ETF Inflows Set a Record in July. The Fee Mix Moved at the Same Time.
2026-09-06 09:15
•Reuben Gregg Brewer •The Motley Fool
• •• Axe Cap view
Actively Managed ETFs Gain Ground, Squeezing Costs
Record ETF inflows in July are increasingly favoring pricier active funds, benefiting firms like BlackRock.
ETF inflows hit an eye-watering $193 billion in July alone, with a noticeable tilt toward actively managed ETFs. This shift means investors are broadly accepting higher fees in hopes of better returns or differentiated strategies. For South African investors, the implications are mixed. While we don't have active ETF giants on the JSE comparable to BlackRock’s scale, the rand’s moves against the dollar make it relevant—stronger inflows into US-based higher-fee products could lean on USD/ZAR direction. That said, local financials such as StanBank and Capitec remain better bets for pure value, as they offer direct exposure to domestic growth without the cost drag of active global fund fees. This view might falter if active managers prove their worth and South African investor appetite for such funds jumps materially, lifting local equivalents or associated multinational counters. this is just our opinion and not financial advice
Avoid jumping into high-fee active ETFs without clear evidence they outperform net of costs. Prefer direct exposure to solid JSE financials like StanBank and Capitec while keeping an eye on USD/ZAR, which could nudge foreign-listed ETF returns.
- Standard Bank
- Capitec
- USD/ZAR
- Active managers fail to outperform, leading to underperformance after fees
- Sharp moves in USD/ZAR impacting foreign ETF returns for South African investors
6/10
ETFs attracted a record $193 billion in July, bringing year-to-date inflows to $1.23 trillion. However, the composition of these inflows is shifting significantly toward actively managed ETFs with higher expense ratios, benefiting Wall Street firms like BlackRock while potentially costing individual investors more. Active ETFs saw a 75% year-over-year increase in inflows to $466 billion through the first seven months of 2026, now representing 42% of all ETF inflows.
Our take is based on reporting first published by The Motley Fool.