The European ETF industry enjoyed strong inflows over the course of the first half of 2026, a period which was dominated by macroeconomic themes. Geopolitics, inflation, fiscal sustainability, and monetary policy were driving the markets. Within this environment global equities finished the period close to record highs, and bond markets experienced significant volatility as investors reassessed inflation risks and the outlook for interest rates.
The biggest catalyst was the conflict in Iran and the disruption of shipping through the Strait of Hormuz. The closure of a route that carries a significant share of global oil exports sent energy prices sharply higher during the spring and reignited concerns that inflation would prove more persistent than previously expected. The resulting rise in oil, transport and insurance costs affected economies across the globe, forcing investors to re-evaluate the trajectory of growth and inflation.
Political developments helped reverse part of that shock by June. Diplomatic progress between the United States and Iran led to an agreement that reopened the Strait of Hormuz, triggering a steep decline in oil prices and easing fears of a prolonged supply disruption. Brent crude retreated toward pre-conflict levels, improving investor sentiment and supporting a broad rally in risk assets.
Monetary policy diverged substantially across the major economies. The Federal Reserve was at the center of another important political development during the first half of 2026: the arrival of Kevin Warsh as the new Fed Chair. Warsh succeeded Jerome Powell in May, marking the beginning of a new chapter for U.S. monetary policy. Despite the leadership change, the Fed spent most of the period holding interest rates in the 3.50% to 3.75% range as policymakers grappled with the inflationary effects of the Middle East energy shock and a still resilient labor market. By mid-year, investors had largely abandoned expectations of imminent rate cuts and instead focused on the possibility that U.S. interest rates would remain elevated for longer than previously anticipated. The shift contributed to higher Treasury yields and periodic volatility in both bond and equity markets.
The European Central Bank moved in the opposite direction. After initially pausing its easing cycle, the ECB became increasingly concerned about renewed inflationary pressures linked to higher energy costs. In June it raised rates, signalling that price stability had once again become its primary concern despite weaker growth prospects across parts of the euro area. The move marked one of the most important policy shifts of the year and underscored the differing inflation dynamics between Europe and the United States.
Japan also moved away from ultra-loose monetary policy. The Bank of Japan continued its normalization process and raised rates to levels not seen since the mid-1990s. Higher inflation and concern over yen weakness encouraged policymakers to continue tightening, ending an era in which Japan had stood apart from the global rate cycle.
Fiscal policy remained a significant concern throughout the period. As bond yields rose in response to inflation concerns and central-bank policy uncertainty, debt-servicing costs increased across major economies. Investors increasingly scrutinized government borrowing plans, particularly in the United States and Europe, contributing to periodic bouts of bond-market volatility.
Equity markets proved remarkably resilient. Artificial intelligence remained the dominant investment theme, although leadership shifted from the largest technology platforms toward semiconductor, memory, and infrastructure providers benefiting from AI spending. European shares outperformed during periods when oil prices fell, while U.S. equities were supported by strong corporate earnings and persistent investor demand for technology-related assets. By the end of June, many major indices were trading near record highs despite the geopolitical turbulence earlier in the year.
Bond markets told a more complicated story. Sovereign yields climbed sharply during the energy shock before stabilizing as oil prices retreated. Investors remained cautious, given continued inflation uncertainty, fiscal pressures, and increasingly divergent central bank policies. Global government bonds delivered mixed returns, while corporate credit generally held up better thanks to resilient economic growth and healthy corporate balance sheets.
By the end of H1 2026, investors had become cautious over sector and single company risks but were still in risk-on mode. The focus shifted to whether inflation would continue to moderate and whether central banks could engineer a soft landing while governments grappled with growing fiscal burdens.
Assets Under Management in the U.S. ETF Industry
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 $13,475.2 bn as of December 31, 2025, to $15,817.7 bn at the end of June 2026). At a closer look, the increase in assets under management of $2,342.4 bn for H1 2026 was driven by the performance of the underlying markets (+$1,323.2 bn), while estimated net inflows added $1,019.2 bn to the growth of the assets under management.
