ETF Trends from the RBC Capital Markets Trading Floor

June ETF Performance^*
June was another extremely strong month of performance across global equities. AI continues to be a dominant theme pulling markets higher and this is reflected in the best performing ETFs this month.

June was a double dose of ‘more of the same’. Easing geopolitical tensions, investors putting tariff/trade issues in the rearview mirror, and the mega-cap/AI growth story lead equity markets higher. Strong earnings results helped boost overall sentiment and economic confidence. The S&P 500 fully erased its nearly -20% decline that the index hit mid-April, and hit fresh all-time highs at the end of the month.

Broad-based strength lends itself to a very interesting list of top performing U.S. ETFs for the month of June. Thematic ETFs had a resurgence, with the Global X Hydrogen (HYDR) – designed to benefit from the advancement of low-carbon energy solutions – at the top of the list. Thematic queen ARKK also cracked the top 10, with outsized performance benefits from its holdings in crypto-industry equities: Circle, Coinbase and Robinhood. These same crypto-related equities drove performance in other top ETFs for the month of June, like the CoinShares Valkyrie Bitcoin Miners (WGMI), SPDR Digital Asset Ecosystem (DECO) and VanEck Digital Transformation (DAPP).

The upward-trending market also led to a diverse list of worst performing ETFs. VIX Short-Term futures did poorly as the level of volatility in the market contracted over the course of the month. Ethereum saw some profit-taking and mean reversion, moving the cryptocurrency from a top performing asset to one of the worst performing. Single-stock ETF exposure to Tesla also had a weak month of performance as the stock bucked the market trend.

June ETF Flows
The blistering pace of ETF inflows continued last month. In non-stop action, U.S. ETF inflows exceed the $100 billion level for the second time this year and Canadian ETF inflows ran well above-average.

June was a big month for ETF inflows, capping off a record-setting first half of the year in both Canada and the U.S.

U.S. ETFs had their second highest month of inflows, next to the punchy pre-tariff activity seen in February. Flows were robust across the board. Interestingly, domestic U.S. equity fund flows were lower in June than in past months, but the difference was made up by increased inflows to international equities and commodity ETFs.

The Bitcoin v. gold marathon also continued. June saw physical Gold ETFs adding $6 billion amongst geopolitical tensions, to Bitcoin’s ~$4 billion. Physical gold also has the edge on YTD inflows as well.

Other interesting areas of flow: Momentum factor ETFs had a back-to-back month of solid inflows (growing assets under management (AUM) into the momentum factor by 10% across May/June). On the other hand, Low Volatility ETFs, perhaps unsurprisingly, had outflows. Consumer Discretionary was the top sector with fund flows, beating both Tech and Nasdaq-100 flows by a hefty margin. We mentioned a renaissance of thematic ETFs above and fund flows followed; the category added $1.8 billion.

Outflows were led by Long Duration treasuries, which had $2 billion of outflows and Semiconductors which had an unwind of $1.7 billion.

Canadian investors switched their investment preferences solidly towards equities this month. Equity ETFs accounted for well over half of all inflows, which shows a shift away from Fixed Income ETFs that garnered assets earlier this year. International equities continue to be the leader from a fund flow perspective, with international geographies accounting for 25% of all Canadian ETF inflows in June. Interest in U.S. equities also picked up, growing to 21% of all inflows and a bias towards owning S&P 500 exposure here. This was not surprising given the market cap bias currently leading the way in the market rally.


*_{^{Past performance is not indicative of future results.}}