U.S.-listed exchange-traded funds attracted $189 billion in July 2026, lifting year-to-date inflows to approximately $1.2 trillion and trailing 12-month inflows to $2 trillion, according to a report from State Street Investment Management.
More than 70% of July’s inflows went into equity ETFs, reflecting a broadly risk-on investor posture despite declines across global stock and bond markets during the month.
U.S. equity ETFs led the activity with approximately $92 billion in net inflows. Non-U.S. equity ETFs attracted another $35 billion, including a record $8 billion directed toward single-country funds.
Total equity ETF inflows reached approximately $134.3 billion in July, bringing year-to-date inflows to $829.3 billion and trailing 12-month inflows to more than $1.35 trillion.
Fixed-income ETFs added approximately $51.9 billion during the month. Year-to-date bond ETF inflows reached approximately $352 billion, while trailing 12-month inflows totaled about $577.7 billion.
State Street said bond ETF flows are on pace to exceed the record $433 billion gathered in 2025. Based on the current pace, full-year 2026 inflows could surpass $600 billion.
The strong ETF demand came despite a difficult market backdrop. Global stocks and bonds declined in July as investors considered the war in Iran, uncertainty surrounding Federal Reserve policy, rising interest rates, fiscal concerns and questions about AI-related spending.
State Street noted that July represented the 11th time in the past 13 monthly global equity declines that global bonds also fell, highlighting the less predictable relationship between stocks and bonds during periods of market stress.
Corporate fundamentals remained relatively supportive. The S&P 500 was on pace to record a second consecutive quarter with earnings growth above 20%, while 87% of companies reporting results had exceeded expectations.
Economic activity also remained resilient, supported by consumer spending and AI-related business investment. State Street said U.S. investment in industrial equipment increased by the most since 2011 during the second quarter.
A deeper analysis of July’s flows also pointed to risk-seeking behavior. State Street ranked ETFs according to their sensitivity to equities, regional markets, factors and credit exposures.
ETFs in the highest risk-on beta decile received approximately $23.6 billion, or 13.5% of the analyzed flows. Funds above the midpoint of the risk ranking attracted $40 billion more than those below it, and the weighted average risk-on beta for July flows was 1.10.
Demand for leveraged exposure was particularly strong. Leveraged ETFs expressing long positions attracted a record $8.5 billion in July. Combined inflows across leveraged long and short ETFs totaled $6 billion, the sixth-highest monthly result on record.
The July activity followed approximately $8 billion in inflows for leveraged long ETFs during June, producing the highest trailing three-month inflows on record for that category.
Sector ETFs set a monthly record with approximately $25 billion in inflows. Technology funds accounted for nearly $19 billion, also setting a category record, even though the average technology sector and industry ETF declined approximately 10% during July.
Approximately 89% of technology ETFs posted negative returns during the month, suggesting that the inflows may have reflected investors buying the pullback or continuing to pursue long-term exposure to artificial intelligence and productivity-related growth.
Financial-sector ETFs attracted approximately $3.4 billion, while healthcare ETFs received about $2.2 billion. Healthcare demand was concentrated in biotechnology and pharmaceutical funds supported by innovation and merger and acquisition activity.
Investors also continued adding international exposure. U.S. equity ETFs captured 73% of July equity flows, below their approximately 80% share of equity ETF assets.
Non-U.S. equities accounted for 27% of monthly equity inflows despite representing about 20% of assets, indicating that investors were directing a disproportionate share of new capital outside the United States.
Single-country ETFs attracted approximately $8.2 billion, including a record $7 billion allocated to South Korea-focused funds. Twenty-seven single-country ETF categories recorded inflows, compared with 16 that experienced outflows.
Within fixed income, investors continued to favor shorter maturities. Short-term government bond ETFs received approximately $8.6 billion in July, compared with about $3.3 billion for long-term government bond funds.
Short-term government bond ETF inflows reached approximately $66.8 billion for the year, while long-term government funds had net outflows of roughly $3.2 billion.
Inflation-protected bond ETFs added approximately $1.45 billion during July, bringing year-to-date inflows to more than $10.2 billion. State Street said investors remained concerned about inflationary pressure associated with geopolitical developments, resilient consumption and the resources required for the AI capital spending cycle.
Commodity ETFs gathered approximately $1.5 billion in July. Broad commodity products attracted about $1.3 billion, marking their 13th month of inflows during the past 14 months.
Broad commodity ETFs gathered approximately $6.6 billion over that period. State Street said 2026 inflows were approaching $5 billion and could exceed the annual record of $8.1 billion established in 2021 if the current pace continues.
Value and growth ETFs received nearly equal levels of capital. Value funds attracted approximately $10.6 billion in July, compared with $10.3 billion for growth ETFs.
Small-cap ETFs added approximately $901 million during the month and have gathered more than $8.1 billion in 2026 after experiencing approximately $8 billion in outflows during 2025.
Dividend strategies led smart-beta demand with approximately $6.1 billion in July inflows and $34.3 billion year to date. Size-factor ETFs attracted nearly $1.5 billion, while low-volatility funds recorded their first positive month of 2026.
Active ETFs gathered approximately $58.5 billion in July, raising year-to-date inflows to nearly $457 billion. Total active ETF assets exceeded $2 trillion for the first time.
State Street estimated that active ETF inflows could reach a record $800 billion during 2026, more than 60% above the previous record of $498 billion set in 2025.
Derivative income ETFs received approximately $6.9 billion during July and nearly $40 billion year to date as investors pursued alternative income sources. Defined-outcome ETF assets reached approximately $90 billion and were on pace to exceed $100 billion by the end of 2026.
Thematic ETFs attracted approximately $1.2 billion during July, led by $1.34 billion flowing into robotics and AI strategies.
Future-security ETFs added approximately $449 million as geopolitical conflicts increased investor attention on defense-related technologies. Space exploration and sustainable environment ETFs experienced outflows of approximately $406 million and $508 million, respectively.
State Street concluded that July’s activity demonstrated investors’ willingness to remain exposed to risk assets despite macroeconomic uncertainty. The firm emphasized diversification across company sizes, geographic regions, income sources and inflation-sensitive assets as investors navigate a market shaped by strong fundamentals but frequent policy and geopolitical disruptions.
