renewed geopolitical tensions, rising energy prices, persistent inflation pressures, and a more hawkish stance from major central banks. Equity markets delivered mixed performances across regions, while government bond markets experienced renewed volatility as expectations for interest rates shifted higher. Investor sentiment remained cautious but not outright bearish, reflecting continued economic resilience across major economies despite mounting risks.
The dominant geopolitical development was the escalation of tensions in the Middle East, which drove a sharp increase in oil and natural gas prices. Policymakers at the European Central Bank (ECB) noted that the conflict had materially altered the inflation outlook, with higher energy costs feeding into expectations for consumer prices across developed economies. Markets increasingly feared that what initially appeared to be a temporary commodity shock could evolve into a more prolonged inflationary episode.
These developments arrived at a time when governments across Europe, North America, and Asia were maintaining elevated fiscal spending. Defense expenditures, industrial policy initiatives, and infrastructure investments continued to support economic activity, helping offset weakening global trade. While fiscal expansion supported corporate earnings and employment, investors also worried that continued government spending could complicate efforts by central banks to return inflation to target.
The most significant monetary policy event came from the Federal Reserve. At its September meeting, the Fed raised interest rates by 25 basis points (bps), citing resilient economic growth, strong productivity gains, and inflation that remained above its long-term objective. The decision surprised investors who had expected the central bank to remain on hold, triggering a sharp repricing across bond markets.
As a result, U.S. Treasury yields climbed significantly during the month, with long-dated yields approaching cycle highs. Equity investors responded by reducing exposure to interest rate-sensitive sectors while maintaining positions in companies benefiting from artificial intelligence investment and strong earnings growth. Although major indices retreated modestly, market sentiment remained relatively constructive because recession concerns stayed limited.
In Europe, the ECB also tightened policy, as policymakers increased key interest rates by 25 bps after concluding that higher energy prices threatened to keep inflation above target for longer. The Governing Council acknowledged that economic growth remained moderate but judged inflation risks being the greater challenge. European government bond yields rose in response, while investors revised expectations for future monetary easing.
European equities proved relatively resilient despite higher borrowing costs. Investors were encouraged by ongoing fiscal support, defense spending, and improving corporate earnings. Financial stocks benefited from higher rates, while industrial companies continued to gain support from infrastructure and energy-transition investment programs. Market participation broadened beyond technology, helping European indices outperform many global peers.
Meanwhile, the Bank of Japan continued its gradual policy normalization process. Japanese equities remained among the strongest performers in developed markets, supported by corporate reforms, healthy earnings, and sustained domestic investment.
By the end of September, investor sentiment had become increasingly selective. Markets no longer expected a rapid return to lower interest rates, and both equity and bond investors focused on sectors and regions capable of navigating a higher-for-longer rate environment. The combination of geopolitical uncertainty, supportive fiscal policy, and renewed central bank tightening ultimately defined market performance throughout the month, reinforcing the view that inflation remained the principal challenge facing global investors.
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 $16,400.1 bn as of August 31, 2026, to $16,296.6 bn at the end of September). At a closer look, the decrease in assets under management of $103.5 bn for September 2026 was driven by the performance of the underlying markets (-$243.1 bn), while the estimated net inflows added another $139.6 bn to the increase of 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 ($12,581.5 bn) held the majority of assets, followed by bond ETFs ($2,640.7 bn), alternatives ETFs ($664.1 bn), commodities ETFs ($341.6 bn), mixed-assets ETFs ($42.1 bn), and money market ETFs ($26.6 bn).
Graph 1: Market Share, Assets Under Management in the U.S. ETF Industry by Asset Type, September 30, 2026
Source: LSEG Lipper
Given the volatile market environment over the course of the month, it was 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 September 2026. When it comes to this, it is noteworthy that the assets under management for alternatives, equities, mixed-assets, and money market ETFs reached a new (month end) all-time high at the end of September.
ETF Flows by Asset Type
The inflows in the U.S. ETF industry for September (+$139.6 bn overall) were driven by equity ETFs (+$62.5 bn), followed by bond ETFs (+$58.0 bn), alternatives ETFs (+$11.0 bn), commodities ETFs (+$4.6 bn), mixed-assets ETFs (+$3.4 bn), and money market ETFs (+$0.2 bn).
Graph 2: Estimated Net Sales by Asset Type, September 1 – September 30, 2026 (USD Billions)
Source: LSEG Lipper
Given the market environment, it was in line with expectations to see that equity ETFs enjoyed the highest estimated net inflows over the course of September. That said, the strong inflows into bond ETFs were somewhat surprising, and the fund flows by asset type indicate that U.S. 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 September 2026, the U.S. ETF market was split into 137 different Lipper global classifications. The highest assets under management at the end of September were held by funds classified as Equity U.S. ($6,929.6 bn), followed by Equity Global ex U.S. ($1,321.7 bn), Equity U.S. Small & Mid Cap ($1,140.8 bn), Equity Sector Information Technology ($689.3 bn), and Bond USD Medium Term ($650.4 bn). These five classifications accounted for 65.85% of the overall assets under management in the U.S. ETF segment, while the 10-top classifications by assets under management accounted for 78.09%.
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 $13,901.4 bn, or 85.30%, of the overall assets under management.
