Bonds and Tech Stocks Drive Historic Streak for US Fund Flows

For a fourth straight month, long-term US fund inflows surpassed $100 billion, the first time in history that has happened. That said, July’s $113 billion intake did not stand out as much on a relative growth basis or relative to flows from the last 12 months. Taxable-bond funds continued to drive most inflows, though sector-equity funds also had a notably strong showing, buoyed by investors’ continued interest in semiconductor stock exposure.

Bond Inflows Won’t Quit

For a third straight month, taxable-bond inflows exceeded $60 billion, bringing in $67 billion in July and continuing the category group’s strong showing. Ultrashort bond funds led all bond categories in inflows, raking in over $15 billion for the month, as inflation risk continues to be top of mind for many investors, while short-term yields remain elevated relative to the last 15 years.

CLO ETFs Are Feeling the Love …

The securitized bond-focused category—which largely consists of collateralized loan obligation exchange-traded funds—experienced its fourth-largest monthly inflows on record in July, gathering nearly $3 billion. Most of this came from the two giants of the category, Janus Henderson AAA CLO ETF JAAA and PGIM AAA CLO ETF PAAA, which make up the bulk of category assets. This continues a major trend; the category has grown tenfold in the last three years as investors have been attracted to these high-quality assets with little interest rate sensitivity and a meaningful yield advantage versus money market funds.

… but Long Bonds Are Getting Picked Up, Too

Surprisingly, long government funds saw their largest monthly inflows on an absolute and relative basis since May 2025, bringing in nearly $6 billion, an organic growth rate of 3.0%. While inflation and interest rate risk remain a significant consideration for many investors, long-term yields are particularly elevated, making for a more enticing entry point. The 30-year Treasury yield was above 5% for most of July, good for the longest stretch since 2007.

US Equity Funds Post Muted Inflows in July

US equity funds saw a weak net inflow of $3 billion in July. Passive inflows into large-blend funds of $36 billion bailed out the group, as all categories but two were in outflows. The only other positive category, small value, added less than $200 million in the month, part of a $7 billion outflow over the past year. Large-growth funds led losers for the month and year, dropping $15 billion in July and $93 billion over the past 12 months.

Is International Equity’s Run Over?

International-equity funds’ 12-month streak of inflows ended in May, and July’s $2 billion outflow supported the notion that sentiment has softened toward the asset class. Still, two areas within the category group maintained notable inflows: focused-region funds, led by a South Korea equity ETF, saw a $6 billion July inflow, while foreign large-blend funds, buoyed by a steady stream of passive assets, added $7 billion.

Investors Keep Uploading Tech Stocks Into Their Portfolios

Sector-equity funds’ streak of $18-billion-plus monthly inflows hit four in July, as investors put another $21 billion into the category group. Technology funds again dominated, accounting for $16 billion of the monthly inflows, bringing their total to $86 billion for the trailing year. Within tech, semiconductor funds processed most of the new cash, with three ETFs netting $16 billion combined, led by iShares Semiconductor ETF’s SOXX $7 billion inflow. Similarly, leveraged equity funds saw a record monthly inflow, largely owing to significant interest in a triple-leveraged semiconductor fund.

Roundhill Investments Running Rampant

Roundhill Investments’ run has stood out in the industry, driven by the commercial success of its star fund, Roundhill Memory ETF DRAM. Roundhill Memory ETF’s rapid growth since its April inception has been unprecedented, coming from an asset manager that was unknown to many before its launch, amassing almost $25 billion in its first four months. Despite the ETF’s nearly 27% investment loss in July, investors still flocked, desiring the exceptional performance from its first few months. It was responsible for the lion’s share of the firm’s $6.4 billion July inflows and makes up 72% of the thematic equity firm’s total assets.

This article is adapted from the Morningstar Direct US Asset Flows Commentary for July 2026. Download the full report here.