Large-Cap Equity ETFs See Significant Outflows Amid Year-End Positioning

Date: December 23, 2025

Market Overview

Today’s net fund outflows were heavily concentrated in broad U.S. equity ETFs, with several S&P 500-focused and growth-oriented funds leading the exodus. The top 10 outflow ETFs include five S&P 500 trackers, two growth/buffer funds, and sector-specific products like cybersecurity and small-cap dividend ETFs. While no single asset class dominates beyond equities, the data suggests a potential shift away from large-cap and growth exposures, given the prominence of these themes in the outflow rankings. YTD performance varies across the group, with growth-oriented funds like VUG down 20.36% and S&P 500 ETFs down 17–17.5%, potentially influencing investor caution.

ETF Highlights

VOO - Vanguard S&P 500 ETFAs the largest S&P 500 ETF by AUM ($815.10B), VOO’s $2.56B outflow underscores a broad retreat from passive large-cap exposure. Its 17.42% YTD decline, coupled with its massive scale, may indicate investors trimming positions in heavily weighted benchmarks ahead of year-end.

SPY - SPDR S&P 500 ETF TrustSPY, the second-largest S&P 500 fund ($706.87B AUM), saw $3.18B in outflows. Its 17.38% YTD performance aligns with broader market weakness, and the outflow could signal a tactical rebalancing away from large-cap equities, particularly as year-end liquidity needs emerge.

IWM - iShares Russell 2000 ETF

The Russell 2000 ETF’s $2.62B outflow reflects a pullback from small-cap stocks, which have underperformed this year (14.08% YTD). With $75.86B in assets, IWM’s outflow may suggest reduced appetite for small-cap volatility amid uncertain near-term prospects.

RDVY - First Trust Rising Dividend Achievers ETFRDVY’s $1.60B outflow highlights a shift away from dividend-focused equities, despite its 19.16% YTD gain. Its $19.21B AUM suggests it may have attracted profit-taking after a strong performance year, though the outflow could also signal caution toward income strategies in a rising rate environment.

VUG - Vanguard Growth ETFVUG’s $1.55B outflow is notable given its 20.36% YTD decline, the steepest among the top 10. As a growth-focused fund, its outflow may indicate a rotation away from growth stocks, which have faced sustained pressure in 2025.

FDEC - FT Vest U.S. Equity Buffer ETF - DecemberThe $1.01B outflow from FDEC, a buffer ETF tied to U.S. equities, could reflect reduced demand for volatility-mitigated products as year-end approaches. Its modest $2.13B AUM and 15.23% YTD performance suggest it may have seen tactical exits from risk-averse investors.

CIBR - First Trust NASDAQ Cybersecurity ETFCIBR’s $988M outflow points to a sector-specific pullback in cybersecurity, a niche tech theme. Its 14.75% YTD decline and $11.04B AUM may indicate investors reassessing sector-specific bets amid broader tech equity declines.

SDVY - First Trust SMID Cap Rising Dividend Achievers ETFSDVY’s $865M outflow aligns with reduced interest in SMID-cap dividend strategies. Despite a 9.43% YTD gain, its smaller $9.61B AUM may make it more susceptible to tactical shifts, particularly as broader equity markets weaken.

QQEW - First Trust Nasdaq-100 Select Equal Weight ETFQQEW’s $611M outflow reflects a retreat from Nasdaq-100 exposure, even with a 15.25% YTD performance. Its $1.91B AUM suggests niche investors may be exiting equal-weight tech structures amid broader tech sector rotation.

VTI - Vanguard Total Stock Market ETFVTI’s $525M outflow, despite $573.02B in assets, highlights a broad-based reduction in total market exposure. Its 16.88% YTD decline may have prompted investors to scale back in a diversified equity fund as year-end positioning takes shape.

Notable Trends / Surprises

The dominance of S&P 500 ETFs (VOO, SPY) and growth-oriented funds (VUG) in the outflow rankings suggests a coordinated rotation away from large-cap and growth equities. Additionally, the presence of both broad-market (VTI) and sector-specific (CIBR, SDVY) outflows indicates a broad risk-off sentiment across equity themes, rather than a targeted shift. The inclusion of buffer ETFs like FDEC further underscores tactical adjustments by investors seeking to manage year-end volatility.

Conclusion

Today’s outflows may indicate a defensive repositioning by investors, particularly in large-cap and growth equity strategies. The scale of outflows from S&P 500 ETFs and the underperformance of growth and tech-linked funds could reflect a cautious approach ahead of year-end, with investors potentially reducing exposure to overvalued or underperforming segments. While the data does not confirm broader macroeconomic drivers, the thematic consistency across the top 10 ETFs—ranging from total market to niche sectors—points to a measured de-risking within U.S. equities.