Global ETF markets continued their record-breaking expansion during the first half of 2026. By the end of May, global ETF and ETP assets had reached an all-time high of $23.08 trillion, with investors committing $1.07 trillion in net inflows year to date, according to ETFGI. Investors continued allocating capital despite geopolitical tensions, shifting interest-rate expectations, and persistent market volatility, favouring diversified equity, fixed income, and defensive commodity strategies.
Against this backdrop, GCC-listed ETFs told a different story. According to Nukoud's GCC ETF Market Monitor: H1 2026 Review, the regional market recorded approximately $16.1 million in net outflows during the first half of the year. Rather than signalling broad weakness in regional investing, however, the divergence reflected the GCC ETF market's concentrated structure, where subscriptions and redemptions in only a handful of funds can materially influence overall flow statistics. Understanding why global ETF demand remained resilient while regional flows softened provides important insight into how investors positioned portfolios during H1 2026.
Global ETF Flows: Equities Led Capital, Income Strategies Led Growth
Equity ETFs attracted the largest share of new capital in H1 2026, while fixed income, money market, and municipal ETFs recorded faster organic growth, highlighting investors' growing preference for income-oriented and defensive strategies. Despite this shift, equities still accounted for nearly 64% of total net inflows, demonstrating that risk appetite remained intact. Within fixed income, investors increasingly favoured higher-quality exposures as they balanced growth opportunities with portfolio stability. Aggregate Bond ETFs attracted $277.1 billion, while Government Bond ETFs gathered another $178.8 billion, comfortably outperforming corporate and high-yield strategies. Despite growing demand for income-oriented investments, global investors maintained meaningful exposure to equities throughout the period.
The data shows that although income-oriented strategies gained momentum, equities continued to dominate global ETF allocations throughout the first half of the year.
AI, Diversification, and Gold Led Investor Demand
Within equities, thematic ETFs (71.3% organic growth) and materials (58.5%) posted the strongest organic growth, highlighting investors' appetite for high-conviction and cyclical opportunities. Meanwhile, diversified equity strategies attracted the largest share of new capital at approximately $1.39 trillion, well ahead of the narrower Broad Market category, which gathered about $520 billion. Technology ETFs attracted the largest sector inflows at $124.9 billion, while thematic ETFs gathered a further $72.8 billion, reflecting sustained investor enthusiasm for AI and innovation-related investments. At the other end of the spectrum, Consumer Discretionary and Consumer Staples ETFs recorded marginal net outflows. Demand for commodity ETFs also remained strong, with precious metals funds attracting $82.2 billion as investors continued to use gold as a portfolio hedge despite prices retreating from their record highs later in the period.
Beyond traditional equity allocations, investors also used tactical ETF strategies to navigate heightened market volatility. Leveraged and inverse equity ETFs together attracted approximately US$23.3 billion in net inflows (Leveraged Equity: US$11.6 billion; Inverse Equity: US$11.7 billion) against a combined asset base of roughly US$232 billion. Leveraged and inverse commodity ETFs added another US$4.3 billion, reflecting continued demand for tactical exposure amid commodity price swings. In contrast, Leveraged Fixed Income ETFs recorded approximately US$3.0 billion in net outflows as investors reduced leveraged duration exposure while favouring conventional fixed income strategies.
Overall, global ETF flows reflected broad confidence in diversified portfolios supported by selective defensive positioning. Investors continued balancing long-term growth opportunities through technology and thematic strategies while increasing allocations to gold and higher-quality fixed income as portfolio hedges. Much of this momentum was driven by the United States, while actively managed ETFs continued capturing a growing share of investor capital.
U.S. and Active ETFs Powered Record Global Flows
The United States remained the primary driver of global ETF growth during H1 2026. By the end of May, U.S.-listed ETFs had attracted a record US$837.4 billion in net inflows, accounting for nearly four-fifths of global ETF subscriptions and lifting industry assets to an all-time high of US$15.7 trillion. The scale of these inflows reinforced the U.S. market's dominant role in driving global ETF demand despite heightened geopolitical uncertainty and shifting interest-rate expectations.
At the same time, actively managed ETFs continued expanding rapidly and gaining market share. Global active ETF assets climbed to US$2.49 trillion by the end of May, with investors allocating a record US$411.8 billion in net new money during the first five months of the year. Active ETFs also extended their streak of positive flows to 74 consecutive months, reflecting growing investor demand for professional portfolio management while retaining the liquidity, transparency, and tax efficiency associated with the ETF structure.
Together, record U.S. inflows and the continued expansion of active ETFs underscored the breadth of global investor demand during H1 2026. Against this backdrop, GCC-listed ETFs followed a markedly different trajectory, with regional flow activity remaining concentrated in a relatively small number of products rather than reflecting the broad-based participation seen across major international ETF markets.
GCC ETF Flows: A Concentrated Market Produced Divergent Results
While global ETF markets continued attracting record levels of capital, GCC-listed ETFs experienced a more selective investment environment. According to Nukoud's GCC ETF Market Monitor, regional ETFs recorded approximately $16.1 million in net outflows during H1 2026, with June alone contributing roughly $41.7 million in net redemptions. Unlike global markets, where capital flowed across a broad range of sectors and asset classes, GCC ETF activity remained concentrated within a relatively small number of products.
Rather than reflecting broad-based investor withdrawals from GCC markets, the headline outflow was largely driven by positioning within a limited number of ETFs. This highlights an important distinction between regional flow data and broader investor sentiment, particularly in a market where a small number of funds dominate assets under management.
Regional Flows Were Driven by Gold and China ETFs
Regional fund flows remained highly concentrated throughout H1 2026, with investor activity centred on only a handful of ETFs. The Albilad Gold ETF attracted roughly $30 million in net inflows, making it the strongest asset gatherer in the region as investors continued allocating to precious metals despite gold easing from record highs. By contrast, the Albilad CSOP MSCI Hong Kong China ETF experienced approximately $38.4 million in net outflows, accounting for the majority of regional redemptions during the period.
The contrast between these two products reflected broader investor positioning during H1 2026. While global investors continued favouring diversified equity exposure alongside defensive assets such as gold, regional investors similarly maintained demand for precious metals even as selected international equity exposures experienced sustained redemptions.
H2 Outlook: What Could Drive GCC ETF Flows?
The second half of 2026 will depend largely on whether regional investor allocations broaden beyond a small number of concentrated products. Stabilisation in China and Hong Kong markets could reduce the largest source of outflows, while continued demand for gold and sukuk strategies may support positive inflows. Continued global demand for diversified equity, fixed income, and defensive allocations could gradually support broader investor participation across GCC-listed ETFs. Additional ETF launches, improving market liquidity, and greater diversification of regional assets would also help reduce the concentration that currently drives much of the region's headline flow performance. Should these trends continue, GCC-listed ETF flows could gradually become more closely aligned with the positive momentum seen across global ETF markets.
Bottom Line
Global ETF markets delivered another record first half, with investors directing capital toward diversified equity, fixed income, and precious metals strategies. GCC-listed ETFs, by contrast, recorded modest net outflows of approximately $16.1 million, driven largely by concentrated redemptions from China/Hong Kong-focused products rather than broad-based selling. Strong inflows into the Albilad Gold ETF highlighted continued demand for defensive assets. At the same time, the region's highly concentrated ETF market meant that a small number of funds largely determined overall flow trends. Should investor participation broaden beyond the region's largest ETFs during H2, GCC-listed ETF flows could recover despite the subdued first-half headline figures.
