Exchange Traded Fund (ETF) flows don’t just show what investors are buying, they offer insight into what investors are thinking. And what they’re thinking is changing.
When we compare where money went in 2025 with where it’s going so far in 2026, there’s a clear shift. In 2025, a large share of investor money went into relatively few places, including global, European and US equities.
This year, flows tell a different story.
Investors are casting their net wider, spreading money across a broader mix of regions and sectors. In doing so, many appear to be reducing their reliance on a small number of dominant companies and markets.
In some areas, flows have even done a complete 180. This is a reminder of how quickly leadership can change and why diversification is always important.
This article isn’t personal advice. All investments can rise and fall in value, so you could get back less than you invest, and past performance isn’t a guide to the future. If you're not sure if a course of action is right for you, ask for financial advice.
Investors still favour global equities
One of the most notable themes so far in 2026 has been the continued strength of global equity ETFs.
They were the most popular ETFs in 2025, and this year they’ve already attracted around half of last year’s total flows in just four months. It’s clear investors increasingly prefer a global approach rather than leaning heavily on one market.
There’s also been growing interest in World ex-US ETFs, which track global benchmarks excluding the US. This doesn’t necessarily mean investors are avoiding the US altogether. Instead, it gives them more control over how much of their portfolio is invested there. With the US making up around 72% of global stock market indices, an option excluding the US could be used to diversify a portfolio.
US dominance is fading
US equities were one of the clear favourites last year. Investors put large sums into US equity ETFs, because of confidence in the strength and resilience of the US market. And that popularity hasn’t disappeared in 2026.
Flows into US equity ETFs are still positive, but investors are spreading money globally and across other regional markets.
There’s even been a shift in the US with the popularity of S&P 500 Equal Weight ETFs this year. Unlike traditional benchmarks, an equal weight index invests the same amount into each company, regardless of its size. The idea being, it helps reduce reliance on a small number of very large companies.
Emerging markets take centre stage
Emerging market equity ETFs have been one of the standout areas so far this year, second only to global equities in terms of popularity. While emerging markets also attracted inflows in 2025, the pace has been notably faster.
Investors appear to be looking beyond developed markets, like the US, in search of a broader range of opportunities.
What’s also changed is how investors are accessing emerging markets. Alongside broad emerging market ETFs, flows have picked up in more targeted regional exposures, including Korea, Taiwan and Latin America. These regions have seen more money flowing in during the first four months of 2026 than during the whole of last year.
This points to a more granular and intentional approach, with investors wanting more exposure to specific markets.
Style and sector flows flip direction
Style and sector ETFs are some of the clearest examples of leadership shifting.
In 2025, growth-focused ETFs dominated, particularly in the US. In terms of sectors, Financial Services was a key beneficiary of inflows, while energy saw outflows. But in 2026, that pattern has started reversing. US value ETFs have attracted more interest than growth. Value and income strategies have gained traction as market leadership broadens.
Industrial Materials are still the most popular sector, with inflows running at a faster pace than last year. Energy has moved back into positive territory, supported by higher oil prices and rising geopolitical tensions in the Middle East. In contrast, Financial Services has swung into outflows.
What about assets other than shares?
Diversification isn’t just happening within shares. Bond ETFs are also seeing interest, though investors remain selective.
European government bond ETFs have been the most popular area, with strong inflows continuing so far this year. UK government bond ETFs, which saw outflows in 2025, have also seen demand return.
Commodities tell a different story. Precious metals ETFs, popular in 2025 and widely used as a defensive allocation, have seen flows reverse. This may reflect some investors taking profits after strong price rises, or others rebalancing portfolios as confidence in other areas improves.
Either way, it’s a clear reminder of how quickly ETF flows, and investor preferences, can change.
Why this matters for investors
ETF flows tend to follow what has already worked, rather than anticipate what comes next. By the time money moves in large amounts, last year’s winners are often already well-owned.
The shift in 2026 shows how quickly leadership can change. Regions rotate, styles shift and sector trends reverse.
This is why diversification is essential. Rather than trying to predict the next winner, a well-diversified portfolio spreads exposure across regions, sectors and styles. That way, it doesn’t rely on any single area to drive returns.
3 diverse ETF ideas that could form the core of an investment portfolio
Investing in ETFs isn’t right for everyone. Investors should only invest if the ETF’s objectives are aligned with their own, and there’s a specific need for the type of investment being made. You should understand the specific risks and charges before investing and make sure any new investment forms part of a diversified portfolio.
For more details on each ETF and its risks, use the links to their factsheets and key investor information.
As ETFs trade like shares, both buying and selling will be subject to our share dealing charges.
The equity ETFs below use securities lending to try to generate additional returns that help pay for the costs of running them. This adds risk.
Please note as these ETFs are domiciled outside of the UK, they’re not normally covered by the UK Financial Services Compensation Scheme.
Vanguard FTSE All-World ETF
The Vanguard FTSE All-World ETF is a low-cost option for tracking the performance of global stock markets. It invests in companies in developed and higher-risk emerging markets.
Like most global funds, this ETF has a large amount invested in US companies, so it could help diversify a portfolio focused on other regions or be a simple way to build the core of the share portion of an investment portfolio.
Vanguard FTSE Emerging Markets ETF
The Vanguard FTSE Emerging Markets ETF offers a low-cost way to track the performance of the FTSE Emerging Index. It includes a range of large and medium-sized companies across higher risk emerging markets, like China, Taiwan and India.
This ETF should only be considered for a portfolio with a longer investment outlook that can accept periods of higher volatility. It could provide more growth potential to a conservatively invested portfolio or provide some diversification to a portfolio mainly invested in developed markets.
Vanguard Global Aggregate Bond
The Vanguard Global Aggregate Bond ETF invests in a range of global bonds. It has a bias towards government bonds, while the remainder is mostly invested in bonds issued by companies. It also invests in emerging markets and uses derivatives, both of which add risk.
This ETF is a simple and low-cost way to invest broadly in the global bond market. It could provide a different type of return and help diversify an investment portfolio mainly invested in shares.
Annual percentage growth
Apr 21 – Apr 22 | Apr 22 – Apr 23 | Apr 23 – Apr 24 | Apr 24 – Apr 25 | Apr 25 – Apr 26 | |
|---|---|---|---|---|---|
Vanguard FTSE All-World ETF | 4.26% | 2.00% | 17.71% | 4.96% | 28.57% |
Vanguard FTSE Emerging Markets ETF | -6.63% | -6.29% | 10.05% | 4.39% | 28.52% |
Vanguard Global Aggregate Bond ETF GBP Hedged | -8.16% | -2.77% | 0.58% | 6.98% | 2.57% |