Graph 1: Assets Under Management in the U.S. ETF Industry, December 31, 2025 – June 30, 2026 (in bn USD)
Source: LSEG Lipper
As for the overall structure of the U.S. ETF industry, it was not surprising equity ETFs ($12,272.2 bn) held the majority of assets, followed by bond ETFs ($2,566.3 bn), alternatives ETFs ($603.9 bn), commodities ETFs ($310.3 bn), mixed-assets ETFs ($37.7 bn), and money market ETFs ($27.3 bn).
Graph 2: Market Share, Assets Under Management in the U.S. ETF Industry by Asset Type, June 30, 2026
Source: LSEG Lipper
Given the volatile market environment over the course of the first six months of 2026, it is 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 June 2026. Conversely, it is noteworthy that the assets under management for all asset types with the exception of alternatives and commodities ETFs reached a new (month end) all-time high at the end of June.
ETF Flows by Asset Type
The U.S. ETF industry saw strong inflows (+$1,019.2 bn) over the course of H1 2026. The flow pattern over the course of the first quarter shows that the inflows into ETFs slowed down as the geopolitical tensions in the Middle East intensified over the course of March and returned to a high level from April onwards.
Graph 3: Monthly Estimated Net Sales, January 1, 2026 – June 30, 2026 (USD Billions)
Source: LSEG Lipper
The already impressive estimated net flows for February (+$191.1 bn) and May (+$189.8 bn) were topped by the inflows in June (+$206.1 bn). To put this into perspective, the inflows into ETFs over the course of February and June 2026 were higher than the full-year inflows into ETFs over the course of 2013 (+$190.1 bn).
The inflows in the U.S. ETF industry for H1 2026 (+$1,019.2 bn overall) were driven by equity ETFs (+$664.0 bn), followed by bond ETFs (+$297.0 bn), alternatives ETFs (+$35.8 bn), money market ETFs (+$21.8 bn), and mixed-assets ETFs (+$5.9 bn). On the other side of the table, commodities ETFs (-$5.4 bn) faced outflows.
Graph 4: Estimated Net Sales by Asset Type, January 1 – June 30, 2026 (USD Billions)
Source: LSEG Lipper
Given the market environment, it was somewhat surprising to see that equity ETFs enjoyed by far the highest estimated net inflows over the course of H1 2026. That said, money market ETFs saw lower than expected estimated net inflows despite their status as safe-haven products. Nevertheless, the inflows into money market products might be a sign that some U.S. investors have started to put some money on the sidelines as a risk-off move in an environment with increasing fiscal and geopolitical tensions.
As graph 5 shows, bond and equity ETFs enjoyed inflows in each of the six months of the first half of 2026. The graph also shows that the inflows in bond and equity ETFs were stable over the course of January and February and slowed down over the course of March. The flows for equity returned from April to a stable pattern on a higher level for the rest of H1 2026. Conversely, the inflows into bond ETFs slowed further down in April before returning to a stable pattern on the same level as before the slowdown. The slowdown in March was mainly driven by the start of the war in the Middle East. Nevertheless, the flows in equity ETFs stayed positive, which once again showed the resilience of ETF flows in times of market turmoil. This might be seen as a sign that European investors like the liquidity, tradability, and transparency of ETFs, especially in times when markets are rough.
Graph 5: Monthly Estimated Net Sales by Asset Type, January 1, 2026 – June 30, 2026 (USD billions)
Source: LSEG Lipper
These flows showed that the adoption of ETFs by all kind of investors is further increasing in the U.S. despite the fact that these products are already household products and used by a large percentage of U.S. investors.
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 June 2026, the U.S. ETF market was split into 137 different Lipper global classifications. The highest assets under management at the end of June were held by funds classified as Equity U.S. ($6,689.5 bn), followed by Equity Global ex U.S. ($1,262.6 bn), Equity U.S. Small & Mid Cap ($1,184.5 bn), Equity Sector Information Technology ($670.0 bn), and Bond USD Medium Term ($647.3 bn). These five classifications accounted for 66.09% of the overall assets under management in the U.S. ETF segment, while the 10-top classifications by assets under management accounted for 78.08%.
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 $13,527.6 bn, or 85.52%, of the overall assets under management.
