Managed vehicles attracted $815.5 billion in net inflows in Q2 2026, easing slightly from $842.8 billion in Q1, according to data from ISS MarketPulse powered by Simfund Total Market. ETFs continued to dominate industry sales, gathering $641.6 billion and accounting for nearly 80% of total net deposits. Mutual funds followed with $172.1 billion, while CITs attracted $95.2 billion. Retail SMAs remained positive, but inflows slowed sharply to $11.5 billion, while institutional separate account redemptions increased to $104.9 billion.
Source: ISS MI MarketPulse powered by Simfund Total Market.
Note: Includes funds of funds; other asset class includes alternatives and commodities.
Excludes variable annuities and unclassified vehicles
ETF inflows accelerated to $641.6 billion in Q2 2026 from $554.6 billion in the prior quarter, led by $413.7 billion in equity deposits. Passive strategies accounted for most of the ETF deposits, gathering $411.6 billion, while active ETFs attracted a substantial $230.0 billion despite managing effectively one-ninth of passive ETF assets. U.S.-domiciled products dominated flows across both segments. Among passive ETFs, U.S.-based funds gathered $347.2 billion, significantly ahead of the $92.0 billion attracted by Ireland-domiciled products. The disparity was even greater among active ETFs, where U.S.-domiciled funds collected $188.8 billion compared with $14.3 billion for Ireland-domiciled funds.
Mutual funds generated $172.1 billion in net inflows in Q2 2026, making them the second-largest recipient of investor assets among major vehicles, though well below the $312.1 billion collected in the previous quarter. Bond funds were the principal source of growth, collecting net inflows of $290.7 billion, including $211.4 billion in active strategies. These deposits were partially offset by $201.0 billion in equity fund outflows. While active funds led equity outflows ($189.5 billion), passive equity funds experienced a starker reversal from the prior quarter, moving from Q1 net deposits of $79.0 billion to Q2 net withdrawals of $11.5 billion. Redemptions additionally weighted on allocation funds, which moved from Q1 inflows of $41.6 billion to Q2 outflows of $16.0 billion. Persistent market volatility left money market fund inflows elevated at $89.3 billion, though below the $112.6 billion gathered in Q1. Flows into active funds were positive when excluding money market funds at $20.9 billion, but passive funds outpaced long-term active by gathering $68.5 billion for the quarter.
Collective investment trusts attracted $95.2 billion in net inflows in Q2 2026, a substantial increase from $22.0 billion in the prior quarter. Allocation strategies remained the largest source of deposits, gathering $54.8 billion, driven primarily by target-date funds. Equity and bond funds added $22.6 billion and $20.6 billion, respectively. Active CITs accounted for the majority of inflows, attracting $81.1 billion, while passive strategies contributed an additional $14.2 billion.
Retail separately managed account inflows slowed to $11.5 billion in Q2 2026 from $51.6 billion in the prior quarter. Bond and allocation strategies attracted $14.1 billion and $6.5 billion, respectively, partially offset by $9.3 billion in equity outflows. Institutional separate account redemptions increased to $104.9 billion from $97.4 billion in Q1. Equity strategies remained the primary source of withdrawals, losing $136.9 billion over the period. Redemptions remained overwhelmingly concentrated in active mandates, which saw $102.3 billion in outflows, compared with net withdrawals of $2.6 billion for passive strategies.
Retail SMA inflows slowed sharply to $11.5 billion in Q2 2026 from $51.6 billion in Q1, as active strategies reversed from $32.2 billion in inflows to $5.2 billion in net outflows. Passive strategies remained positive, attracting $16.6 billion during the quarter. Fixed income accounted for the majority of the leading inflow categories in the quarter at six. Municipal Fixed Income led with $7.8 billion in inflows, down from $10.2 billion in Q1. AllianceBernstein, Nuveen, and Lord Abbett were the category’s leading managers, each attracting more than $1 billion. Intermediate Core Bond and Corporate Bond attracted $2.9 billion and $2.7 billion, respectively, while Short-Term Bond returned to positive territory with $349.5 million.
Flexible Allocation ranked second overall with $7.1 billion in inflows, although deposits fell sharply from $21.5 billion in Q1. BlackRock led all retail SMA managers with $11.9 billion, primarily supported by $7.4 billion in Flexible Allocation strategies. Within equities, Large Blend stood out with $1.1 billion in inflows, in line with the $1.3 billion gathered in Q1. Morgan Stanley led the category at $3.6 billion. Technology followed with attracted $399.8 million in inflows.
CIT inflows remained concentrated among target-date strategies in Q2 2026, which accounted for seven of the ten leading categories. Combined target-date CIT inflows reached $55.2 billion, slightly down from $58.3 billion in Q1. Capital Group led the segment with $16.5 billion in inflows, followed by Great Gray Trust ($13.2 billion) and Vanguard ($12.0 billion).
Global Equity Large was the top equity CIT category in Q2, attracting $11.7 billion after posting $40.7 billion in outflows in Q1, marking one of the quarter’s largest category reversals. BlackRock led the category with $2.8 billion in net commitments, a notable rebound from the $1.4 billion redeemed in the prior quarter, with most of the firm’s inflows coming from strategies tracking MSCI indexes. Geode Capital Management followed with $2.6 billion, entirely from passive strategies, supported primarily by its Spartan 500 Index Pool.
Outside of equities, Intermediate Core-Plus Bond inflows rose to $7.6 billion from $5.5 billion in Q1. BlackRock led the category with $1.8 billion, followed by Wellington ($1.3 billion) and Natixis ($1.1 billion), with all three managers’ inflows coming from active strategies. Corporate Bond net deposits more than doubled to $4.5 billion from $2.0 billion, with JPMorgan’s active strategies contributing $3.9 billion.
Fixed income dominated the leading institutional separate account categories in Q2, accounting for eight of the top ten, with most bond categories recording stronger inflows than in Q1. Intermediate Core-Plus Bond led with $13.4 billion, up sharply from $338.8 million. Franklin Templeton led in the category with inflows of $7.2 billion, reversing last quarter’s $756.7 million in outflows. Fidelity Investments followed with net contributions of $3.4 billion, up from $100.2 million in Q1. Global Fixed Income gathered the second most on a category level with $7.2 billion in inflows, while Long-Term Bond rebounded to $6.0 billion after recording $4.4 billion in outflows in Q1. Ultrashort Bond remained positive at $4.9 billion, though down from $10.4 billion. Inflation-Protected Bond returned to positive territory with $1.2 billion in inflows after recording $492.2 million in outflows in the prior quarter.
Beyond fixed income, Real Estate inflows increased to $1.5 billion in Q2 from $859.2 million in Q1. BlackRock and CenterSquare Investment Management led the category, gathering $1.4 billion and $1.3 billion, respectively. Meanwhile, Long/Short Equity, the only alternative category among the top ten, attracted $960.4 million, up from $120.7 million in Q1.
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Authors:
Alan Hess, Vice President, U.S. Fund Research, ISS Market Intelligence
Antara Maity, Senior Associate, U.S. Fund Research, ISS Market Intelligence
Aishwarya Mahalingam, Associate, U.S. Fund Research, ISS Market Intelligence