Graph 3: Ten Largest Lipper Global Classifications by Assets Under Management, September 30, 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 ETFs 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, September 30, 2026 (USD Billions)
Source: LSEG Lipper
ETF Flows by Lipper Global Classifications
The net inflows of the 10 best-selling Lipper classifications accounted for $101.0 bn. In line with the overall sales trend for September, bond peer groups (+$52.8 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 led by bond classifications as there were also six bond, and only four equities, classifications on the table. When it comes to this, it was somewhat surprising that Equity Global ex U.S. (+$19.9 bn) was the best-selling Lipper global classification for September, which might be seen as a sign that U.S. investors are somewhat looking for diversification given the market volatility. Equity U.S. (+$14.8 bn) was the second best-selling classification, followed by Bond USD Government Short Term (+$14.7 bn), Bond USD Medium Term (+$10.4 bn), and Bond USD Municipal (+$9.6 bn).
Graph 5: Ten Best- and Worst-Lipper Global Classifications by Estimated Net Sales, September 1 – September 30, 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 September 2026 accounted for $15.3 bn in outflows. These outflows were higher than the outflow numbers for August (-$14.3 bn).
Bond USD Corporates (-$4.6 bn) was the Lipper classification with the highest outflows for the month. It was bettered by Alternative Equity Leveraged (-$2.5 bn), Equity Korea (-$1.6 bn), Bond Emerging Markets Global in Hard Currencies (-$1.3 bn), and Equity Sector Gold and Precious Metals (-$1.3 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 ETFs from non-core asset classes.
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 140 of the 517 ETF promoters in the U.S. holding assets at or above $1.0 bn, accounting for $16,217.2 bn. The largest ETF promoter in the U.S.—iShares ($4,648.9 bn)—accounted for 28.53% of the overall assets under management. Despite a comfortable lead as largest ETF promoter globally, iShares is closely followed by Vanguard ($4,625.1 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 ($2,126.0 bn).
Graph 6: The 10 Largest ETF Promoters by Assets Under Management, September 30, 2026 (USD Billions)
Source: LSEG Lipper
When it comes 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 assets under management of the 10-top promoters accounted for $14,341.8 bn, or 88.00%, of the overall assets under management in the U.S. ETF industry. This meant, in turn, the other 507 ETF promoters registering at least one ETF for sale in the U.S. accounted for only 12.00% 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 seven of the 10 largest promoters by assets under management were among the 10-top selling ETF promoters for September. iShares (+$47.8 bn) was the best-selling ETF promoter in the U.S. for the month, ahead of Vanguard (+$21.7 bn) and State Street SPDR (+$16.3 bn).
Graph 7: Ten Best-Selling ETF Promoters, September 1 – September 30, 2026 (USD Billions)
Source: LSEG Lipper
The flows of the 10-top promoters accounted for estimated net inflows of $113.8 bn. As for the overall flow trend in September, it was clear that some of the 517 promoters (123) faced estimated net outflows (-$10.7 bn in total) over the course of the month.
Assets Under Management by ETFs
There were 5,688 instruments (primary share classes [5,598] and convenience share classes [90]) listed as ETFs registered for sales in the U.S. in the Lipper database at the end of September. Regarding the overall market pattern, it was not surprising assets under management at the ETF level were also highly concentrated. Only 1,054 of the 5,598 ETFs (primary share classes = portfolios) held assets more than $1.0 bn each. These ETFs accounted for $15,495.6 bn, or 95.08%, of the overall assets in the U.S. ETF industry. The 10 largest ETFs in the U.S. accounted for $4,924.8 bn, or 30.22%, of the overall assets under management.
Graph 8: The 10 Largest ETFs by Assets Under Management, September 30, 2026 (USD Billions)
Source: LSEG Lipper
With regard to assets under management at the ETF level, it is noteworthy that the Vanguard S&P 500 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. Nevertheless, VOO reached and maintained the level above $1.0 trn from July and held $1,032.3 bn in assets under management at the end of September. 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 2,865 of the 5,688 ETFs (primary share classes = portfolios) analyzed in this report showed net inflows of more than $10,000 each for September, accounting for inflows of $227.2 bn. This meant the other 2,823 instruments faced no flows, or net outflows, for the month. Upon closer inspection, 345 of the 2,865 ETFs posting net inflows enjoyed inflows of more than $100 m over the course of September—for a total of $190.6 bn. The best-selling ETF for September in the U.S. was iShares 0-3 Month Treasury Bond ETF, which enjoyed estimated net inflows of $6.3 bn. It was followed by Vanguard Morningstar Total Stock Market ETF (+$6.1 bn) and iShares Universal USD Bond ETF (+$5.6 bn).
Graph 9: The 10 Best-Selling ETFs, September 1 – September 30, 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 $45.7 bn, or 32.82%, of the overall inflows.
Given its size and the overall trend for net sales at the promoter level, it was somewhat surprising that five of the 10 best-selling funds for September were issued by iShares, accounting for estimated net inflows of $24.7 bn. While, iShares’ main competitor Vanguard issued only two of the 10 best-selling ETFs in the U.S., which accounted for estimated net inflows of $11.5 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 Lipper or LSEG.
