ETF Daily Fund Outflow Report

Date: September 25, 2025

Headline: Equity-Focused ETFs Face Outflows as Caution Persists Amid Mixed YTD Gains

Market Overview
Today’s fund flows highlight a wave of outflows from equity-centric ETFs, with nearly $18 billion exiting the top 10 ETFs. While the magnitude suggests caution, the mix of broad-market, growth-oriented, and sector-specific funds affected points to a potential reassessment of risk appetite. The flows do not clearly favor bonds or defensive sectors, as the impacted ETFs are predominantly growth and momentum-driven equity products. YTD performance across the group ranges from 7.6% to 32.55%, indicating that some outflows may reflect profit-taking in high-performing funds. Macro context remains unclear, though the timing near September’s end could overlap with quarter-end portfolio adjustments or broader market volatility.

ETF Highlights
The Invesco S&P 500 Momentum ETF (SPMO) led outflows with a net exit of $3.44B. As a momentum-focused vehicle tracking the S&P 500, its 26.64% YTD gain may have attracted investors seeking growth, but today’s outflow could signal a rotation away from momentum strategies. With $13.5B in AUM, the ETF’s size amplifies the significance of the withdrawal.

The Vanguard S&P 500 ETF (VOO), which saw $2.72B in outflows, remains a benchmark product for passive exposure to the S&P 500. Up 12.55% YTD and managing $793.44B in assets, its outflow may reflect broader caution in large-cap equities despite its low-cost appeal. Similarly, the SPDR S&P 500 ETF Trust (SPY) faced $766.76M in outflows, though its 12.24% YTD return remains in line with the index’s performance.

Sector-specific outflows included the iShares Russell 2000 ETF (IWM, -$2.6B) and the VanEck Semiconductor ETF (SMH, -$206.8M). IWM, focused on small-cap stocks, has gained 8.3% YTD but may face pressure if investors shift toward defensives. SMH, up 32.55% YTD, could see profit-taking after a strong rally in tech-driven sectors. Growth-oriented products like the Vanguard Growth ETF (VUG, -$1.73B) also faced exits despite a 15.56% YTD gain, suggesting selective risk-off moves in growth stocks.

Factor-based ETFs like the VictoryShares Free Cash Flow ETF (VFLO, -$1.53B) and the Invesco S&P Midcap Momentum ETF (XMMO, -$1.27B) added to the trend. VFLO’s 9.42% YTD return and $6.28B AUM highlight its appeal to income-focused investors, while its outflow may signal shifting factor preferences. XMMO’s 7.6% YTD gain contrasts with its significant exit, potentially reflecting a pullback in midcap momentum strategies.

Notable Trends
The data reveals a pattern of outflows from high-performing, growth- and momentum-oriented ETFs, including both broad-market (VOO, SPY) and niche products (SMH, VFLO). This could indicate a rotation toward underperforming assets or cash, though no clear sectoral tilt emerges. The largest outflows occurred in funds with YTD gains exceeding 15%, pointing to possible profit-taking. Additionally, the scale of outflows from large AUM funds (e.g., VOO, SPY) underscores the broader nature of the trend.

Conclusion
Today’s outflows suggest a tentative shift in sentiment, with investors potentially scaling back exposure to overperforming equity strategies. The focus on momentum, growth, and small-cap funds implies a reassessment of risk, though the absence of inflows into defensive or bond ETFs complicates the narrative. On a weekly basis, if these outflows persist, they may signal a broader pullback in risk-on positioning, particularly in segments that have driven YTD gains. However, without macroeconomic catalysts or sector-specific clues, the move could reflect tactical adjustments rather than a structural shift. Investors may watch for follow-through in upcoming sessions to gauge the durability of this trend.