Our weekly check-in on thematic ETF flows as they relate to developing news stories shows renewed interest in Energy, some near-term rotation from Growth-to-Value styles and a market that is favoring results over concepts. However the macro backdrop remains constructive with employment strong, services and manufacturing PMI expanding and core inflation continuing at low levels. We examine thematic flows and returns against these cross-currents.
Growth exposures absorbed most of the pressure this week. The Invesco QQQ Trust (QQQ) declined 1.90%, and the Vanguard Growth ETF (VUG) fell 1.43%, while the Vanguard Value ETF (VTV) edged 0.07% higher. Monthly flows reinforce that rotation: VUG lost approximately $663 million, while VTV attracted $624 million.
Growth-versus-Value Rotation
| ETF | Exposure | 1-Day Return | 1-Month Return | 1-Day Flow | 1-Week Flow | 1-Month Flow | YTD Flow |
| QQQ | Nasdaq-100 | -1.90% | -1.22% | +$435.3M | -$8.41B | -$1.49B | +$1.71B |
| VUG | U.S. growth | -1.43% | +1.14% | -$103.6M | -$272.6M | -$662.7M | +$6.33B |
| VTV | U.S. value | +0.07% | +1.54% | -$147.2M | -$65.1M | +$624.4M | +$5.92B |
The market’s response reflects a difficult combination of renewed Middle East conflict, higher oil prices, an important inflation report and warnings that another firm core CPI reading could push the Federal Reserve toward tighter policy.
At the same time, elevated investor optimism and crowded semiconductor positioning have left the market less responsive to favorable AI headlines. Investors are not abandoning long-term growth themes, but they are becoming more selective about valuation, cash flow and exposure to rising real yields.
Returns are through July 14. Fund flows represent estimated net creations or redemptions. A reported flow of $0 indicates no estimated net flow for the period.
The Geopolitical Trade Is Energy Infrastructure—not a Blanket Safe-Haven Trade
Energy was the clearest beneficiary of the latest escalation between the United States and Iran. The First Trust Natural Gas ETF (FCG) gained 3.26%, while the Alerian MLP ETF (AMLP) advanced 1.88%.
The flow data, however, show a more measured response than the daily returns might suggest. FCG has lost approximately $92 million over one month, while AMLP has gathered only about $6 million during the same period. AMLP’s stronger $608 million year-to-date total points to a longer-term preference for midstream income rather than a sudden geopolitical allocation.
Oil-services exposure remains weaker. The VanEck Oil Services ETF (OIH) gained only 0.70% on the day and has fallen 10.57% over one month, accompanied by approximately $135 million of monthly redemptions.
Energy and Geopolitical Exposure
| ETF | Exposure | 1-Day Return | 1-Month Return | 1-Day Flow | 1-Week Flow | 1-Month Flow | YTD Flow |
| FCG | Natural-gas equities | +3.26% | -3.62% | $0 | -$1.3M | -$92.4M | +$75.7M |
| AMLP | MLP infrastructure | +1.88% | +2.99% | $0 | +$27.8M | +$5.8M | +$608.1M |
| OIH | Oil services | +0.70% | -10.57% | -$19.0M | -$94.9M | -$134.8M | +$155.3M |
| GLD | Physical gold | -2.62% | -5.02% | $0 | -$6.6M | -$1.36B | -$9.50B |
| JETS | Airlines | -2.71% | +5.72% | $0 | -$40.2M | -$123.9M | -$46.5M |
Traditional safe havens are not confirming a broad panic trade. The SPDR Gold Shares ETF (GLD) declined 2.62% and has experienced approximately $1.36 billion of monthly outflows. That suggests higher real yields, dollar strength and investor positioning are currently outweighing gold’s geopolitical appeal.
Airlines are absorbing the other side of the oil shock. The U.S. Global Jets ETF (JETS) fell 2.71% and lost approximately $124 million over one month as investors weighed higher fuel expenses and the risk of regional travel disruptions.
The message is unusually specific: investors are responding to geopolitical risk through energy cash flows, but they are not indiscriminately buying every traditional conflict hedge.
Semiconductor Selling Looks Like a Positioning Reset—not an AI Exit
Semiconductors experienced the sharpest selling pressure. The iShares Semiconductor ETF (SOXX) fell 4.77%, while the VanEck Semiconductor ETF (SMH) declined 4.16%.
Daily redemptions were substantial. SOXX lost approximately $697 million, and SMH shed another $458 million, producing more than $1.1 billion of combined one-day outflows.
The longer flow record tells a different story. SOXX and SMH have attracted approximately $6.21 billion combined over one month and more than $18 billion year to date. Investors are reducing short-term concentration, but they have not abandoned the AI infrastructure thesis.
