US-listed exchange-traded funds reversed course in May, drawing $86 billion in inflows as investor sentiment rebounded from April’s uncertainty, according to new data from State Street Global Advisors.
Last month's record put total 2025 flows so far at $444 billion, keeping the industry on track for another trillion-dollar year.
Bond ETFs accounted for nearly half of the month’s inflows, attracting $37 billion – their third-highest monthly total on record. That figure represents a 2% growth in assets and a 34% share of all ETF flows for the month, well above the sector’s 18% share of total ETF assets.
“[May's bond ETF sales record] raises 2025 figures to over $150 billion and sets bond ETFs on a path for a record-breaking year of more than $360 billion of inflows – topping the record $300 billion from 2024," said Matthew Bartolini, head of Americas ETF research at State Street.
Within fixed income, long-term Treasury ETFs led with $6 billion in inflows – despite the recent cloud of uncertainty hanging over longer-tenored US debt – followed by strong demand for investment-grade ($5 billion) and high-yield corporate bond ETFs ($4.7 billion). Bank loan and CLO ETFs also saw renewed interest, collecting $2 billion to post their ninth-best month ever.
Equity ETFs drew $44 billion in May, though US-focused products captured a smaller share than usual, possibly an after-effect of the "sell America" trade from the previous month. Domestic equities took in $25 billion, representing three-fifths (58%) of equity ETF flows – down from their 12-month average of 85%. Meanwhile, developed international markets saw $9 billion in inflows, and single-country ETFs took in $4 billion, marking their seventh-best month historically.
The shift in regional flows points to a broader rebalancing as investors seek geographic diversification. A growing number of single-country ETFs saw inflows, with 62% of such funds gaining assets – well above the historical average.
Sector rotation was also evident. Despite lingering caution, defense-oriented industrials attracted $1.5 billion, while technology and communication services funds brought in a combined $2.4 billion. Financials, energy and materials sectors continued to see outflows.
On the style front, growth strategies surged with $18 billion in net inflows, the second-highest on record. Momentum and quality factors also stood out, adding $2.4 billion and $1.7 billion respectively. In contrast, value and small-cap strategies lagged.
Meanwhile, active ETFs rebounded sharply, bringing in $33 billion across both equities and fixed income. That pushes year-to-date active flows above $175 billion.
“My projections indicate active ETF inflows will be $420 billion for this year, a massive record that firmly outpaces the $309 billion from 2024,” Bartolini said.
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