Cinthia Murphy, investment strategist at VettaFi, joined Nate Geraci on this week’s ETF Prime to discuss record ETF flows in the first quarter despite challenging market conditions. The industry exceeded $460 billion in total flows, a 50% year-over-year increase from Q1 2025, according to Murphy.
- ETF industry posted record $460 billion in Q1 2026 flows, a 50% increase over the prior year despite market volatility.
- SPDR Portfolio S&P 500 ETF topped the leaderboard with $26 billion, beating Vanguard’s VOO on fee sensitivity.
- Fixed income captured 45% of March flows as investors shifted to defensive positions amid Iran conflict.
January and February saw strong momentum with $170 billion and $190 billion in inflows respectively, before decelerating to over $100 billion in March, Murphy said. The S&P 500 fell over 4% in the first quarter while the Nasdaq 100 dropped 6%, yet investors continued allocating to ETFs rather than retreating from them.
In a surprising development, the State Street SPDR Portfolio S&P 500 ETF (SPYM) captured the top spot on the quarterly leaderboard with $26 billion in inflows, edging out the Vanguard S&P 500 ETF (VOO) at $22 billion. Murphy attributed SPM’s momentum to its 2 basis point fee, noting that fee sensitivity matters especially in defensive markets. The fund has now crossed $120 billion in assets, joining an elite club of only 19 ETFs above $100 billion.
Defensive Shift Accelerates
The ProShares Genius Money Market ETF (IQMM) ranked third with nearly $22 billion in inflows. The fund is built around regulatory requirements for stablecoin reserves under the Genius Act, Murphy said. Fixed income dominated March flows, accounting for 45% of total inflows as investors flocked to cash-like vehicles including the iShares 0-3 Month Treasury Bond ETF (SGOV) and the State Street SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) amid Iran war volatility, she added.
See more: Money Market ETF Hits $22 Billion in Record Launch
Murphy noted the return of diversification as international equity ETFs like the iShares Core MSCI Emerging Markets ETF (IEMG) and the Vanguard Total International Stock ETF (VXUS) posted strong gains. However, March saw international stocks decline 8% while domestic equities held up better, she said.
Troy Cates, co-founder and managing partner of NEOS Investments, discussed the firm’s explosive growth to over $22 billion across 19 ETFs in less than four years. The NEOS S&P 500 High Income ETF (SPYI) and the NEOS Nasdaq 100 High Income ETF (QQQI) each hold over $8 billion in assets. NEOS writes out-of-the-money calls on approximately 50% of notional value to generate income while preserving upside participation, Cates said.
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