ETF Investors Trade Crypto and Gold for Semiconductors in June
June ETF Flows Highlights US exchange-traded fund inflows surpassed $192.9 billion in June Technology ETFs accounted for more than $15 billion of that, driven by memory chip- and semiconductor-focused ETFs The lion’s share of assets continued to pour into S&P 500 ETFs Vanguard S&P 500 ETF VOO became the first ETF to cross the $1 trillion threshold SPDR Gold Shares ETF GLD shed $50 billion from its January peak of $188 billion through the end of June, following weak performance Digital asset ETFs continued to lose money as cryptocurrency investors lost confidence in a recovery BlackRock’s iShares ETFs dominated inflows and brought in more than twice as much new money as second-place Vanguard The exhibit below shows June returns for a sample of ETFs that serve as proxies for major asset classes. A blended global portfolio lost just 8 basis points last month as US large-cap stocks and bonds moved in opposite directions. Stock Market Summary US large-cap stocks underperformed their mid- and small-cap peers as mega-cap stocks pulled back in June. Each of the Magnificent Seven stocks ended the month in the red, with Meta Platforms META down almost 11%, Nvidia NVDA 5%, and Microsoft MSFT dropping over 17%. IShares Core S&P 500 ETF IVV ended the month down by just 1.21% despite nine of its top 10 holdings showing negative returns for June. While mega-cap technology stocks lagged, their losses were padded by strong returns from semiconductor and memory stocks as the AI trade shifted toward hardware and away from the hyperscalers. Micron Technology MU , AMD AMD , Intel INTC , and Applied Materials AMAT were all among the ETF’s top 20 holdings, and each had a positive return ranging from 12.5% to 60.65% in June. Micron became the largest position in iShares MSCI USA Value Factor ETF VLUE , representing roughly one-fourth of its portfolio . Small caps remain attractive in both performance and valuation. iShares Core S&P Small-Cap ETF IJR returned 7.28% while its price/fair value estimate rose to 0.95 in June from 0.91 in May. IShares MSCI USA Momentum Factor ETF MTUM also performed exceptionally well in June, returning 8.67%. However, its fair value estimate also climbed with this month’s strong performance to 1.24 at the end of June from 1.09 in May, moving from moderately overvalued to heavily overvalued. Despite their differing portfolio tilts, all four iShares risk factor ETFs—iShares MSCI USA Minimum Volatility ETF USMV , iShares MSCI USA Momentum Factor ETF MTUM, iShares MSCI USA Quality Factor ETF QUAL , and iShares MSCI USA Value Factor ETF VLUE—delivered a positive total return in June. That was better than the broad US stock market represented by iShares Core S&P Total U.S. Stock Market ETF ITOT , which declined by 0.48%. Bond Market Summary Long-duration bonds remain out of favor as interest rate uncertainty continues to be high. Kevin Warsh succeeded Jerome Powell as chair of the Federal Reserve in May, and investors have yet to see what kind of issues will prompt the new Fed chair to act. Inflation, jobs, and the broader economy appear to be moving in different directions. Some investors were willing to sacrifice a small amount of yield in exchange for substantially lower duration risk. The long government bond Morningstar Category saw more than $3 billion in outflows in June, with iShares 20+ Year Treasury Bond ETF TLT accounting for roughly two-thirds of withdrawals. Meanwhile, iShares 0-3 Month Treasury Bond ETF SGOV attracted nearly $4 billion of inflows as investors favored the safety and flexibility of short-term Treasury exposure. A relatively flat Treasury yield curve has made that trade-off easy to justify. As of the end of June, investors could earn a 3.98% yield on one-year Treasuries compared with a 4.91% yield on the 30-year Treasuries while assuming far less interest rate risk. The bottom line is that investors continue to favor less duration risk over the modest yield advantage offered by long-term bonds amid the Fed’s leadership transition and an uncertain monetary policy outlook. Gold and Bitcoin Are Lagging Behind Digital assets and commodities had strong performance and inflows in 2025, but they appear to have passed their past their peaks. Outflows from the digital assets category logged their worst month on record in June, with investors pulling $3.6 billion out of ETFs as bitcoin struggles to regain momentum and reach a value anywhere near its 2025 all-time highs. IShares Bitcoin Trust ETF IBIT shed $3.36 billion in assets alone. Commodities had a volatile start to the year with global uncertainty surrounding the war in Iran and its side effects. Energy companies broadly benefited from oil supply restrictions. State Street Energy Select Sector SPDR ETF XLE was the second-best-performing sector ETF in State Street’s sector lineup over the first six months of the year. Gold proved much more popular than energy stocks early in the year. GLD rose 15.61% in January alone as the price of gold climbed to new highs. However, it dropped more than 19% over the ensuing five months, and outflows followed. Together, GLD and iShares Gold Trust IAU lost almost $5 billion in June and more than $12 billion since the beginning of the year. How Investors Responded Investors were undeterred by lagging large-cap stocks. Both domestic US and foreign large-blend categories collected the most new money, with ETFs in the technology category not far behind. The vast majority of large-blend assets was collected through broad, passive index funds like IVV, State Street SPDR Portfolio S&P 500 ETF SPYM , and Vanguard Total Stock Market ETF VTI . They continue to collect billions of new inflows through almost all market conditions. Two tech funds also made the list of ETFs with the largest inflows. IShares Semiconductor ETF SOXX and Roundhill Memory ETF DRAM drew investor interest as the AI trade evolves. The Roundhill ETF broke last month’s record high inflows by almost a billion dollars, pulling in $9.2 billion in June. The iShares ETF had $4.24 billion in inflows, more than double the inflow from its previous month’s all-time high. It was launched in 2001 but never had a monthly net inflow larger than $1 billion before May of this year. The Biggest, the Largest VOO, which usually tops the list of ETFs with the largest inflows, was among the ETFs with the largest outflows in June. At the beginning of the month, the ETF became the first ETF to surpass $1 trillion in assets. However, soon after hitting that milestone, it dropped below the trillion-dollar mark and ended June with $4 billion less than what it started the month with. That’s rare for an ETF that has historically had sticky flows. Over the past five years, it has had just six individual months with a net outflow. Vanguard and iShares continued to dominate the ETF landscape in June, maintaining the two largest shares of investor inflows. IShares gathered nearly $68 billion of net inflows in June, the highest of any asset manager, while Vanguard followed with roughly $32.5 billion. Firms prioritizing low costs, transparency, and capturing broad markets continue to pull in the bulk of new ETF assets.
Source: Morningstar