AI and Semiconductor Exposure
| ETF | Exposure | 1-Day Return | 1-Month Return | 1-Day Flow | 1-Week Flow | 1-Month Flow | YTD Flow |
| SOXX | U.S. semiconductors | -4.77% | -7.11% | -$697.5M | +$3.41B | +$4.47B | +$10.78B |
| SMH | Global chip leaders | -4.16% | -5.54% | -$458.4M | +$259.4M | +$1.75B | +$7.33B |
| AIQ | Broad AI technology | -3.37% | -4.22% | +$0.1M | -$15.4M | -$379.4M | +$831.1M |
| JTEK | Active technology leaders | -3.00% | -3.24% | +$452.0M | +$499.5M | +$434.3M | +$1.09B |
The news flow explains the tension. Semiconductor demand remains supported by AI infrastructure spending, memory investment and expected earnings growth at leading manufacturers. But long semiconductor exposure has also become one of the market’s most crowded trades.
Export restrictions, rising memory costs and weakening consumer-electronics demand add further uncertainty. The AI buildout remains intact, but the market is becoming less willing to treat every chip-related company as an equal beneficiary.
The contrast between broad and active exposure is also notable. The Global X Artificial Intelligence & Technology ETF (AIQ) has lost approximately $379 million over one month. The actively managed JPMorgan U.S. Tech Leaders ETF (JTEK), meanwhile, attracted approximately $452 million in one day despite falling 3%.
Investors still want exposure to AI. Increasingly, however, they appear to prefer strategies capable of distinguishing durable earnings growth from generalized thematic enthusiasm.
Software and Cybersecurity Offer an Alternative Route Into AI
Software, cloud computing and cybersecurity funds showed relative strength as semiconductor shares sold off.
The Global X Cloud Computing ETF (CLOU) gained 1.49%, while the Global X Cybersecurity ETF (BUG) and Amplify Cybersecurity ETF (HACK) rose 0.69% and 0.28%, respectively.
The First Trust Nasdaq Cybersecurity ETF (CIBR) was nearly unchanged but attracted approximately $87 million in one-day inflows. CIBR has gathered roughly $338 million over one month and $506 million year to date.
Software, Cloud and Cybersecurity
| ETF | Exposure | 1-Day Return | 1-Month Return | 1-Day Flow | 1-Week Flow | 1-Month Flow | YTD Flow |
| CLOU | Cloud computing | +1.49% | +6.21% | -$18K | -$8.1M | -$24.9M | -$46.6M |
| BUG | Cybersecurity | +0.69% | +16.21% | +$9.7M | +$3.4M | -$46.2M | -$73.7M |
| HACK | Cybersecurity | +0.28% | +13.77% | +$10.9M | +$27.3M | +$26.0M | -$87.8M |
| CIBR | Cybersecurity | -0.04% | +7.72% | +$87.3M | +$174.6M | +$337.6M | +$506.0M |
This looks like an effort to maintain exposure to AI-driven enterprise spending while reducing dependence on the crowded semiconductor trade.
Cloud and cybersecurity companies can benefit as businesses deploy AI tools, migrate workloads and protect increasingly complex digital systems. Their recurring-revenue models can also offer better earnings visibility than more capital-intensive infrastructure themes.
The performance data nevertheless show that selectivity remains important. BUG and HACK have gained more than 13% over one month, but their year-to-date flows remain negative. Investors are recognizing improved fundamentals, but they have not yet embraced the entire category indiscriminately.
CIBR stands out as the clearest flow leader, suggesting investors are favoring larger and more established cybersecurity franchises.
Investors Prefer the Power Grid Over Broad Clean Energy
The electricity-related ETF data provide one of the clearest examples of investors separating a compelling demand story from uneven investment economics.
AI data centers require additional generation capacity, transmission equipment, cooling systems and grid connections. At the same time, data-center moratoriums and permitting disputes demonstrate that physical access to power is becoming a binding constraint.
Investors are responding by favoring grid and power-infrastructure funds over broad clean-energy baskets.
Power Infrastructure and Clean Energy
| ETF | Exposure | 1-Day Return | 1-Month Return | 1-Day Flow | 1-Week Flow | 1-Month Flow | YTD Flow |
| GRID | Smart-grid infrastructure | -1.86% | -3.65% | +$27.6M | +$27.6M | +$822.4M | +$5.31B |
| POWR | U.S. power infrastructure | -0.70% | -0.82% | +$6.7M | +$10.8M | +$56.1M | +$344.2M |
| ICLN | Global clean energy | -3.25% | -10.73% | $0 | -$52.1M | -$203.5M | +$425.4M |
| QCLN | Green-energy equities | -3.82% | -12.88% | $0 | -$40.9M | -$46.3M | +$60.8M |
| PBW | Alternative energy | -3.46% | -14.83% | $0 | +$4.2M | -$73.6M | -$297.7M |
| NLR | Nuclear and uranium | -4.35% | -10.23% | $0 | -$17.2M | -$68.0M | +$1.03B |
The First Trust Nasdaq Clean Edge Smart Grid Infrastructure Index Fund (GRID) has attracted approximately $822 million over one month and $5.31 billion year to date. The iShares U.S. Power Infrastructure ETF (POWR) has gathered another $344 million this year.
