Strong Inflows into Core U.S. Equities and International Exposure

Date: 2026-01-05 The Weekly Report's Time Range: 12.29-1.02

Market Overview

This week’s ETF fund flows highlight a strong preference for U.S. large-cap equities and international exposure, with the top five ETFs all being U.S. equity or global asset allocations. Investors appear to be consolidating positions in broad-based equity indexes, particularly the S&P 500 and total market exposure, alongside a notable inflow into the Total International Stock ETF. While bond ETFs saw mixed results, the top inflow went to an ultra-short Treasury ETF, which may indicate a risk-off shift or a flight to liquidity amid the start of the new year. No clear sector or thematic rotation is evident from the inflows, but the presence of value and total market ETFs suggests a potential re-evaluation of fundamentals or diversification strategies.

ETF Highlights

1. IVV (iShares Core S&P 500 ETF): The top in-flow ETF, IVV, tracks the S&P 500 and is one of the largest core equity ETFs in the market. Its inflow may indicate continued investor confidence in the broad U.S. equity market. With an AUM of $762.86B, the inflow highlights the enduring appeal of a low-cost, diversified equity benchmark. Its 0.18% performance for the week aligns with a stable and measured market environment.

2. VOO (Vanguard S&P 500 ETF): Another major S&P 500 ETF, VOO, attracted significant inflows. With a YTD performance of 0.19%, it reflects a similar sentiment to IVV. Its high AUM of $840.87B underscores its role as a go-to vehicle for passive exposure to the large-cap U.S. equity index. The inflow could point to rebalancing activity or ongoing inflows into the S&P 500 space.

3. SPY (SPDR S&P 500 ETF Trust): As the oldest S&P 500 ETF, SPY remains a popular option for investors. The 0.18% weekly performance and $713.34B AUM suggest that it continues to be a dominant player in the large-cap U.S. equity space. The inflow may reflect continued trust in the index as a core holding, particularly at the start of the year.

4. VTI (Vanguard Total Stock Market ETF): VTI offers broad exposure to the entire U.S. equity market, including small- and mid-cap stocks. The inflow into this ETF may indicate an investor appetite for diversification beyond the S&P 500. With a YTD performance of 0.31% and an AUM of $572.80B, it remains a key player in the total market segment.

5. SPYM (State Street SPDR Portfolio S&P 500 ETF): SPYM is a lower-cost S&P 500 option, and its inflow could suggest that cost-conscious investors are rotating into it from similar products. With a YTD performance of 0.21%, it is performing in line with other S&P 500 ETFs. Its AUM of $97.13B reflects its role as a niche but growing option for passive investors.

6. VXUS (Vanguard Total International Stock ETF): VXUS offers exposure to non-U.S. equities and is the only international equity ETF in the top 10. The 1.46% YTD performance is the strongest among the list, and the inflow may suggest increased appetite for global diversification or expectations of outperformance in international markets. With an AUM of $122.23B, it is a significant international play for many portfolios.

7. VTV (Vanguard Value ETF): Focused on value stocks within the U.S. equity market, VTV’s strong 0.95% weekly performance attracted inflows. This could possibly reflect a shift in sentiment toward value investing or a rotation into lower valuation stocks. With an AUM of $159.14B, VTV provides a broad-based value tilt and may be seen as a way to access more fundamentally driven equities.

8. SGOV (iShares 0-3 Month Treasury Bond ETF): The only fixed income ETF in the top 10, SGOV is focused on ultra-short Treasury bonds. Its 0.03% YTD performance is modest, but the inflow may indicate a flight to liquidity or a preference for near-zero-risk assets at the start of the year. With an AUM of $68.89B, it is a small but important part of many portfolio allocations for cash-like safety.

9. IVV (iShares Core S&P 500 ETF): Already mentioned as the top in-flow ETF, IVV’s position here reinforces the strength of the S&P 500 as a core holding. Its performance and AUM suggest it is a go-to option for investors seeking broad U.S. equity exposure with minimal turnover and cost.

10. VOO (Vanguard S&P 500 ETF): VOO’s appearance in the top 10 highlights the ongoing popularity of the S&P 500 index. The inflow may reflect both new investor allocations and rebalancing activity from institutional or retail investors. Given its performance and AUM, it appears to be a key vehicle for capturing S&P 500 returns.

Notable Trends / Surprises

This week’s inflows underscore a strong preference for U.S. equity exposure, particularly within the S&P 500 and total market segments. The inflow into VXUS, the only international equity ETF in the top 10, is a notable surprise, suggesting that global diversification may be gaining attention. Additionally, the inflow into SGOV highlights a modest but clear shift toward ultra-short-duration fixed income, which could reflect a cautious approach to risk. The dominance of S&P 500 ETFs may point to a broader trend of consolidation in core equity holdings as the year begins.

Conclusion

The week’s fund flows may indicate a preference for core U.S. equity exposure and international diversification, with inflows into S&P 500 and total market ETFs outpacing other categories. The inflow into an ultra-short Treasury ETF could reflect a cautious stance, while the strong inflow into the Total International Stock ETF may suggest a growing interest in global markets. Overall, the flows could point to a balanced approach to risk and return at the start of 2026.