ETFs Inflows Hit $138B in September, On Track to Smash Annual Record

Core Insights - U.S.-listed ETFs experienced significant inflows of $138.1 billion in September, marking the strongest month of the year and surpassing August's $119.3 billion, leading to year-to-date inflows of $930.7 billion, positioning the industry to potentially exceed $1 trillion this month, which would surpass last year's record of $1.1 trillion [1] Inflows by Asset Class - U.S. equity ETFs led inflows with $65.9 billion, accounting for approximately half of total inflows, while international equity ETFs added $27.6 billion, U.S. fixed income ETFs attracted $23.9 billion, and commodities ETFs pulled in $11.2 billion [2] - The S&P 500 index saw year-to-date gains of up to 15%, and the Nasdaq-100 advanced more than 18% during September [2] Bond Market Dynamics - Bond yields decreased as the Federal Reserve cut rates for the first time this year, despite weaker economic data, with investors focusing on the Fed's policy shift and the growth in artificial intelligence [3] Top Performing ETFs - The iShares Core S&P 500 ETF (IVV) led individual ETF inflows with $18.9 billion, followed by the Vanguard S&P 500 ETF (VOO) with $4.4 billion and the iShares S&P 100 ETF (OEF) with $4.3 billion, with OEF's assets nearly doubling to almost $28 billion this year [4] - The SPDR Gold Shares (GLD) attracted $4.2 billion as gold prices surged to record highs near $3,900/oz, reflecting a 47% increase year-to-date, with GLD alone adding $15 billion in 2025 [5] - BlackRock's active ETFs, the iShares A.I. Innovation and Tech Active ETF (BAI) and the iShares U.S. Equity Factor Rotation Active ETF (DYNF), each garnered $3.3 billion, with BAI up 29% year-to-date and DYNF gaining 17% [6] - The iShares 7-10 Year Treasury Bond ETF (IEF) saw inflows of $2.6 billion, boosted by falling rates and a 50-basis-point drop in the 10-year Treasury yield, with the fund up 7.5% this year [7] Outflows from ETFs - The iShares MSCI EAFE Growth ETF (EFG) led outflows with $3.8 billion, despite international equities outperforming U.S. stocks, as EFG's 20.8% year-to-date return lagged behind the broader iShares MSCI EAFE ETF (EFA), which is up 27% [8] - Notable outflows were also observed in leveraged ETFs, including the Direxion Daily Semiconductor Bull 3x Shares (SOXL), ProShares UltraPro QQQ (TQQQ), and Direxion Daily TSLA Bull 2x Shares (TSLL), indicating profit-taking by traders [9]