Weekly Market Summary

Extra Credit^*

• Investors poured $75 billion into long-term U.S. mutual funds and exchange-traded funds in July 2025, the most since February 2025. Active ETFs also recorded $42.6 billion in inflows, their second-best month ever, following a key inflection point in May when the number of active ETFs surpassed passive ones for the first time.
• Taxable-bond funds maintained their momentum, collecting roughly $58 billion during July. Conservative and less-volatile fixed income Morningstar Categories, such as intermediate core bond and ultrashort bond, were responsible for more than half of these inflows.
• According to MorningStar, the cheapest quintile of funds also earned significantly higher dollar-weighted (7.6% per year over the decade ended Dec. 31, 2024) and aggregate total (8.7% annual) returns than the priciest quintile did (3.8% and 5.6% per year, respectively). More-volatile funds earned far lower dollar-weighted (3.4% per year over the decade ended Dec. 31, 2024) and aggregate total (5.4% annually) returns than less-volatile funds (9.6% and 10.0% per year, respectively). In a sense, investors in the more volatile funds within a particular category group could incur two levels of costs—lower returns in an absolute sense and a larger shortfall in the return of their average dollar compared with the funds’ aggregate total return.

As of 8/18/25.