Investors Look Abroad: International Equity ETFs Lead $165 Billion January Inflow
January 2026 saw robust investor appetite for exchange-traded funds, with U.S.-listed ETFs pulling in a substantial $165.4 billion, according to the latest data from FactSet. While this marks a slowdown from December's record-shattering $225 billion, it significantly outpaces the $107 billion gathered in the same month last year, signaling sustained confidence in the ETF wrapper.
The standout story, however, is a decisive geographic shift in allocations. For the first time in recent memory, international equity ETFs led monthly inflows, drawing $68.2 billion and decisively outpacing the $42.7 billion that flowed into U.S. stock-focused funds. This rotation follows a period of sustained outperformance by international markets, which began in 2025 and has carried into the early weeks of 2026.
"The data confirms a broadening of investor horizons," said Michael Thorne, a senior portfolio strategist at Crestwood Advisors. "After years of U.S. market dominance, relative valuations and growth prospects elsewhere are becoming too compelling to ignore. This isn't a fleeting trend; it's a strategic rebalancing."
The iShares Core MSCI Emerging Markets ETF (IEMG) emerged as a primary beneficiary, attracting $8.8 billion in January alone. Year-to-date, the fund is up 8.3%, starkly contrasting with the 2.2% gain of the benchmark Vanguard S&P 500 ETF (VOO). Nevertheless, VOO retained its title as the most popular single fund overall, gathering $16.3 billion.
Fixed income ETFs maintained steady demand, with U.S. products taking in $36.6 billion and international bond funds attracting $15.6 billion. Performance in the sector, however, has been tepid amid a steady-rate environment from the Federal Reserve. Popular funds like Vanguard Total Bond Market ETF (BND) and the Vanguard Intermediate-Term Corporate Bond ETF (VCIT) have inched up only about 0.2% this year.
Commodity ETFs gathered $4.3 billion, largely fueled by safe-haven demand for gold, with the SPDR Gold Trust (GLD) pulling in $2.6 billion year-to-date. Silver told a cautionary tale: despite strong price gains early in the month, the iShares Silver Trust (SLV) suffered a staggering $2.9 billion in outflows, culminating in silver's largest single-day decline in modern history.
Other notable moves included outflows from long-duration Treasuries, with the iShares 20+ Year Treasury Bond ETF (TLT) losing $2.2 billion, and strong inflows of $4.4 billion into the Invesco S&P 500 Equal Weight ETF (RSP). The latter's 3.8% YTD gain—nearly double that of the cap-weighted S&P 500—highlights the current strength of smaller stocks within the index.
"This flight to international funds is sheer performance-chasing and ignores underlying geopolitical risks," argued Lisa Chen, a managing partner at Veritas Capital Management, offering a more critical take. "Investors are piling into yesterday's winners. The moment volatility spikes in these markets, we'll see a violent reversal. This is classic late-cycle behavior."
In contrast, retail investor David Reynolds from Tampa shared his perspective: "I've been overweight the U.S. for a decade. Finally diversifying into funds like IEMG feels like catching up. The numbers speak for themselves—the growth is elsewhere right now."
Disclaimer: All data as of 6 a.m. Eastern time on the date of publication. Market data is subject to subsequent revision and correction by the exchanges.