Buffer ETFs and Value Funds Drive September Rotation

Pacer and First Trust led the field in absolute terms among non-mega issuers, pulling in $4.44B and $4.00B respectively, with Pacer’s 1-day intake equal to 9.25% of its $48.03B AUM, far outpacing its $4.45B 5-day and $4.81B 30-day totals. FT Vest added $2.31B on the day, roughly matching its $2.51B 5-day and $3.46B 30-day figures, reflecting concentrated buffer-fund demand. Among mega issuers, iShares gathered $9.12B while Vanguard shed $13.00B and Invesco lost $4.23B, extending Vanguard’s 5-day outflow of $13.92B even as its 30-day and YTD figures remain firmly positive at $93.09B and $433.54B. Capital Group posted the largest absolute mega-issuer outflow at $411.3M, and smaller names Optimize (32.41% of AUM) and Variant Perception (7.24%) posted the largest relative inflows, while PLUS, Corgi, and Inspire each saw modest relative outflows near -1.5% to -1.9% of AUM.

Total flows across all asset classes reached $3.54B on the day, well below the $91.69B 5-day and $197.44B 30-day paces but consistent with the $1,519.56B YTD and $2,089.00B 1-year totals. Non-Traditional led all classes with $2.06B, extending its $5.66B 5-day and $14.70B 30-day trend, driven largely by September buffer-fund resets. Fixed Income added $1.75B and Commodity $700.8M, both continuing steady 30-day inflows of $54.49B and $10.22B respectively, while Equity posted a $1.28B net outflow despite a $69.14B 5-day and $107.85B 30-day gain. At the category level, U.S. Large Cap – Value led with $5.58B while U.S. Large Cap – Growth lost $4.58B and U.S. Large Cap – Blend lost $2.65B, underscoring a pronounced style rotation within U.S. equities.

U.S. size and style flows were dominated by the iShares Core S&P 500 ETF (IVV), which took in $8.52B, alongside the Pacer US Cash Cows 100 ETF (COWZ) at $3.49B and the First Trust Rising Dividend Achievers ETF (RDVY) at $1.88B. On the outflow side, the Vanguard S&P 500 ETF (VOO) lost $9.98B and the Invesco QQQ Trust Series I (QQQ) shed $4.37B, with the State Street SPDR S&P 500 ETF (SPY) down $1.26B as well. The scale of the IVV inflow against the VOO and SPY outflows highlights sizable single-day divergence among S&P 500 vehicles despite tracking similar exposure.

Ex-U.S. size and style activity was comparatively muted, led by the Vanguard Total International Stock ETF (VXUS) at $195.7M and the Dimensional International Value ETF (DFIV) at $61.1M. Outflows were led by the iShares MSCI EAFE Growth ETF (EFG), which lost $96.6M, alongside the Capital Group New Geography Equity ETF (CGNG) at $26.1M. Overall dollar movement in this category was modest relative to domestic equity flows, with the largest single fund move under $200M in either direction.

Technology-related sector funds gathered the largest inflows, led by the First Trust NASDAQ Technology Dividend Index Fund (TDIV) at $468.6M and the First Trust Nasdaq Semiconductor ETF (FTXL) at $244.2M, consistent with the $935.5M category-level inflow into Information Technology. Financials saw the largest outflow, with the State Street Financial Select Sector SPDR ETF (XLF) losing $790.6M, aligning with the sector’s $1.07B category-wide net redemption. Energy and real estate also saw notable single-fund outflows from the State Street Energy Select Sector SPDR ETF (XLE) at $422.2M and the State Street Real Estate Select Sector SPDR ETF (XLRE) at $408.0M.

Region and country-specific fund flows were relatively small, with the JPMorgan BetaBuilders Developed Asia Pacific ex-Japan ETF (BBAX) leading inflows at just $6.4M. The largest outflow came from the iShares MSCI South Korea ETF (EWY) at $309.1M, followed by the JPMorgan BetaBuilders Japan ETF (BBJP) at $102.8M. This aligns with the broader $588.2M outflow seen in the Country Specific category, with single-country Asia exposures accounting for the bulk of redemptions.

