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You can’t win ’em all.
ETFs as a whole had an uncharacteristic week of outflows earlier this month, with about $3.7 billion in redemptions, according to ETF.com. The week ending July 3 came amid a massive year of inflows, however, with the industry on track to grow by over $2 trillion by year’s end. So what caused the blip, and how should investors be thinking about it? Some areas with the largest monthly outflows in June were commodities and digital assets, said Brian Paoli, a research analyst for Morningstar.
“Broadly speaking, flows typically follow performance,” Paoli said, adding that the largest outflows were in gold- and bitcoin-linked funds. “In 2025, we saw a crazy performance for both bitcoin and gold … and then heading into 2026, as the price of gold has come back down, we’ve seen those outflows increase in the first two quarters.”
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Go With the Outflow
There are many reasons for outflows, with causes ranging from investor uncertainty about a stock to loss of confidence in an entire sector or category of fund. When specific products lose assets, the reason might be that advisors have shifted their strategies, Paoli said. That happened recently, he added, when investors pulled out of the VanEck MSCI International Value ETF (VLUE) because of its heavy concentration in Micron, which could be worrisome for both investors and advisors. “Roughly a quarter of that ETF was actually being held in Micron, and so you had some investors both concerned about its individual stock exposure, but also, if you’re an advisor, you have a certain investment policy,” Paoli said.
Another factor that might be at play is SpaceX. Several funds that had the highest net outflows track the Russell 1000 or 2000 Indexes, which recently added the newly public behemoth to its ranks. “I can’t say with certainty that it’s [caused by] investors selling for that reason, but the Russell 1000 indexes are adding SpaceX to their holdings, both on the value and growth side,” Paoli said. “Russell 1000 trackers are going to show up naturally with the largest inflows or outflows. But it is interesting.”
Don’t Be a Worry Wart: Should investors be concerned about the negative numbers? Hardly, said Maital Legum, head of ETF solutions for Teucrium. “We as an industry have gotten so used to inflows week after week after week,” Legum said. The hundreds of funds that launched in the month of June alone, she added, indicate how “aggressive and how bullish” the industry is about the investment vehicle. “One week of outflows is really not any systematic or structural indication that things are cooling off.”
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