Sector ETFs Draw $3.8B as Investors Rotate to Defense

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Weekly Channel Summary

The Sector & Industry ETF channel currently oversees 268 ETFs managed by 54 distinct brands, with total Assets Under Management (AUM) reaching $917B as of January 16, 2026. The channel demonstrated robust momentum this past week, attracting $3.84B in net inflows. This weekly performance contributes to a solid Year-to-Date (YTD) flow total of $10.36B and an impressive trailing one-year flow aggregate of $23.12B, signaling sustained investor appetite for targeted equity exposure despite varying sector returns.

This Week’s Performance Leaders and Laggards

Performance this week reflected a defensive shift, as the Consumer Staples category led all sectors with a 3.45% return. Real Estate also showed strength, gaining 3.03%. Conversely, Communication Services was the primary laggard, declining -2.29%, while Health Care and Consumer Discretionary also faced headwinds. On a YTD basis, Industrials remain the dominant leader with an 11.01% gain, contrasting sharply with the early-year struggles seen in the Software and Insurance niches.

Category Performance Snapshot

Category WTD 1 Month 3 Month 6 Month YTD 1 Year
Consumer Staples 3.45% 3.45% 2.94% 1.16% 5.25% 5.14%
Real Estate 3.03% 5.34% 3.76% 6.03% 4.73% 9.75%
Industrial 2.73% 12.12% 13.83% 19.24% 11.01% 34.34%
Energy 2.62% 8.60% 12.85% 17.37% 6.16% 4.85%
Utilities 2.25% 1.94% -4.11% 8.06% 2.13% 14.49%
Materials 2.01% 11.57% 14.41% 18.79% 10.13% 22.61%
Information Technology 0.50% 5.76% 5.72% 20.97% 4.70% 31.70%
Financials -0.13% 2.42% 10.69% 9.50% 2.27% 15.81%
Consumer Discretionary -1.04% 2.39% 6.25% 10.72% 4.12% 10.54%
Health Care -1.10% 1.37% 10.21% 21.02% 0.97% 18.16%
Comm Services -2.29% -0.31% 2.58% 10.16% -1.59% 22.19%

Top & Bottom 5 ETFs by Weekly Performance

The single best-performing ETF this week was the DVRE (WEBs Real Estate XLRE Defined Volatility ETF), which surged 8.35%. On the other end of the spectrum, the software sector took a heavy hit, with the IGV (iShares Expanded Tech-Software Sector ETF) dropping -6.33% and the XSW (State Street SPDR S&P Software & Services ETF) falling -4.93%.

Ticker Fund Name WTD Performance
Top Performers
DVRE WEBs Real Estate XLRE Defined Volatility ETF 8.35%
PRN Invesco Dorsey Wright Industrials Momentum ETF 6.79%
MISL First Trust Indxx Aerospace & Defense ETF 6.03%
DVDN Kingsbarn Dividend Opportunity ETF 5.82%
DVXP WEBs Consumer Staples XLP Defined Volatility ETF 5.81%
Bottom Performers
IGV iShares Expanded Tech-Software Sector ETF -6.33%
XSW State Street SPDR S&P Software & Services ETF -4.93%
DVXF WEBs Financial XLF Defined Volatility ETF -4.74%
DVXC WEBs Communication Services XLC Defined Volatility ETF -4.72%
IAK iShares U.S. Insurance ETF -3.54%

Analyzing the Weekly Flows

The channel attracted a total of $3.835B in net flows this week. The Financials category was the most popular, securing $1,252M in new assets and bringing its total AUM to $103.4B. Consumer Staples also saw significant investor interest with $955M in inflows, followed closely by Energy ($902M). On the flip side, Consumer Discretionary experienced the largest redemption, with $446M exiting the category.

Category Flows Summary

Category Fund Count AUM 5 Day Flow 30 Day Flow YTD Flow 1 Year Flow
Financials 34 $103.4B $1,252M $1,642M $2,574M $696M
Consumer Staples 13 $28.3B $955M $375M $716M -$553M
Energy 31 $49.0B $902M $1,555M $1,724M -$8,131M
Information Technology 33 $353.6B $851M $2,897M $2,313M $10,033M
Industrial 28 $76.1B $370M $2,940M $2,218M $9,363M
Utilities 11 $38.4B $260M -$83M $2M $6,835M
Comm Services 7 $35.9B $127M $105M -$62M $3,216M
Health Care 32 $99.8B $33M $1,145M $2,055M $380M
Materials 10 $11.1B -$207M $286M $254M $200M
Real Estate 52 $84.7B -$261M $57M -$514M $4,202M
Consumer Discretionary 15 $36.2B -$446M -$632M -$928M -$3,132M

Top & Bottom 5 ETFs by 5-Day Flow

The XLP (State Street Consumer Staples Select Sector SPDR ETF) led the way with a massive $1,010M in weekly inflows, reflecting the defensive sentiment mentioned earlier. In contrast, the XLRE (State Street Real Estate Select Sector SPDR ETF) and the XBI (State Street SPDR S&P Biotech ETF) saw the largest outflows, shedding -$538M and -$481M, respectively.

Ticker Fund Name 5-Day Flow
Inflows
XLP State Street Consumer Staples Select Sector SPDR ETF $1,010M
XLF State Street Financial Select Sector SPDR ETF $968M
SMH VanEck Semiconductor ETF $884M
XLE State Street Energy Select Sector SPDR ETF $630M
XLV State Street Health Care Select Sector SPDR ETF $346M
Outflows
XLRE State Street Real Estate Select Sector SPDR ETF -$538M
XBI State Street SPDR S&P Biotech ETF -$481M
IGV iShares Expanded Tech-Software Sector ETF -$462M
XLY State Street Consumer Discretionary Select Sector SPDR ETF -$316M
XLB State Street Materials Select Sector SPDR ETF -$195M

Issuer League Table Update

SPDR remains the dominant force in the sector with a 41.65% AUM market share, followed by Vanguard at 25.07%. SPDR also secured the top spot for weekly flows, gathering $2,250M. In contrast, iShares—the third-largest issuer by market share—saw the largest weekly outflow among top issuers, losing -$141M in net assets.

Top 5 Issuers by AUM

Brand Fund Count AUM AUM Market Share
SPDR 30 $381.75B 41.65%
Vanguard 12 $229.76B 25.07%
iShares 49 $147.96B 16.14%
VanEck 11 $47.31B 5.16%
Fidelity 12 $34.64B 3.78%

Top & Bottom 3 Issuers by 5-Day Flow

Brand 5-Day Flow
Inflows
SPDR $2,250M
VanEck $818M
Fidelity $330M
Outflows
iShares -$141M
US Global -$69M
ProShares -$3M

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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.