Thematic flows were led by the BNY Mellon Global Infrastructure Income ETF (BKGI) at $263.8M and the ARK Innovation ETF (ARKK) at $221.6M, with the Global X Defense Tech ETF (SHLD) adding $217.5M and helping contribute to ARK’s broader 5-day total of $1.31B. On the outflow side, the Global X U.S. Infrastructure Development ETF (PAVE) lost $90.5M and the Global X Copper Miners ETF (COPX) shed $62.0M. The Disruptive Tech category gained $500.2M overall, consistent with strength across ARK’s suite of thematic funds.

Fixed income inflows totaled $1.75B for the day, with the iShares National Muni Bond ETF (MUB) leading at $647.9M and the iShares 0-3 Month Treasury Bond ETF (SGOV) adding $382.1M, consistent with the $838.9M Government Ultrashort and $780.5M Municipal Intermediate category gains. The largest outflow came from the iShares 20+ Year Treasury Bond ETF (TLT) at $678.6M, followed by the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) at $504.4M, aligning with the $631.5M Government Long and $789.1M Corporate category-level redemptions. The day’s activity reflects continued demand for short-duration and municipal exposure against reduced appetite for long-duration Treasuries and corporates.

Commodity flows totaled $700.8M, led by SPDR Gold Shares (GLD) at $600.8M, consistent with the $597.9M inflow into the Precious Metals category and continuing the class’s $2.64B 5-day and $10.22B 30-day trends. The Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (PDBC) added $88.0M, while outflows were modest, led by the iShares Gold Trust (IAU) at $24.6M and the United States Natural Gas Fund LP (UNG) at $21.9M. The disparity between GLD’s inflow and IAU’s outflow suggests differentiated single-day activity within the gold-tracking space.

Digital asset flows totaled $150.7M on the day, a reversal from the ($472.3M) 5-day figure but still trailing the class’s $4.95B 30-day gain. The iShares Bitcoin Trust ETF (IBIT) led with $183.7M and the Grayscale Zcash Trust (ZCSH) added $46.6M. The iShares Ethereum Trust ETF (ETHA) posted the largest outflow at $42.9M, followed by the ProShares Bitcoin ETF (BITO) at $17.1M, indicating divergent single-day demand between Bitcoin and Ethereum-linked products.

Non-Traditional flows reached $2.06B, dominated by September buffer-fund resets, with the FT Vest U.S. Equity Buffer ETF – September (FSEP) leading at $1.01B and the FT Vest Nasdaq-100 Buffer ETF – September (QSPT) adding $657.8M, consistent with the $2.25B Buffer – Equity category total. On the leveraged side, the Direxion Daily Semiconductor Bear 3X ETF (SOXS) gained $121.4M while the ProShares UltraPro QQQ (TQQQ) lost $260.7M and the Direxion Daily Semiconductor Bull 3X ETF (SOXL) shed $137.8M, contributing to the $457.5M category-wide outflow in Leverage | Inverse – Equity.

Recent launches span a range of issuers and categories, including T. Rowe Price’s continued ETF rollout with the Small Cap ETF (TSEE), Mid Cap Equity Research ETF (TMID), and Biotech ETF (TDNA), each launching with roughly $10M in AUM. Capital Group’s CG Flagship Equity ETF (CGFS) debuted with a larger $110.9M in assets within the U.S. Large Cap – Blend category. Leveraged and niche products also appeared, including the T-REX 2X Long ASST Daily Target ETF (ASSX) and Yorkville America’s 2X Long MANGOS Plus Daily Target ETF (MNGZ), both launching with sub-$300K in assets, alongside the thematic 800VDC AI Datacenter Ecosystem ETF (HUMM) and Invesco’s BulletShares 2036 Municipal Bond ETF (BSMA), which started with $5.0M.