Nasdaq rebalancing prompts huge flows to Invesco ETFs

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.

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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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