Graph 6: Ten Largest Lipper Global Classifications by Assets Under Management, June 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 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 7: Ten Smallest Lipper Global Classifications by Assets Under Management, June 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 $762.7 bn. In line with the overall sales trend for H1 2026, equity peer groups (+$563.8 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 only six equity classifications on the table of the 10 best-selling classifications for H1 2026 given the overall fund flow trend. As to be expected, Equity U.S. (+$297.0 bn) was the best-selling Lipper global classification for H1 2026, followed by Equity Global ex U.S. (+$94.0 bn), Bond USD Medium Term (+$74.6 bn), Equity Sector Information Technology (+$64.2 bn), and Bond USD Government Short Term (+$46.6 bn).
Graph 8: Ten Best- and Worst-Lipper Global Classifications by Estimated Net Sales, January 1 – June 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. 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 H1 2026 accounted for $51.9 bn in outflows.
Alternative Equity Leveraged (-$20.6 bn) was the Lipper classification with the highest outflows for the month. It was bettered by Commodity Precious Metals (-$11.5 bn), Alternative Cryptocurrency (-$3.7 bn), Equity Sector Financials (-$3.4 bn), and Equity Sector Consumer Discretionary (-$3.0 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 by selling dedicated sector and emerging markets investments. In addition, they might have taken some profits from their investments in gold.
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 138 of the 496 ETF promoters in the U.S. holding assets at or above $1.0 bn, accounting for $15,744.8 bn. The largest ETF promoter in the U.S.—iShares ($4,586.7 bn)—accounted for 29.00% of the overall assets under management. Despite a comfortable lead as largest ETF promoter globally, iShares is closely followed by Vanguard ($4,506.1 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 ($2,058.4 bn).
Graph 9: The 10 Largest ETF Promoters by Assets Under Management, June 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 hold that position until the end of the month.
The 10-top promoters accounted for 88.32% of the overall assets under management in the U.S. ETF industry. This meant, in turn, the other 486 ETF promoters registering at least one ETF for sale in the U.S. accounted for only 11.68% 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 H1 2026. Vanguard (+$259.8 bn) was the best-selling ETF promoter in the U.S. for the first half of 2026, ahead of iShares (+$227.4 bn) and State Street SPDR (+$70.2 bn).
Graph 10: Ten Best-Selling ETF Promoters, January 1 – June 30, 2026 (USD Billions)
Source: LSEG Lipper
The flows of the 10-top promoters accounted for estimated net inflows of $782.9 bn. As for the overall flow trend in June, it was clear that some of the 503 promoters (93) covered in this report faced estimated net outflows (-$29.5 bn in total) over the course of H1 2026.
Assets Under Management by ETFs
There were 5,476 instruments (primary share classes [5,397] and convenience share classes [79]) listed as ETFs registered for sales in the U.S. in the Lipper database at the end of June. Regarding the overall market pattern, it was not surprising assets under management at the ETF level were also highly concentrated. Only 1,026 of the 5,397 ETFs (primary share classes = portfolios) held assets more than $1.0 bn each. These ETFs accounted for $15,141.8 bn, or 95.73%, of the overall assets in the U.S. ETF industry. The 10 largest ETFs in the U.S. accounted for $4,789.4 bn, or 30.28%, of the overall assets under management.
Graph 11: The 10 Largest ETFs by Assets Under Management, June 30, 2026 (USD Billions)
Source: LSEG Lipper
Estimated Net Flows at ETF Level
A total of 3,840 of the 5,397 ETFs (primary share classes = portfolios) analyzed in this report showed net inflows of more than $10,000 each for H1 2026, accounting for inflows of $1,252.6 bn. This meant the other 1,557 instruments faced no flows, or net outflows, for the first half of 2026. Upon closer inspection, 1,022 of the 3,840 ETFs posting net inflows enjoyed inflows of more than $100 m over the course of H1 2026—for a total of $1,194.4 bn. The best-selling ETF for H1 2026 in the U.S. was Vanguard 500 Index Fund; ETF, which enjoyed estimated net inflows of $58.2 bn. It was followed by iShares Core S&P 500 ETF (+$54.5 bn) and State Street SPDR Portfolio S&P 500 ETF (+$44.4 bn).
Graph 12: The 10 Best-Selling ETFs, January 1 – June 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 $308.7 bn, or 30.26%, 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 H1 2026 were issued by iShares. These iShares ETFs accounted for estimated net inflows of $81.6 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 $123.7 bn.