Broad clean-energy funds are moving in the opposite direction. The iShares Global Clean Energy ETF (ICLN) has fallen 10.73% over one month and lost approximately $203 million to redemptions. The Invesco WilderHill Clean Energy ETF (PBW) has declined nearly 15% and experienced approximately $298 million of year-to-date outflows.
The distinction is rational. Accelerating electricity demand does not guarantee attractive returns for every renewable manufacturer or developer. Grid equipment, transmission and power infrastructure provide more direct exposure to funded capital spending and identifiable physical bottlenecks.
Nuclear exposure is undergoing a shorter-term valuation reset. The VanEck Uranium and Nuclear ETF (NLR) has lost 10.23% over one month, but it has still gathered more than $1 billion year to date. Investors appear constructive on the long-term power-demand thesis while becoming more disciplined about valuation and project timing.
Broadening Is Moving Toward Equity Themes with Cash Flow and Earnings Visibility
The thematic market is not simply rotating from growth into defensive equities. Investors are favoring exposures that combine economic sensitivity with visible earnings, current income or durable policy support.
Bank funds are benefiting from expectations for stronger capital-markets activity and lending income. Dividend and real estate ETFs are attracting capital from investors seeking equity exposure with less dependence on technology-sector multiple expansion.
Cash Flow, Income and Policy Exposure
| ETF | Exposure | 1-Day Return | 1-Month Return | 1-Day Flow | 1-Week Flow | 1-Month Flow | YTD Flow |
| KBWB | Large U.S. banks | -0.09% | +4.15% | +$62.4M | +$231.5M | +$657.3M | +$336.4M |
| SCHD | Dividend equities | +0.49% | 0.00% | +$100.4M | +$497.0M | +$2.57B | +$13.88B |
| VNQ | U.S. real estate | +0.52% | +0.19% | +$0.7M | -$109.4M | +$610.6M | +$1.35B |
| SCHH | U.S. REITs | +0.63% | +0.16% | $0 | +$54.8M | +$1.06B | +$1.24B |
| ITA | Aerospace and defense | -1.68% | +0.61% | -$12.0M | +$87.7M | +$96.2M | -$25.5M |
| PPA | Aerospace and defense | -1.67% | -1.50% | $0 | +$7.1M | +$13.1M | +$608.0M |
The Invesco KBW Bank ETF (KBWB) has gained 4.15% over one month and attracted approximately $657 million during the same period. The challenge is that bank earnings enter reporting season with a high expectations bar. Forward guidance, credit quality and expense control may matter more than strong headline trading revenue.
The Schwab U.S. Dividend Equity ETF (SCHD) presents an even clearer signal. The fund attracted approximately $100 million in one day, $2.57 billion over one month and nearly $13.9 billion year to date. Investors are seeking cash-flow durability rather than leaving equities altogether.
Real estate funds are also receiving capital. The Vanguard Real Estate ETF (VNQ) and Schwab U.S. REIT ETF (SCHH) have gathered approximately $611 million and $1.06 billion, respectively, over one month.
Defense funds illustrate the difference between short-term price action and strategic demand. Aerospace and defense ETFs declined despite the latest escalation, but ITA and PPA retained positive weekly and monthly flows. Investors appear to view defense as a multiyear procurement and fiscal-policy theme rather than a one-day geopolitical hedge.
Thematic Outlook: From Stories to Funded Demand
The July 14 data do not show thematic investors abandoning risk. They show investors becoming more selective about which risks they are willing to own.
The AI investment cycle remains intact, but semiconductor exposure is being repriced for crowding, regulation and supply-chain risk. Energy is benefiting from the Middle East conflict, but the flow data favor income-producing infrastructure over more cyclical oil-services exposure. Electricity demand remains a powerful secular theme, but investors prefer grids, transmission and power infrastructure over broad clean-energy funds.
Across the thematic landscape, the most durable demand is concentrated in investments supported by three attributes:
Funded capital spending, current cash flow and identifiable physical constraints.
Themes dependent primarily on lower interest rates, distant profitability or indiscriminate enthusiasm are having greater difficulty retaining capital.
A hotter inflation reading and another increase in real yields would likely reinforce the preference for energy infrastructure, banks, dividends and profitable software while pressuring clean energy, speculative technology and other long-duration themes.
A softer inflation outcome could produce a sharp rebound in semiconductors and other oversold growth exposures. It would not, however, eliminate the underlying concentration problem.
The thematic market is broadening, but not evenly. Investors remain willing to pay for growth. They are increasingly demanding evidence that the growth is financed, monetizable and capable of surviving a less forgiving macro environment.
Performance and flow figures are based on the July 14 ETFThemes.com thematic returns and flows dataset. Only funds with complete data across every displayed table column are included.
Data sourced from FactSet Research Systems Inc.
Disclaimer: This material is provided for informational and educational purposes only and does not constitute investment advice, an offer to sell, or a solicitation to buy any security. ETF performance and flow data are historical, may be revised and do not guarantee future results. Market conditions, fund holdings, expenses and investment risks can change. Investors should review each fund’s prospectus and consult an appropriate financial professional before making investment decisions. Myrtle Tree Investment Research LLC may hold positions in securities discussed.
