US Fund Flows Keep Rolling in July

July marked another strong month for long-term US funds, which attracted $113 billion in net inflows. While inflows moderated slightly from June's pace, July was the fourth consecutive month in which long-term inflows exceeded $100 billion, an unprecedented streak. Taxable-bond funds continued to drive investor demand, while technology-focused sector funds remained a major destination for new assets.

For a complete view of fund flows in July, download the freeUS Fund Flows report.

July was a much weaker month for US equity funds than June. The category group brought in just $3 billion, with passive large-blend strategies doing most of the heavy lifting. Nearly every major equity category experienced outflows, underscoring a more cautious investor stance toward domestic equities.  

As has been the case for much of the past several years, passive products remained the primary source of investor demand.  

Large-blend funds were responsible for nearly all positive momentum within US equities during July, attracting approximately $36 billion in net inflows. Meanwhile, large-growth funds experienced the largest outflows, shedding nearly $15 billion during the month and more than $92 billion over the trailing 12 months.  

The continued preference for large-blend strategies reinforces investors' focus on diversified, low-cost exposure to broad US equity markets.

International-equity funds posted another difficult month, recording approximately $2 billion to $3 billion in net outflows during July. The category group's 12-month streak of inflows ended earlier this year, and recent results suggest investor enthusiasm has moderated.  

Despite the broader outflows, several pockets of strength remained. Focused-region funds attracted roughly $6 billion, led by demand for South Korea-focused equity exposure, while foreign large-blend funds added approximately $7 billion from continued passive investor demand.  

Overall, July's data suggests investors remain interested in international exposure but are becoming increasingly selective about where they allocate capital.

Fixed income once again played a central role in driving investor flows. Taxable-bond funds attracted another $67 billion in July, marking a third consecutive month with inflows exceeding $60 billion.  

Investor demand was particularly strong in ultrashort-bond funds, which gathered more than $15 billion during the month. Elevated short-term yields and ongoing inflation concerns continued to make lower-duration fixed-income strategies attractive to many investors.  

These flows suggest investors continue to value income-generating assets while balancing duration and inflation concerns.

One of July's more notable developments was strong demand at opposite ends of the duration spectrum. Ultrashort-bond funds led all bond categories in inflows, while long-government bond funds experienced their strongest inflow since May 2025.  

Long-government funds attracted nearly $6 billion, benefiting from elevated long-term Treasury yields. The 30-year Treasury yield remained above 5% for most of the month, creating a more attractive entry point for investors willing to accept additional duration risk.  

Meanwhile, securitized bond-focused funds, largely composed of CLO ETFs, gathered nearly $3 billion, continuing a multi-year growth trend driven by investor demand for yield with limited interest-rate sensitivity.

Technology remained among the strongest investment themes in July. Sector-equity funds attracted approximately $21 billion, extending a remarkable streak of elevated inflows. Technology strategies accounted for roughly $16 billion of that total.  

Demand remained heavily concentrated in semiconductor-focused funds. Three semiconductor ETFs collectively gathered approximately $16 billion, including roughly $7 billion into iShares Semiconductor ETF alone.  

The continued appetite for technology exposure also helped drive record flows into leveraged-equity categories, illustrating investors' willingness to pursue highly targeted growth opportunities.

One of July's most notable fund-family stories was the continued rise of Roundhill Investments. The firm attracted approximately $6.4 billion, ranking among the industry's largest asset gatherers for the month.  

Much of that growth came from the Roundhill Memory ETF (DRAM), which has accumulated nearly $25 billion since launching in April. Despite a difficult July performance, investors continued allocating capital to the strategy, making it responsible for the majority of the firm's monthly inflows.  

The fund's rapid growth highlights investors' continued enthusiasm for highly targeted thematic exposure, particularly within semiconductor-related segments. 

Source: Morningstar Direct. Data as of June 30, 2026.

Equities continued to dominate allocations, attracting CAD 34.6 billion in Q2, or 78% of all ETF flows. Fixed-income ETFs brought in CAD 6.9 billion, while alternative strategies added CAD 2.2 billion.  

Similar to trends seen in the US, Canadian investors showed a strong preference for US-equity exposure. US Equity was the top Morningstar category in Canada, attracting CAD 10.7 billion during the quarter. At the same time, asset-allocation ETFs continued gaining traction, accounting for 22% of quarterly flows as investors increasingly embraced diversified, all-in-one portfolio solutions.  

To learn more about Canadian ETF flows, check out the full report.

Fund flows data offers a real-time window into how investors are positioning portfolios in response to changing market conditions. 

June's data points to several important trends: 

• Continued demand for broad passive equity exposure despite weak flows across many equity categories.
• Persistent investor interest in taxable-bond funds, particularly ultrashort-bond strategies.
• Ongoing enthusiasm for technology and semiconductor-focused investments.  
• Growing investor interest in CLO ETFs and other low-duration yield-oriented fixed-income strategies.  

Advisors can use these insights to: 

• Understand how investors are reacting to market changes.
• Compare portfolio allocations to broader market moves.
• Prep for client questions about market behavior and investment trends.

Asset flows data in Morningstar Direct enables you to stay current with market trends. It offers a comprehensive, timely picture of the total net assets and estimated net flows across multiple geographical markets as well as organic growth rates for specific markets. 

With trusted, comprehensive flows data, you can:

• Monitor broad investor trends
• Perform competitive analysis
• Develop new products
• Market managed investment products