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Matthias Knab, Opalesque:

Two numbers tell the story of July in the global ETF industry, and they point in opposite directions. Investors put an estimated $293.1bn of new money into exchange-traded funds over the month. Assets under management still fell, from $22,095.8bn at the end of June to $22,060.8bn on July 31.

The arithmetic behind that $35.0bn decline is where it gets interesting. Market performance stripped $328.2bn out of the industry; flows added $293.1bn back. Investors were buying into a month in which the assets they were buying lost money, according to the latest Global ETF Industry Review from LSEG Lipper.

The macro backdrop

July's headline index moves were small, but the composition changed sharply underneath them. Renewed hostilities between the United States and Iran raised questions over Middle East production and shipping, and Brent and WTI both climbed more than 20%, undoing most of June's fall. Energy and financial shares gained ground while investors backed away from expensively valued technology names, questioning whether the earnings coming out of artificial-intelligence capex justify the multiples. The S&P 500 finished the month down 0.1%; the MSCI World added 0.5% in dollar terms.

Central banks gave bond investors nothing. The Federal Reserve held the funds target at 3.50% to 3.75%, but three FOMC members voted for an immediate quarter-point increase - a split that pushed Treasury yields higher and reinforced th......................

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