Large-Cap Equity and Leveraged ETFs See Significant Outflows as Investors Rebalance Holdings

Date: January 21, 2026

Market Overview

Today’s net fund outflows highlight a broad shift in investor positioning, with the top 10 ETFs spanning large-cap equity benchmarks, leveraged products, and sector-specific exposures. While equity-focused ETFs dominate the list, including S&P 500 proxies and value-oriented funds, leveraged and thematic products also feature prominently. The data suggests a potential rotation or profit-taking in assets that have seen strong performance in recent months, though no single asset class accounts for the majority of outflows. The mixed performance across YTD returns and AUM sizes further underscores a nuanced rebalancing rather than a broad selloff.

ETF Highlights

IVV - iShares Core S&P 500 ETF As the largest S&P 500 ETF with $749.95 billion in assets, IVV’s $4.24 billion outflow reflects its role as a proxy for broad equity market sentiment. The fund’s 0.49% intraday gain contrasts with its outflow, potentially signaling tactical rebalancing or margin management by institutional investors. Its sheer size amplifies the significance of the outflow, though the modest YTD performance (up 0.49%) suggests investors may be locking in gains after a period of consolidation.

VOO - Vanguard S&P 500 ETF VOO, the second-largest S&P 500 ETF with $844.88 billion in AUM, saw $1.77 billion in outflows. Its 0.50% intraday gain and 0.49% YTD return mirror IVV’s performance, indicating a coordinated shift between the two major benchmarks. The outflow may reflect a reallocation between providers or a broader reduction in core equity exposure, though the minimal YTD movement suggests no sharp reversal in market confidence.

FTCS - First Trust Capital Strength ETF FTCS, focused on companies with strong balance sheets, experienced $1.35 billion in outflows. The fund’s 3.88% YTD gain suggests recent inflows may have triggered profit-taking. Its niche theme—capital strength—may have attracted investors seeking defensive plays, but today’s outflow could indicate a shift toward more cyclical or growth-oriented assets.

FJAN - FT Vest U.S. Equity Buffer ETF - January FJAN’s $976 million outflow aligns with its structure as a time-limited buffer product. With a 0.44% intraday gain and $1.11 billion in AUM, the outflow may reflect investors exiting the fund as its January-specific risk-mitigation period concludes. The product’s design inherently drives seasonal flows, and today’s movement likely reflects a routine unwinding of temporary allocations.

SOXL - Direxion Daily Semiconductor Bull 3X Shares SOXL, a leveraged semiconductor ETF, saw $779 million in outflows despite a 51.03% YTD surge. The massive gain likely triggered profit-taking, as leveraged products often experience reversions after extended rallies. The intraday gain of 51.03% also highlights its volatility, with investors possibly reducing exposure to lock in gains or avoid decay from daily rebalancing.

AIRR - First Trust RBA American Industrial Renaissance ETF AIRR’s $757 million outflow follows a 16.32% YTD gain, suggesting a rotation away from industrial sectors. The fund’s focus on infrastructure and industrials may have attracted investors during a commodities rally, but today’s outflow could signal a shift toward other cyclical areas or a reassessment of sector valuations.

XLRE - State Street Real Estate Select Sector SPDR ETF XLRE, tracking real estate equities, saw $525 million in outflows. Its 2.97% YTD gain and $7.10 billion in AUM position it as a mid-sized sector fund. The outflow may reflect a rotation away from real estate amid shifting interest rate expectations or a rebalancing toward more economically sensitive sectors.

LQD - iShares iBoxx USD Investment Grade Corporate Bond ETF LQD’s $455 million outflow contrasts with its 0.34% YTD decline, indicating a potential shift in fixed-income allocations. As the largest corporate bond ETF with $27.52 billion in AUM, the outflow could signal a move toward Treasuries or high-yield alternatives, though the minimal performance drag suggests no sharp repricing in credit markets.

IWD - iShares Russell 1000 Value ETF IWD, focused on large-cap value stocks, experienced $329 million in outflows despite a 4.18% YTD gain. The fund’s $69.61 billion in AUM suggests it is a core holding for many investors, and the outflow may reflect a rotation toward growth or a broader market-wide profit-taking in value sectors after recent strength.

DIA - SPDR Dow Jones Industrial Average ETF Trust DIA’s $272 million outflow follows a 2.13% YTD gain and $44.89 billion in AUM. As a proxy for the industrial sector, the outflow may indicate a shift toward more diversified equity exposures or a reassessment of sector-specific risks. The fund’s performance lags behind broader benchmarks, which could contribute to reduced inflows.

Notable Trends / Surprises

The dominance of large-cap equity benchmarks (IVV, VOO) and leveraged products (SOXL) in the outflow rankings suggests a mixed strategy of profit-taking and tactical rebalancing. The presence of both value (IWD) and growth-oriented (DIA) ETFs indicates no clear tilt toward one style. Additionally, the inclusion of a buffer ETF (FJAN) and sector-specific funds (XLRE, AIRR) highlights a rotation away from niche and time-sensitive exposures.

Conclusion

Today’s outflows may indicate a strategic rebalancing by investors, particularly in large-cap equity benchmarks and leveraged products that have seen strong YTD performance. The mixed AUM sizes and sectoral exposures suggest a nuanced shift rather than a broad market selloff. While the top 10 ETFs span both growth and value themes, the emphasis on core S&P 500 proxies and leveraged semiconductors could reflect a recalibration of risk appetite. The data does not point to a systemic shift but rather a tactical adjustment in positioning, possibly in response to recent performance trends.