May ETF Flows Reveal a Split Between Traders and Long-Term Investors on Semiconductors

May 2026 ETF Flows Highlights

• ETF flows topped $178.6 billion in May as investors continued to pour money into S&P 500 index funds and ultrashort bond ETFs.
• Technology ETFs set a monthly inflow record of $19.6 billion, led by Roundhill Memory DRAM’s $8.4 billion haul.
• Leveraged semiconductor ETFs bled billions in flows for the second straight month, even as they kept delivering extraordinary returns.
• Taxable bond ETFs had their best flows month on record, pulling in $53.4 billion, with ultrashort ETFs snapping back after April’s outflows.
• International equity ETF inflows of $8.9 billion was the group’s weakest month since April 2025 as the early-2026 rotation into non-US stocks continued to fade.

ETFs’ strong $178.7 billion haul eclipsed that of previous May inflows, nearly doubling 2025’s number.

Old trends persisted in May, with three of the top five inflow ETFs being S&P 500 trackers. Vanguard S&P 500 VOO pulled in $18.6 billion, ending the month just shy of $1 trillion in net assets—a mark it eclipsed on June 3. The two outliers were Roundhill Memory and ultrashort bond fund iShares 0-3 Month Treasury Bond SGOV, which together gathered $15.1 billion in new money.

This month’s defining dynamic was a two-sided semiconductor trade. Traders pulled money out of appreciated semiconductor positions while long-term investors piled into plain-vanilla semiconductor exposure.

All our selected analyst-rated ETFs below finished May with positive returns for the second month in a row.

Tech and Memory

The split between how traders and long-term investors approach semiconductors is striking. Trading tools like Direxion Daily Semiconductor Bull 3X SOXL returned 75.9% yet shed $4.1 billion in outflows in May. Flows usually follow performance, but that was not the case for this ETF, possibly showing traders taking profits for the second month in a row, anticipating an end to the semiconductor rally.

The other side of the trade is Direxion Daily Semiconductor Bear 3X SOXS, which bets against semiconductors. It enjoyed inflows of $1.3 billion. That’s the second straight month of inflows despite the fund declining 52% in May, and a whopping 90% year to date.

Technology sector funds pulled in $19.6 billion, their highest month ever. Unlike the trading tools category, ETFs in the technology sector category consist of unleveraged and usually longer-term investments. Newly minted Roundhill Memory led the category in flows by pulling in $8.4 billion. It holds semiconductor companies involved in data storage. Companies like Micron MU, SK Hynix HXSCL, and Samsung SSNLF dominate the portfolio and have performed exceptionally well in 2026, pushing their respective market caps above $1 trillion. Tech companies are embarking on a data center building spree, and those data centers rely on massive amounts of memory storage to feed AI processors.

South Korea is currently the world’s dominant supplier of memory chip technology, also called High Bandwidth Memory, and its stock market reflects that. IShares MSCI South Korea EWY represents its overall stock market, and nearly half its portfolio is held in SK Hynix and Samsung. EWY saw outflows in May, despite climbing 30% in May and 109% year to date.

International Equity

International equity ETFs had their slowest month of inflows since April 2025, gathering just $8.9 billion—down from $26.1 billion in April, and well off the $51.2 billion and $52.1 billion recorded in January and February. The early-2026 rotation into non-US stocks has cooled over the last three months. Foreign large-blend ETFs, which include Vanguard Total International Stock VXUS, held up with $8.6 billion in inflows, but the rest of the international equity cohort treaded water with $272 million of aggregate inflows.

Fixed Income

Taxable bond ETFs gathered $53.4 billion, nearly doubling April’s $26.6 billion, and it was the category’s best month on record. Flows across all types of bond ETFs were positive, with two exceptions: Emerging-market and long government bond ETFs both shed assets. These categories tend to be higher risk but offer higher yields. Longer-dated bonds are more sensitive to interest rates, and those ETFs aren’t the best place to park shorter-term investments. Emerging-market bonds are exposed to political, currency, liquidity, and economic risks, to name a few.

Investors piled back into ultrashort bonds to the tune of $13.6 billion, after April’s $1.6 billion outflow tally. With rates unlikely to fall anytime soon, ultrashort bonds offer an attractive yield with little risk. IShares 0-3 Month Treasury Bond tends to be the popular choice for investors in that category, with twice as many assets as the next largest ETF. Its portfolio of US treasuries makes it an easy cash alternative.