International equities, value stocks and cyclicals lead ETF demand in February
ETFs continued their rapid asset gathering in February, with US-listed ETFs attracting $173 billion of inflows.
That brought total ETF inflows for 2026 to $334 billion through the first two months of the year, the strongest start on record and a pace that could translate to roughly $2 trillion in inflows for the full year.
New stats from State Street Investment Management show that global equities finished February modestly higher, rising 1.2% overall as strong returns in non-US markets (up 4.9%) offset a 0.9% decline in US equities. Core bonds also advanced as yields declined.
International equity ETFs were a major driver of the month’s activity. Funds focused on non-US markets gathered $57 billion in February, marking the second-largest monthly inflow on record. Those flows accounted for 51% of all equity ETF inflows during the month, even though non-US equity ETFs represent roughly 21% of total equity ETF assets.
Developed markets outside the United States drew $24 billion, while emerging market ETFs collected $11 billion and single-country funds took in $9 billion.
Despite the strong demand for international exposure, US equity ETFs still saw significant inflows, attracting $54 billion in February.
Fixed income flows top $50 billion again
Bond ETFs also posted strong inflows, collecting $52 billion in February. It marked the second consecutive month that fixed income ETFs surpassed $50 billion in inflows.
Within government bonds, flows showed a preference for shorter maturities. Short-term government bond ETFs gathered $8 billion and intermediate-term funds attracted $4 billion. Long-term government bond ETFs experienced outflows during the month.
In credit markets, investment-grade corporate bond ETFs recorded $12 billion of inflows. By contrast, below-investment-grade credit exposures, including high-yield bonds and bank loans, saw modest outflows totaling roughly $220 million.
Inflation-protected bond ETFs drew $1.8 billion in February and have attracted $11 billion over the past 12 months.
Sector ETFs hit record start to the year
Sector ETFs gathered $10 billion in February, following $19 billion in January, giving the category its strongest start to a year on record. Total sector ETF assets surpassed $1 trillion for the first time, reaching $1.026 trillion.
Cyclical sectors led the flows. Industrials, energy and materials combined for $8.5 billion in inflows during February. Financial sector ETFs recorded $5 billion in outflows during the same period.
Technology ETFs attracted $6 billion of inflows despite declines in the sector’s market performance during the month.
Among investment styles, value ETFs drew $15.4 billion in inflows in February while growth ETFs recorded $743 million in outflows.
Small-cap ETFs also saw renewed demand, taking in $5 billion in February after experiencing outflows earlier in the year and throughout 2025.
Active and factor ETFs attract large inflows
Active ETFs recorded $76 billion in inflows during February, though one self-seeded fund accounted for roughly $20 billion of that total. Excluding that fund, the $56 billion in inflows would still rank as the second-largest monthly total on record, just behind January’s $59.8 billion.
Smart beta ETFs also saw strong demand, gathering $20.9 billion in February. Dividend strategies led with $7 billion in inflows, followed by size-focused factor ETFs.
Commodity ETFs attracted $6.8 billion in February, including $4.4 billion directed to gold-related strategies. Broad-based commodity funds have now recorded nine consecutive months of inflows.
Thematic ETFs brought in $1.4 billion during the month. Most of those flows went to funds focused on smart cities, which attracted $1.3 billion.
Across asset classes, every ETF category recorded inflows in February.
