U.S. ETF Monthly Summary: July 2026 Results

U.S.-listed ETFs closed July with $15.7 trillion in total assets under management, unchanged vs. the end of June. Monthly net fund flows decelerated slightly, with $193.2 billion in new assets added in July, which is down 1.4% from June. This modest activity reflected the challenging July for the broader U.S. equity market with the S&P 500 Index down 0.14%.

In terms of monthly flows, new money was added to each asset class. The majority continued toward equities, which attracted 69.2% of the month’s inflows. 26.9% went to fixed income. Alternatives drew 2.6% of total fund flows, while commodities attracted 0.8%, asset allocation ETFs garnered 0.4%, and currency just 0.2%.

Following a record-setting number of new ETF launches in June, July saw a modest slowdown with 159 new ETFs. While that reflects a slight pause in momentum, the overall year-to-date pace remains well ahead of where it stood at this point last year.

Fund Flows by Asset Class

U.S. listed ETF assets under management (in millions) and fund flows as of July 31, 2026:

Looking at July ETF flows by asset class:

• Equities: The majority of new equity assets flowed into broad total market funds, spanning U.S., global, developed Europe, and Japan. Investor interest in the technology sector remained strong, with information technology and semiconductor ETFs continuing to attract new assets.

• Fixed income: Inflows were directed toward U.S. investment grade products, issued by both government and corporations across all maturities.

• Asset allocation: Target-outcome funds lead the asset class in monthly fund flows, balanced allocations, income, and real assets.

• Currency: Ethereum topped the asset class in terms of July fund flows, while Bitcoin ETFs across multiple issuers continued to attract steady flows.

• Alternatives: Hedge-fund strategy ETFs saw a notable uptick in investor interest.

• Commodities: The commodities space was quiet overall, with broad commodity market funds accounting for the majority of flows.

Fund Flows by Sector

Investors showed strong conviction in their sector decisions with large flows going toward Financials and Technology. On the other end of the spectrum, Energy and Communication Services experienced notable outflows. Interest among the remaining sectors appeared balanced, with flows fairly evenly distributed.

ETF Launches

Details:

• July saw 159 ETF launches, with Corgi Insurance Services adding 53 new products. This brings their ETF lineup to 197 total, all of which launched over the past seven months.

• JPMorgan converted two mutual funds to ETFs, JPMorgan Preferred and Income Securities ETF (JPRF) and JPMorgan Fundamental Data Science Large Growth ETF (LGDS), bringing $3.4 billion to the industry.

• The launch of Fidelity MSCI North American Subset Index ETF (FINA) attracted the most assets in July: $1.2 billion. It focuses on large- and mid-cap stocks, screened for companies with emission-reduction targets.

• In the leveraged or inverse single stock category, 86 ETFs came to market. Corgi’s leveraged long exposure to Joby Aviation attracted the most interest. Several issuers launched products on SK Hynix, both long and short. July fund flows went to the long side (note July 13 performance for the stock was down more than 11%).

• In structured outcome, 23 ETFs came to market, most aiming to provide a downside hedge or generate income.

By the Way: Buffer or Barrier?

After 30 years in the ETF industry, one thing never ceases to fascinate me: just when I think every possible innovation has been made, the industry surprises by repackaging structured-product strategies as ETFs.

We have 594 ETFs classified under the Structured Outcome category, collectively managing over $125 billion in assets at the end of July. All of the products have a time element to them. The majority rely on derivatives such as over-the-counter options, swaps, or forward contracts. They offer retail investors sophisticated strategies, which are expensive and traditionally hard to execute.

A couple of approaches that are easy to confuse are buffers and barriers. While both funds offer some form of downside protection, their approaches differ meaningfully.

To look at these strategies closer, below is a summary of the prospectus for the FT Vest Laddered Deep Buffer ETF (BUFD) and the Simplify Barrier Income ETF (SBAR) to compare and contrast some of the important elements.

This is not considered to be investment advice. Investors read the fund’s prospectus, consider the fund's investment objectives, risks, and charges and expenses carefully before investing.

Buffer ETFs are designed to give investors exposure to stocks while offering a degree of protection against losses, focusing more on long-term growth. These funds use a special type of options contract, known as FLEX options, to set both a ceiling on potential gains and partially protect against the downside risk.

Looking at BUFD as our example, this fund uses FLEX options to shield investors from losses within a specific range—between -5% and -30% on the S&P 500. In simple terms, if the market drops investors will absorb the first 5% of losses on their own. However, once that threshold is crossed, the protection kicks in and covers losses up to 30%.

If the market falls beyond that 30% mark, investors are once again exposed to the full extent of any additional losses. It's worth noting, however, that BUFD is focused solely on protecting against losses in U.S. large-cap stocks. In addition, the fund places a cap on the potential upside participation and could limit gains during periods of strong market performance.

Barrier ETFs are primarily designed to generate annual income for investors. These funds use a specialized type of options contract called barrier options, which are over-the-counter options that allow parties to customize key details, such as the underlying asset, the duration of the contract, and the level of protection offered.

To generate income, barrier ETFs sell both call options and put spreads, earning money by collecting the premiums associated with these contracts. Looking at SBAR as our example, it uses barrier options to protect investors against the first 30% of losses on a specific market index. However, there's an important catch: if losses exceed the 30% threshold, investors are exposed to accelerated losses beyond that point. It's also important to note that this protection only applies at the end of a defined period, not on an ongoing basis throughout the term.

Adding another layer of complexity is a key detail that the 30% barrier protection in SBAR is not applied across the entire portfolio. It only covers specific spreads within the fund. SBAR bases its partial hedge on the worst-performing of three major indexes—the SPDR S&P 500 ETF Trust, the Invesco QQQ Trust, or the iShares Russell 2000 ETF—rather than all three combined.

This means the fund's performance is tied to whichever of these indexes performs the poorest during the period. If any individual spread declines by more than 30%, investors bear the full extent of those losses on a one-to-one basis with the reference asset. In other words, it's possible for an investor to lose their entire investment.

In contrast to BUFD, SBAR doesn't place a hard cap on potential gains, but it doesn't directly benefit from rising stock prices either. Instead, its returns are primarily driven by income generation rather than stock market performance.

In conclusion, both funds have taken a complex strategy and are attempting to make it easily accessible. Both utilize options strategies and offer some form of downside protection. However, they are fundamentally different products serving different investor objectives:

• SBAR is focused on income-generation.

• BUFD is structured more toward growth and provides a more defined downside protection with capped upside potential.

Investors should carefully consider their objectives—income versus growth—as well as their risk tolerance and understanding of complex derivatives before choosing between these two products.

This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.