ETF Insights: Top 5 Fund Flows and Segments for July 2023

A look at each Segment and ETF Flows

US Large Cap

US large cap equities continued their steady climb in July 2023, as all major equity market indices were positive for the month; extending the strong returns exhibited through the calendar year thus far. The iShares Core S&P 500 ETF (IVV) attracted the most flows for the month; however, the Invesco QQQ ETF (QQQ) exhibited the strongest performance among the group. All 11 US stock sectors posted positive returns for the second consecutive month. Though the year-to-date performance of the Technology sector continues to lead all others, the double-digit percentage increase in oil prices in July 2023 sent the Energy sector 7.8% higher, followed by Communication Services at 5.7% and Financials at 4.8%.

Structured Products

Though the performance of equity markets thus far in the year has been strong, the structured products segment continues to garner flows as investors are seemingly anticipating a market downturn. The DeltaShares S&P 500 Managed Risk ETF (DMRI) took in a majority of fund flows in this segment for the month, however, the top-of-mind solution for market risk mitigation by many investors remains the JPMorgan Equity Premium Income ETF (JEPI), which exhibited the strongest performance among the group. Furthermore, the JP Morgan Nasdaq Equity Premium Income ETF (JEPQ), which garnered the third most flows, had the second highest performance of the group for the month. 

US Mid Cap

The mid-cap equity ETF segment has both fast-growing, young companies that have outgrown their small-cap origins, as well as mature companies operating in stable and profitable corners of the market. Though small-cap equities tend to exhibit greater volatility, and large-cap equities tend to be slow-growing, mid-cap equities capture the best of both worlds, as they are less volatile than fast-growing small-caps and have more growth potential than mammoth large-cap companies. Performance among the top 5 funds was particularly strong for the month, but the iShares Core S&P Mid-Cap ETF (IJH) garnered the most fund flows and had the best performance among the group; the SPDR Portfolio S&P 400 Mid Cap ETF (SPMD) had a similar performance but took in the third most flows. Though the iShares Russell Mid-Cap ETF (IWR) and IQ Candriam ESG U.S. Mid Cap Equity ETF (IQSM) outperformed the Vanguard Mid-Cap ETF (VO), the latter’s monthly flow was greater than the combined net flows of the two previously mentioned ETFs. 

US Government Bonds

With interest rates remaining elevated, higher income from bonds has resulted in US Government Bonds remaining top of mind for investors. The iShares 20+ Year Treasury Bond ETF (TLT) had the largest inflow for the month, but had the worst performance among its immediate group. The iShares Treasury Floating Rate Bond ETF (TFLO) garnered the second largest flows and had a positive performance for the month. As the name suggests, floating rate bonds are tied to a short-term benchmark rate that adjusts periodically over time. The iShares 3-7 Year Treasury Bond ETF (IEI) was the only other ETF to have a positive performance among the group. 

US Aggregate Bonds

US Aggregate Bonds have received strong inflows for the month, however performance was flat or negative. The iShares Core U.S. Aggregate Bond ETF (AGG) garnered the most flows, followed by the Vanguard Total Return Bond Market ETF (BND), and iShares Intermediate Government/Credit Bond ETF (GVI). Though the performance among many of the ETFs was similar, the iShares Intermediate Government/Credit Bond ETF was the only solution to have a positive performance (0.24%), whereas all others were slightly negative for the month.  

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.