ETF Daily Fund Outflow Report

Date: July 31, 2025
Headline: Large-Cap Equity ETFs and Leveraged Products See Outflows Amid Mixed YTD Performance

Market Overview
Today’s fund flows reflect a mixed sentiment, with investors withdrawing capital from large-cap equity benchmarks, leveraged products, and tax-exempt bonds, while maintaining exposure to select sectors and international markets. The top outflows were concentrated in S&P 500 ETFs, which have delivered strong year-to-date (YTD) returns, suggesting possible profit-taking. Meanwhile, leveraged ETFs with aggressive exposure to equities and semiconductors also saw significant outflows, potentially indicating a reduction in speculative positioning. The rotation away from bond strategies, particularly tax-exempt municipal bonds, may signal shifting risk preferences amid macroeconomic uncertainty.

ETF Highlights
1. SPY - SPDR S&P 500 ETF Trust
As the largest S&P 500 ETF with $657.72B in assets, SPY’s $1.78B outflow may reflect tactical profit-taking after a 7.85% YTD gain. Its size amplifies the scale of the outflow, though the continued inflow into alternatives like VOO and IVV suggests competitive dynamics within the S&P 500 space.

2. PBUS - Invesco MSCI USA ETF
Tracking broad U.S. equities, PBUS saw $578.1M exit amid a 7.96% YTD rise. Its $7.88B AUM positions it as a niche alternative to larger S&P 500 funds, and the outflow could indicate a shift toward more focused strategies or sector-specific allocations.

3. VOO - Vanguard S&P 500 ETF
Despite a $531.5M outflow, VOO remains the largest S&P 500 ETF with $712.78B in assets. Its 7.83% YTD return aligns with peers, suggesting investors may be rebalancing within the asset class rather than exiting equities entirely.

4. IVV - iShares Core S&P 500 ETF
IVV’s $415.9M outflow follows a 7.85% YTD gain. With $641.98B in AUM, it faces similar dynamics to SPY and VOO, highlighting competitive pressures among passive S&P 500 offerings.

5. IWM - iShares Russell 2000 ETF
The Russell 2000 ETF lost $291.2M despite a modest -0.71% YTD performance. Its $63.37B AUM suggests persistent underperformance relative to large-cap benchmarks may be prompting caution in small-cap exposure.

6. TSLL - Direxion Daily TSLA Bull 2X Shares
TSLL’s $262.9M outflow follows an -61.21% YTD loss, reflecting the challenges of leveraged, single-stock exposure. The ETF’s $6.17B AUM indicates significant unwinding of speculative positions in Tesla, possibly amid profit-taking or risk mitigation.

7. SOXL - Direxion Daily Semiconductor Bull 3X Shares
SOXL’s $226.8M outflow aligns with an -8.53% YTD decline, underscoring volatility in leveraged semiconductor bets. Its $13.92B AUM suggests investors may be scaling back aggressive exposure to the sector.

8. VTEB - Vanguard Tax-Exempt Bond ETF
VTEB’s $199.1M outflow occurred despite a -2.89% YTD drop, potentially signaling a shift away from municipal bonds as investors reassess yield opportunities in a rising rate environment.

9. XLC - Communication Services Select Sector SPDR Fund
XLC’s $149.95M outflow contrasts with a 10.95% YTD gain, the highest among the top 10. The communication services sector’s strong performance may have prompted profit-taking, despite its $23.61B AUM.

10. BBJP - JPMorgan BetaBuilders Japan ETF
BBJP’s $147.1M outflow occurred despite a robust 10.75% YTD return, indicating a possible rotation from international equities to domestic or sector-specific opportunities.

Notable Trends
The top outflows highlight a rotation out of large-cap equity benchmarks and leveraged products, even as these ETFs have delivered strong YTD returns. The simultaneous outflows from both SPY/VOO/IVV and leveraged ETFs like TSLL/SOXL suggest a recalibration of risk exposure, with investors potentially shifting toward smaller sectors or reducing speculative bets. The outflows from VTEB and BBJP further illustrate a nuanced shift in fixed income and international allocations.

Conclusion
Today’s flows may signal a cautious repositioning, with investors reducing exposure to large-cap benchmarks and leveraged strategies after strong YTD gains. The outflows from leveraged ETFs could indicate a broader risk-off sentiment, while the movement from tax-exempt bonds suggests a search for higher-yielding opportunities. Over the week, if these trends persist, they may reflect a market prioritizing sector-specific or active strategies over broad, passive exposure, alongside a potential pivot toward higher-risk assets amid evolving macroeconomic signals.