The $100 Billion Sprint: Decoding the Early 2026 ETF Inflows

In 2025, despite representing just over 10% of ETF assets, actively managed ETFs gathered nearly one-third of all ETF inflows. Investors increasingly turned to discretionary active equity and fixed income ETFs and not just index-based ETFs. That has persisted thus far in 2026, with active ETFs gathering 37% of new money.

Active fixed income ETFs, which pulled in 40% of the category’s flows in 2025, have been particularly in focus for investors. The PIMCO Multisector Bond Active ETF (PYLD ) has led the charge this year with $1.0 billion of new money, but others like the iShares Flexible Income Active ETF (BINC A-), the Fidelity Total Bond ETF (FBND B), and the JPMorgan Income ETF (JPIE ) have had great starts. We believe with limited clarity about the Fed’s next moves, investors are turning to experts to help them navigate.

After 3 years with outflows, thematic ETFs bounced back with $23 billion of inflows according to State Street Investment Management. More than two thirds of that new money flowed into robotics and artificial intelligence ETFs. However the Global X Defense Tech ETF (SHLD ) was among the other more popular thematic ETFs in 2025, gathering $3.6 billion. In the new year, with geopolitical tensions high, demand for the Global X fund has continued. SHLD pulled in $685 million and was up 19% in the first few weeks. SHLD owns well-known defense companies like Lockheed Martin and Northrop Grumman as well as Palantir Technologies. 

However, a recently launched thematic fund, the REX Drones ETF (DRNZ), was up 28%. DRNZ began trading in late October 2025 and has quickly crossed the $55 million mark as of last week. DRNZ owns some lesser-known but strong-performing companies like AeroVironment and RedCat Holdings.  The fund includes exposure to military and defense companies, but also includes industrial applications such as agriculture, construction, public safety, and critical services. 

Meanwhile, the darlings of 2025 the iShares AI Innovation and Tech Active ETF (BAI ) had more modest inflows in January and rose 3% in value to start the year. 

In 2025, US mega-cap laden ETFs were the top dogs. However, this year the Invesco S&P 500 Equal Weight ETF (RSP B+) had emerged as a leader.. RSP’s $4.5 billion was behind only two S&P 500 index-based ETFs and the iShares Core MSCI Emerging Markets ETF (IEMG A). The equally weighted ETF rose 4.1% year-to-date through January 21, beating the more popular Vanguard 500 ETF (VOO A) by more than 350 basis points.

In 2025, RSP was among the rare widely held ETFs to have significant net outflows, with $3.2 billion of redemptions. However, this year the ETF has benefitted. More moderately sized large-caps like Moderna and SanDisk outperform mega-caps like Apple and NVIDIA.

The State Street Financial Select Sector SPDR ETF (XLF A), which was also unloved in 2025, with $1.1 billion of net inflows. In 2026. XLF regained favor and gathered $3.2 billion. According to Christine Short, Head of Research at TMX Datalinx, the six largest US banks that have hefty weights in XLF delivered robust quarterly results due to a resurgence in investment banking and strong loan demand.

I hope you register to join us later this week for the VettaFi Winter Symposium to hear what Fidelity and VettaFi think about the record ETF year of 2025 and the start of 2026.

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