Nasdaq rebalancing prompts huge flows to Invesco ETFs

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Invesco’s US exchange traded fund flows rebounded sharply in July, more than doubling the manager’s first-half tally.

A net $10.1bn flowed into the company, lifting Invesco’s business to rank third in the US ETF industry behind iShares and Vanguard, according to data from Morningstar.

The performance was a marked increase on the six months to the end of June, when Invesco’s ETFs garnered $8.6bn, seventh-best industry-wide.

The $206.5bn QQQ Trust ETF drove Invesco’s sales, accounting for $5.3bn of the July haul.

Morningstar attributes the cash influx to investors’ embrace of Nasdaq’s special rebalancing of the Nasdaq 100 Index in order to diminish the weighting of the index’s biggest constituents.

Invesco’s $43.7bn S&P 500 Equal Weight ETF also sold well, drawing $3.4bn in inflows. Morningstar said the fund’s flows suggested equity investors were migrating to mid-caps in the belief that the first-half bloom for large-caps is fading.

iShares led July US ETF sales with $18.6bn, followed by Vanguard’s $14.9bn. Behind Invesco was State Street Global Advisors, with $3.4bn; Dimensional Fund Advisors, $2.1bn; and First Trust, $1.1bn.

Industry-wide, US ETFs took in $60.2bn, their second-best month of 2023, with stock ETFs garnering more than $45bn.

Year to date, Invesco is now ranked fourth in terms of inflows, behind Vanguard, with $80.3bn and iShares with $43bn. JPMorgan Asset Management was ranked third with inflows of $23.1bn.

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