Wall Street loves a good comeback tale, and June’s ETF flows provided just that. With $102.7 billion in net inflows, according to FactSet data, the U.S. ETF business rebounded from its April slowdown, posting a 17% increase over May and taking total assets under management to $11.5 trillion. But the real tale? A few ETFs and issuers have left everyone else in the dust, flashing neon signs that investors are wagering on high-beta (highly volatile) funds.
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High-Conviction Inflows
Rafferty Asset Management booked a stunning $256.6 million in June inflows, a 730% recovery from May’s painful outflow of more than $40 million. Close behind was Tuttle Capital, taking in $68.7 million, another flip after a drubbing in May. Toroso Investments generated $7.8 million in new inflows, a small but significant amount.
What’s driving it? A league of single-stock and leveraged ETFs that are high-risk, high-reward, and extremely popular today.
Eight issuers launched 23 new single-stock ETFs in June — a notable increase. They are not for the weak of heart: 75% are geared (leveraged/inverse) and target tactical, high-conviction trades. Tesla (NASDAQ:TSLA), Nvidia (NASDAQ:NVDA), Palantir (NASDAQ:PLTR) and MicroStrategy (NASDAQ:MSTR) continue to be investor favorites, receiving the most issuer attention.
Funds That Dominated In June
| Fund | Type | June Net Flow |
|---|---|---|
| Direxion Daily TSLA Bull 2X Shares (NASDAQ:TSL) | Leveraged | $134.9 million |
| YieldMax MSTR Option Income ETF (NYSE:MSTY) | Single-Stock | $83.9 million |
| GraniteShares 2x Long PLTR ETF (NASDAQ:PTIR) | Leveraged | $34.9 million |
| T-Rex 2x Long NVDA ETF (BATS:NVDX) | Leveraged | $52.8 million |
| Direxion AAPL Bull 2X ETF (NASDAQ:AAPU) | Leveraged | $45.3 million |
| Direxion MSFT Bull 2X ETF (NASDAQ:MSFU) | Leveraged | $39.6 million |
Altogether, these six ETFs collectively brought in more than $391 million in June, predominantly from leveraged bets on the large-cap tech giants.
Looking at year-to-date inflows, FactSet revealed:
- TSL (Tesla 2X) tops YTD flows with $310.8 million.
- MSTY (MicroStrategy option income) takes second with $198 million.
- PTIR (Palantir 2X) is not far behind at $98.6 million.
Sector Signals: Where The Money Is Heading
June’s sector flows told a distinct story: investors are gravitating back into Tech, Consumer Discretionary, and Communication Services— all areas connected to AI, platforms, and online consumption.
Financials, Energy, and Health Care experienced ongoing outflows, meanwhile. This was evident from the $707 million inflows recorded in SPDR Select Sector Fund – Technology (NYSE:XLK), $459 million in Materials Select Sector SPDR Fund (NYSE:XLB) and $601 million in the Communication Services Select Sector SPDR Fund (NYSE:XLC).
Conversely, $1.5 billion flowed out of SPDR Select Sector Fund – Financial (NYSE:XLF), $303 million from SPDR Select Sector Fund – Energy (NYSE:XLE) and $661 million from SPDR Select Sector Fund – Health Care (NYSE:XLV).
And while fixed income flows fell 16% to $32 billion, equity flows rose 29% to $57 billion, showing that investors aren’t quite risk-averse, but are merely growing more discerning.
Watch The Leaders, Read The Signals
Although June’s overall inflows were robust, it’s the degree to which investor money has flowed into a handful of high-beta ETFs that’s most illustrative. It is a sign of unprecedented conviction, not merely in big tech and AI, but in tactical, aggressive investing. Whether the giants of this rally can sustain their dominance will be determined by macro tailwinds and how long this momentum mojo can last.
For the time being, the message from ETF land is unmistakable: risk is back on, primarily for those fearless enough to ride it 2X.
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