January 2026 was another month with strong inflows for the U.S. ETF industry.
These inflows occurred in a complex mix of geopolitical tension, unchanged central bank paths, and shifting fiscal narratives that collectively shaped global equity and bond markets. Despite recurring volatility, investor sentiment across major markets remained cautiously constructive, buoyed by resilient economic data and still‑supportive financial conditions.
Geopolitics was the dominant macro-overhang. The month saw U.S. military action in Venezuela, renewed threats of strikes on Iran, and escalating friction between Washington and NATO allies over Greenland, adding layers of uncertainty, particularly for energy and commodity markets. These tensions helped propel oil prices higher and contributed to a weaker U.S. dollar mid‑month before a sharp rebound. European markets felt the spillover through elevated risk premiums and heightened sensitivity to U.S.–EU trade rhetoric, especially with tariff threats resurfacing.
Within this environment the Federal Reserve held rates stable at 3.50%–3.75% at its January meeting, signalling a pause after its 2025 interest rate easing amid still elevated inflation and a softening but resilient labor market.
In line with the Federal Reserve, the European Central Bank (ECB) remained also on hold, even as Eurozone inflation (1.9%) fell under the ceiling of the ECB inflation target in December. The same is true for the Bank of England (BoE), as the BoE kept its rate stable, after lowering interest rates by 25 basis points (bps) to 3.75% in December. The Bank of Japan (BoJ) kept its policy rate also stable in January, as the BoJ hiked its policy rate to a 30-year high at 0.75% in December 2025.
Fiscal policy also shaped the performance of the securities markets. The U.S. continued to run large deficits, raising expectations of elevated Treasury issuance that contributed to a further steepening in the U.S. yield curve. In Europe, fiscal consolidation efforts were more measured, with Germany’s economic indicators improving and yields rising accordingly. The Eurozone’s more disciplined stance kept spreads stable, supporting a relatively favorable environment for corporate credit.
The overall somewhat positive macro indicators led to a positive start of the year for equities globally, while markets absorbed negative news with remarkable composure. At the same time, bond markets delivered mixed returns, with long‑dated yields rising globally—most notably in Japan—while Germany remained an exception. Corporate bonds fared better as spreads narrowed in line with healthy balance sheets and steady economic momentum.
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 $13,476.3 bn as of December 31, 2025, to $13,997.8 bn at the end of January 2026). At a closer look, the increase in assets under management of $521.0 bn for January 2026 was driven by the performance of the underlying markets (+$363.1 bn), while estimated net inflows added (+$158.0 bn) to the increase in 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 ($10,680.5 bn) held the majority of assets, followed by bond ETFs ($2,335.2 bn), alternatives ETFs ($536.1 bn), commodities ETFs ($408.3 bn), mixed-assets ETFs ($31.9 bn), and money market ETFs ($5.7 bn).
Graph 1: Market Share, Assets Under Management in the U.S. ETF Industry by Asset Type, January 31, 2026
Source: LSEG Lipper
Given the volatile but positive market environment over the course of the year, it is no surprise that the overall assets under management in the U.S. ETF industry ($13,997.8 bn) hit a new (month end) all-time high at the end of January 2026. When it comes to this, it is noteworthy that the assets under management for all asset types, with the exception of alternatives, reached also a new (month end) all-time high at the end of January.
ETF Flows by Asset Type
The inflows in the U.S. ETF industry for January 2026 were driven by equity ETFs (+$99.9 bn), followed by bond ETFs (+$52.2 bn), commodities ETFs (+$5.5 bn), mixed-assets ETFs (+$1.1 bn), and money market ETFs (+$0.2 bn), while alternatives ETFs (-$1.0 bn) was the only asset type facing outflows for the month.
Graph 2: Estimated Net Sales by Asset Type, January 1 – January 31, 2026 (USD Billions)
Source: LSEG Lipper
Given the market environment, it was no surprise to see that equity ETFs led had the highest estimated net inflows over the course of January.
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 January 2026, the U.S. ETF market was split into 136 different peer groups. The highest assets under management at the end of January were held by funds classified as Equity U.S. ($5,861.7 bn), followed by Equity Global ex U.S. ($1,121.2 bn), Equity U.S. Small & Mid Cap ($1,014.3 bn), Bond USD Medium Term ($596.3 bn), and Equity U.S. Income ($489.0 bn). These five peer groups accounted for 64.89% of the overall assets under management in the U.S. ETF segment, while the 10-top classifications by assets under management accounted for 77.36%.
Overall, 15 of the 136 peer groups each accounted for more than 1% of assets under management. In total, these 15 peer groups accounted for $11,769.6 bn, or 84.08%, of the overall assets under management.
