ETF & ETP Market Trends & Investor Sentiment: H1 2026 Flow and Tell

Flow & Tell brings together ETF flow trends (‘Flow’) and real-time investor sentiment from BlackRock’s polling data (‘Tell’). 

• ETF flows surged to a record first half, powered by a resurgence in U.S. equities and renewed demand for sector-specific exposures.
• Fixed income ETFs gathered nearly $292 billion in H1 as investors balanced risk-taking with continued demand for income.
• Commodity and digital asset sentiment weakened in Q2 as higher interest rates weighed on non-income-producing assets.
• Investor sentiment recovered from March's geopolitical-driven pullback, though allocations increasingly favored alternatives and private markets alongside equities, signaling a more diversified risk appetite.

The first half of 2026 set a fresh new record for the strongest first half of ETF inflows ever, even as markets navigated volatility and moved back and forth between confidence and caution. The industry added $1 trillion of net flows, nearly double the previous record, which was a 86% jump from last year. Equity ETFs continue to be a primary growth engine, gathering $680 billion, more than double YoY. This comes as the fundamental market backdrop remains supportive, on both the macro and micro: U.S. economic growth remains above longer-run trends, and S&P 500 earnings revisions continue to inflect higher.¹

Based on ETF flows, investors are moving into 3Q rotating toward U.S. equities and targeting sector exposures, maintaining strong demand for fixed income, and likely seeking diversification through alternatives and private markets rather than broad market beta alone.

After a softer start to the year, investors steadily rotated back toward U.S. equities as markets rebounded sharply from the March lows. Strong corporate earnings helped reinforce investor confidence, supporting renewed risk appetite and driving sustained inflows into U.S. equity exposure throughout the remainder of the first half of 2026.

• International equities got off to a strong start in 2026 as investors sought diversification amid tariff uncertainty, a weaker U.S. dollar, and improving prospects outside the U.S. As a result, just 68% of year-to-date equity ETF flows went to U.S.-focused funds, below 73% last year.
• Strong U.S. earnings and the view that the U.S. economy was relatively insulated from geopolitical conflict brought investors back to domestic equities. The share of U.S.-listed equity ETF flows allocated to U.S.-focused funds increased every month in 2026, reaching the mid-80% range by June.
• The shift back to U.S. equities was global. Flows into U.S.-focused products in Europe quadrupled year-over-year, reversing much of the home-market preference seen in 2025. Investors also became more targeted, with sector ETFs capturing 11% of equity flows, the highest share since 2021, led by Technology, Energy, and Industrials.

Fixed income ETFs gathered $292 billion in H1, up nearly 65% from 2025.

• The belly of the curve remained the preferred destination for bond investors. Intermediate-term bond ETFs gathered $60 billion in H1, outpacing the combined inflows to both short and long duration.
• Yet investors never fully abandoned cash, with many allocating to cash alternatives. The iShares 0-3 Month Treasury Bond ETF (SGOV) remained a flow powerhouse in Q2, attracting around $13 billion, accounting for about 9% of all fixed income ETF inflows during the quarter and in-line with its average quarterly inflow over the past two years.

Commodity and alternative sentiment deteriorated sharply in Q2, swinging from $79.5 billion of inflows in 2025 to $12.4 billion of outflows in the first half of 2026. Higher interest rates and a stronger dollar have weighed on non-yielding, alternative stores of value like gold and bitcoin, pushing prices lower and flows followed suit.

• The trend accelerated in June, when U.S.-listed commodity ETPs recorded $6.8 billion of outflows, the second-largest monthly redemption in at least two years. Gold ETPs accounted for most of the withdrawals, reversing strong inflows earlier in the year. For more on the outlook for gold, see our recent gold article.
• Spot bitcoin ETPs logged their largest month of redemptions since inception, recording $4.2 billion of net outflows in June after $2.5 billion in May, bringing cumulative net redemptions to roughly $5.3 billion year-to-date.

ETF & ETP flows reveal recent allocations, but we lean into our polling data for investor insights.

Our "Tell" section captures real-time investor sentiment through BlackRock polling data, providing color into how investors are thinking about markets, risks, and portfolio positioning.

So far this year, investor sentiment has moved through three phases: early-year optimism, a sharp cautionary period in March spurred by the escalation of conflict in the Middle East, and a more balanced recovery into June.

Figure 3: Three phases defined investor sentiment in H1 2026

We regularly poll our clients and track whether they expect markets to move higher (bullish) or lower (bearish).

The latest June reading shows clients are still constructive, with 44% bullish versus 14% bearish, but the tone is more measured than the peak at the beginning of the year. In other words, clients are no longer in the defensive posture seen in March, but they are also not expressing unchecked risk appetite.

Portfolio behavior reinforces this more selective stance. Investors are still redeploying capital, but the strongest planned net moves now point to a mix of equity risk and diversification. From the clients planning on making portfolio moves:

• A net 13.4% of respondents plan to add Alternatives, followed by U.S. equities (+4.5%), Private Markets (+6.0%), and Emerging Market equities (+4.5%).
• At the same time, clients plan to fund these reallocations from cash (-11.6%), core bonds (-8.5%), and taxable fixed income (-3.1%).
• The key shift in June vs. April is that U.S. equity demand has cooled, while demand for Alternatives and Private Markets has strengthened. This suggests clients are still constructive but increasingly focused on building more diversified exposure rather than simply adding broad market beta.