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ETF Prime: ETF Inflows on Pace to Shatter Annual Record

BY | ETF Database
10:14 am ET 05/20/26 | 5 VIEWS
Exchange traded fund inflows have topped $750 billion in 2026. This puts the industry on pace to challenge the $1.5 trillion annual record set last year, Todd Rosenbluth, head of research at VettaFi, told host Nate Geraci on this week’s ETF Prime. Both suggested the industry could approach or surpass $2 trillion by year-end.The second-quarter has brought a risk-on shift to the flow picture. More than 30% of Q2 inflows have gone into fixed-income ETFs, led by Vanguard and Schwab corporate bond products. Growth ETFs regained favor as well, with the Schwab U.S. Large-Cap Growth ETF (SCHG B+), the Vanguard Growth ETF (VUG B+), and the SPDR Portfolio S&P 500 Growth ETF (SPYG B+) each drawing more than $2 billion in the quarter. Thematic ETFs have joined the run, too. Rosenbluth highlighted the Roundhill Memory ETF (DRAM), the Procure Space ETF (UFO ), and the Global X U.S. Infrastructure Development ETF (PAVE B) as standouts in a broadening thematic resurgence.Two industry milestones are now within striking distance. Geraci noted the Vanguard S&P 500 ETF (VOO A) has attracted $56 billion in year-to-date flows, pushing total assets to $960 billion and tracking toward becoming the first trillion-dollar ETF. Vanguard also trails BlackRock by less than $70 billion for the industry asset crown. It has year-to-date flows of $205 billion compared to BlackRock’s $135 billion.Beyond the InflowsRosenbluth noted that Vanguard’s lead stems from sticky, broad building blocks — VOO, the Vanguard Total Stock Market ETF (VTI A), and the Vanguard Total Bond Market ETF (BND A-) — while BlackRock captures more tactical flows through the iShares 0-3 Month Treasury Bond ETF (SGOV A+) and the iShares Expanded Tech-Software Sector ETF (IGV B+), alongside outflows from iShares 20+ Year Treasury Bond ETF (TLT B-) and the iShares Russell 2000 ETF (IWM A-). The BlackRock’s iShares Bitcoin Trust ETF (IBIT ) could prove a differentiator in that race, he added. The discussion then turned to the risks of choosing ETFs on cost alone. Rosenbluth pointed to the iShares Core MSCI Emerging Markets ETF (IEMG A), which has outperformed the Vanguard Emerging Markets Stock Index Fund ETF (VWO A) by 17% over the past year. This gap was driven entirely by index methodology. IEMG holds South Korea while VWO does not, and the iShares MSCI South Korea ETF (EWY B) has gained more than 80% over that stretch.Thematic StrategiesThe same pitfall applies in thematic strategies. The Global X Defense Tech ETF (SHLD ) is 15 basis points cheaper than the REX Drone ETF (DRNZ), yet DRNZ has outperformed by more than 1,000 basis points in 2026. Andrew Beer, Managing Member of DBI, also joined this week’s episode to discuss the iMGP DBi Managed Futures Strategy ETF (DBMF B+), which has grown from roughly $1 billion to over $3.7 billion in assets. Beer described managed futures as a zero-correlation strategy that returned more than 20% in 2022 when traditional portfolios declined, and introduced the Simplify DBi CTA Managed Futures Index ETF (SDMF), a passive, lower-cost option built for model portfolios. For more ETF Prime podcast episodes, visit our ETF Prime Content Hub. VettaFi LLC (“VettaFi”) is the index provider for UFO and DRNZ, for which it receives an index licensing fee. However, UFO and DRNZ are not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of UFO and DRNZ.

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