Graph 3: Ten Largest Lipper Global Classifications by Assets Under Management, January 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 league 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, January 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 $106.4 bn. In line with the overall sales trend for January 2026, equity peer groups (+$71.2 bn) dominated the flows by asset type on the table of the 10 best-selling peer groups by estimated net inflows. That said, it was not surprising to see three bond classifications on the table of the 10 best-selling classifications for the month, given the general market sentiment. Given the overall fund flow trend in the U.S. ETF industry, it was somewhat surprising that Equity Emerging Markets (+$18.8 bn) was the best-selling Lipper global classification for January, as this spot has been reserved for Equity U.S. in the past which came in second (+$18.1 bn). The two leading classifications were followed by Equity Global ex U.S. (+$17.4 bn), Bond USD Medium Term (+$16.8 bn), and Equity Sector Industrials (+$7.2 bn).
Generally speaking, it was surprising that Equity Emerging Markets Global took the top spot on the table of the 10 best-selling Lipper classifications for the month. This may indicate that U.S. investors have started to diversify their portfolios, since a lot of international equity markets seem to perform better than the U.S..
The slight outflows from cryptocurrencies (Alternative Cryptocurrency -$1.0 bn) show that U.S. investors may still see the cryptocurrencies such as bitcoin or ethereum as appropriate instruments for the storage of value despite the somewhat negative market sentiment and the sluggish performance of bitcoin. Despite this, the relatively low outflows can be interpreted as a sign for a rather institutional usage of crypto ETFs.
Graph 5: Ten Best- and Worst-Lipper Global Classifications by Estimated Net Sales, January 1 – January 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. 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.
On the other side of the table, the 10 peer groups with the highest estimated net outflows for January 2026 accounted for $16.6 bn in outflows.
Alternative Equity Leveraged (-$8.4 bn) was the Lipper classification with the highest outflows for the month. It was bettered by Equity U.S. Small & Mid Cap (-$2.9 bn), Equity Sector Consumer Discretionary (-$1.4 bn), Equity Sector Utilities (-$1.1 bn), and Alternative Cryptocurrency (-$1.0 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 123 of the 468 ETF promoters in the U.S. holding assets at or above $1.0 bn, accounting for $13,933.0 bn. The largest ETF promoter in the U.S.—iShares ($4,146.9 bn)—accounted for 29.63% of the overall assets under management. Despite a comfortable lead as largest ETF promoter globally, iShares is somewhat closely followed by Vanguard ($4,003.8 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 ($1,904.8 bn).
Graph 6: The 10 Largest ETF Promoters by Assets Under Management, January 31, 2026 (USD Billions)
Source: LSEG Lipper
The 10-top promoters accounted for 89.17% of the overall assets under management in the U.S. ETF industry. This meant, in turn, the other 468 fund promoters registering at least one ETF for sale in Europe accounted for only 10.83% 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 January 2026. Vanguard was the best-selling ETF promoter in the U.S. for the month (+$49.3 bn), ahead of iShares (+$20.0 bn) and Invesco (+$10.2 bn).
Graph 7: Ten Best-Selling ETF Promoters, January 1 – January 31, 2026 (USD Billions)
Source: LSEG Lipper
The flows of the 10-top promoters accounted for estimated net inflows of $121.6 bn. As for the overall flow trend in January, it was clear that some of the 468 promoters (86) faced estimated net outflows (-$9.6 bn in total) over the course of the month.
Assets Under Management by ETFs
There were 4,939 instruments (primary share classes [4,869] and convenience share classes [70]) listed as ETFs registered for sales in the U.S. in the Lipper database at the end of January 2026. Regarding the overall market pattern, it was not surprising assets under management at the ETF level were also highly concentrated. Only 942 of the 4,869 ETFs (primary share classes = portfolios) held assets above $1.0 bn each. These ETFs accounted for $13,376.7 bn, or 95.56%, of the overall assets in the U.S. ETF industry. The 10 largest ETFs in the U.S. accounted for $4,253.3 bn, or 30.39%, of the overall assets under management.
Graph 8: The 10 Largest ETFs by Assets Under Management, January 31, 2025 (USD Billions)
Source: LSEG Lipper
Estimated Net Flows at ETF Level
A total of 2,752 of the 4,869 ETFs (primary share classes = portfolios) analyzed in this report showed net inflows of more than $10,000 each for January 2026, accounting for inflows of $57.8 bn. This meant the other 2,117 instruments faced no flows, or net outflows, for the month. Upon closer inspection, 419 of the 2,752 ETFs posting net inflows enjoyed inflows of more than $100 m over the course of January—for a total of $224.7 bn. The best-selling ETF for January in the U.S. was Vanguard 500 Index Fund; ETF, which enjoyed estimated net inflows of $10.7 bn. It was followed by iShares Core MSCI Emerging Markets ETF (+$9.1 bn) and State Street SPDR Portfolio S&P 500 ETF (+$8.0 bn).
Graph 9: The 10 Best-Selling ETFs, January 1 – January 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 year, 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 36.76% of the overall inflows.
Given its size and the overall trend for net sales at the promoter level, it was somewhat surprising that only three of the 10 best-selling funds for January were issued by iShares. These iShares ETFs accounted for estimated net inflows of $13.1 bn. Meanwhile iShares main competitor Vanguard issued four of the 10 best-selling ETFs in the U.S. which accounted for estimated net inflows of $28.7 bn. This shows that Vanguard may slowly closing the gap on the league table of the best-selling ETF promoters in the U.S.
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.
