ETF Flows Soared in June, Following Gains in Stocks

Inflows into ETFs more than doubled in June from the previous month as investors chased this year’s recovery in equities, showing optimism in the economy even as interest rates jumped. 

Exchange-traded fund inflows soared to $71.3 billion in June from $33.1 billion in May, according to data from research firm Morningstar Inc. The numbers also skyrocketed compared with the $35 billion in inflows recorded in June 2022. Investors are eager to jump in and “put their money back to work,” Morningstar research analyst Ryan Jackson told etf.com. 

“Folks are starting to warm up a little bit to the idea that we are kind of threading the needle with this fabled soft landing,” Jackson said. “The economic outlook looks a little bit better than it has over much of the past 18 months.”  

As the Nasdaq roared to its best first half of the year in 40 years—including a 5.1% June gain in the SPDR S&P 500 ETF Trust (SPY)—investors sought to participate in the gains. Large blend ETFs, which offer broad market exposure and combine value and growth stocks, were the category with the biggest inflows, at $19.6 billion, according to Morningstar’s June flows report.  

Intermediate core bonds were second, pulling in $16.3 billion. Jackson noted that in the first half of the year, investors largely looked to fixed income as they opted for more conservative strategies, which has led to higher inflows into intermediate bond ETFs.  

Active ETF Flows 

Investors drained short-term bond funds in June, as those fixed income ETFs lost $6.8 billion in outflows. Large value ETFs also saw huge losses, as those funds decreased by $6.5 billion in investor cash last month.  

“It was a dreadful run for a category that for a long time has definitely been a favorite among investors,” said Jackson. 

Actively managed ETFs’ surge continued, as inflows jumped 43% to $8 billion from $5.6 billion in June 2022. They actually dropped a bit, from $8.6 billion in May. 

The category still pales compared with passively managed ETFs, which added $63 billion in flows last month. 

Year to date, actively managed funds have brought in $26.7 billion, while passively managed long-term funds have brought in $169.2 billion.  

As for fund managers, BlackRock Inc.’s iShares continued to be the reigning ETF inflow winner, gaining $20.4 billion in flows this June. Vanguard Group Inc. pulled in $12.5 billion, while State Street Corp. brought in $6.4 billion. T. Rowe Price Group Inc. saw the biggest outflows—losing $4.7 billion—and Capital Group’s American Funds lost $3.4 billion.  

Contact Lucy Brewster at [email protected] or Twitter at @lucyrbrewster