Investors Pull $2.2B from Tech ETF IYW, Rotating into Financials and Health Care

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Weekly Channel Summary

The Sector & Industry ETF channel, encompassing 278 funds from 59 issuers, holds approximately $1.09 trillion in assets under management. This past week, the channel attracted over $3.3 billion in net new assets. This recent influx contributes to a year-to-date total of $44.6 billion and a one-year total of $66.6 billion in net flows.

This Week’s Performance Leaders and Laggards

Communication Services led sector performance this week with a 3.36% gain, closely followed by Financials which rose 3.23%. Despite the weekly strength, Communication Services remains down over 5% year-to-date. On the other end of the spectrum, Energy (-1.16%) and Utilities (-1.06%) were the weakest performing categories. Information Technology, which dipped -0.57% this week, continues to be the standout leader on a year-to-date basis with a return of 35.88%.

Category Performance Snapshot

Category WTD 1 Month 3 Month 6 Month YTD 1 Year
Communication Services 3.36% -2.98% -0.36% -4.83% -5.39% 5.37%
Financials 3.23% 8.15% 13.25% 4.33% 4.88% 11.59%
Industrial 2.84% 5.41% 11.24% 14.61% 17.31% 28.39%
Health Care 2.59% 14.70% 14.24% 10.44% 10.73% 33.69%
Consumer Discretionary 2.12% 0.25% 8.90% -0.07% -0.81% 7.41%
Materials 0.57% 0.08% 3.01% 13.41% 15.33% 18.03%
Consumer Staples 0.43% 4.89% 4.07% 10.65% 10.57% 6.26%
Real Estate -0.55% 4.53% 9.51% 13.17% 13.31% 13.82%
Information Technology -0.57% -8.10% 37.21% 34.00% 35.88% 60.05%
Utilities -1.06% 4.63% -0.57% 7.15% 8.41% 15.71%
Energy -1.16% -7.87% -9.64% 18.38% 20.95% 27.18%

Top & Bottom 5 ETFs by Weekly Performance

Defense-focused funds dominated the top performers list, with the WisdomTree Europe Defense Fund (WDEF) surging 11.91%. Several other aerospace and defense ETFs also posted strong gains for the week. In contrast, technology momentum strategies struggled significantly. The Invesco Dorsey Wright Technology Momentum ETF (PTF) was the worst performer, plunging -10.02%, while multiple semiconductor-focused funds also experienced notable declines.

Ticker Fund Name WTD Performance
Top Performers
WDEF WisdomTree Europe Defense Fund 11.91%
EUAD Select STOXX Europe Aerospace & Defense ETF 8.67%
WDGF WisdomTree Global Defense Fund 8.26%
DVXF WEBs Financial XLF Defined Volatility ETF 7.12%
IDEF iShares Defense Industrials Active ETF 6.52%
Bottom Performers
PTF Invesco Dorsey Wright Technology Momentum ETF -10.02%
PSI Invesco Semiconductors ETF -6.05%
FTXL First Trust Nasdaq Semiconductor ETF -5.71%
PRN Invesco Dorsey Wright Industrials Momentum ETF -5.70%
XES State Street SPDR S&P Oil & Gas Equipment & Services ETF -5.68%

Analyzing the Weekly Flows

Investors directed a net $3.3 billion into Sector & Industry ETFs over the past week, favoring cyclical and defensive plays. The Financials category was the clear favorite, attracting nearly $1.5 billion in new assets. Health Care and Industrials also saw significant demand, pulling in $1.1 billion and $921 million, respectively. Conversely, investors withdrew capital from Energy (-$782 million) and Information Technology (-$746 million), which were the only categories to post significant net outflows.

Category Flows Summary

Category Fund Count AUM 5 Day 30 Day 90 Day YTD 1 Year
Financials 35 $98.57B $1,493M $3,045M -$187M -$2,296M -$1,705M
Health Care 33 $103.30B $1,103M $2,858M $320M $1,580M $4,433M
Industrial 31 $90.88B $921M $2,414M $3,610M $12,968M $19,469M
Communication Services 8 $31.05B $624M -$417M -$363M -$2,806M -$1,369M
Utilities 11 $38.59B $310M $495M -$973M -$621M $3,063M
Consumer Discretionary 15 $33.40B $282M -$128M $124M -$2,021M -$2,447M
Real Estate 55 $95.00B $162M $2,233M $3,566M $4,450M $8,140M
Consumer Staples 14 $25.91B $46M -$898M -$1,809M -$1,606M -$2,410M
Materials 10 $14.13B -$89M $737M $1,495M $2,930M $2,839M
Information Technology 34 $497.81B -$746M $3,230M $19,024M $24,775M $31,457M
Energy 30 $60.07B -$782M -$2,272M -$3,676M $7,248M $5,126M

Top & Bottom 5 ETFs by 5-Day Flow

Despite net outflows from the Information Technology category, the VanEck Semiconductor ETF (SMH) was the week’s top asset gatherer, pulling in over $1.0 billion. This suggests a targeted rotation within the tech space rather than a complete abandonment. The outflows from the broader category were driven by substantial redemptions from the iShares U.S. Technology ETF (IYW), which lost nearly $2.2 billion, and the State Street Technology Select Sector SPDR ETF (XLK), which shed $588 million.

Ticker Fund Name 5-Day Flow
Inflows
SMH VanEck Semiconductor ETF $1,059M
QTEC First Trust NASDAQ-100 Technology Sector Index Fund $912M
FXL First Trust Technology AlphaDEX Fund $886M
XLI State Street Industrial Select Sector SPDR ETF $853M
XLF State Street Financial Select Sector SPDR ETF $762M
Outflows
IYW iShares U.S. Technology ETF -$2,191M
XLK State Street Technology Select Sector SPDR ETF -$588M
SOXX iShares Semiconductor ETF -$491M
XLE State Street Energy Select Sector SPDR ETF -$437M
IGV iShares Expanded Tech-Software Sector ETF -$359M

Note: the following fund(s) were excluded from the flow totals above because the weekly flow exceeds 75% of the fund’s AUM and may be the result of a custom rebalance: FTXN (-$743M), FXN (-$738M).

Issuer League Table Update

SPDR and Vanguard continue to dominate the sector landscape, commanding 38.73% and 24.35% of the channel’s assets, respectively. This week, SPDR led all issuers with over $3.0 billion in net inflows, buoyed by demand for its core sector funds. In stark contrast, iShares experienced the largest outflows, with investors pulling nearly $3.2 billion from its products, largely driven by the significant redemption from its flagship U.S. technology fund.

Top 5 Issuers by AUM

Brand Fund Count AUM AUM Market Share
SPDR 28 $421.83B 38.73%
Vanguard 12 $265.24B 24.35%
iShares 49 $191.38B 17.57%
VanEck 16 $76.54B 7.03%
Fidelity 12 $39.44B 3.62%

Top & Bottom 3 Issuers by 5-Day Flow

Brand 5-Day Flow
Inflows
SPDR $3,063M
First Trust $1,634M
VanEck $1,043M
Outflows
iShares -$3,180M
JPMorgan -$39M
Tuttle Capital -$9M

For a deeper dive into these trends, access our FREE, in-depth Sector & Industry ETF reports in the right side panel of this page.

Disclosures

This material is for informational purposes only and should not be considered investment advice. All investments, including ETFs, involve risk, including the possible loss of principal. Investors should consider their investment objectives, risks, charges, and expenses carefully before investing.

This analysis was developed by the team at ETF Action. We leverage advanced AI tools to assist in the drafting and refinement of our content, based on our expert prompts, direction, and final review.