They say a win for one is a win for all, but that might not hold true for ETFs.

The US exchange-traded fund market has made headlines this year for its massive growth, recently surpassing $12.7 trillion. But the boom hasn’t reached all corners of the ETF industry: Plenty of funds lost assets this year. The SPDR S&P 500 ETF Trust (SPY) and iShares Russell 2000 ETF (IWM) have lost $31 billion and $9 billion in AUM year to date, respectively, according to VettaFi data. Experts attributed this to a combination of tariff concerns and cheaper alternatives.

“It’s just folks making tactical trades into other parts of the markets,” said Clark Allen, head of ETFs at the investment manager Horizon Investments. “Dollar weakness and concerns around the political climate and tariffs have happened this year, and that’s come to the detriment of SPY, but also to the benefit of international or growth-specific exposures.”

I SPY, With My Little Eye…

S&P 500 funds like SPY and IWM have been bleeding assets for several years as institutional investors allocate to cheaper alternatives with identical, or nearly identical, exposure. Increasingly popular SPY alternatives are State Street’s SPDR Portfolio S&P 500 ETF (SPLG) and Vanguard’s S&P 500 ETF (VOO), which have expense ratios of .02% and .03%, respectively, far cheaper than SPY’s and IWM’s .09% and .19% fees. “The S&P 500 is the S&P 500, whether you buy it for nine basis points or for two or three,” said Todd Rosenbluth, head of ETF trends research at VettaFi. “So why not pay two or three?”

Other ETFs that have seen more than $6 billion in net outflows this year include:

• The iShares MSCI EAFE Growth ETF (EFG), which had $7.9 billion in outflows.
• The Pacer US Cash Cows 100 ETF (COWZ), which had $6.5 billion in outflows.

Still, the tables could turn for SPY. “We tend to see, in the fourth quarter, institutional investors hide out in SPY,” Rosenbluth said. “If [institutional investors are] outperforming the broader market in December, they might ride that out by replicating the broader market and putting money into SPY.” Despite the outflow woes, he added, SPY probably isn’t going anywhere because of its status as a premium product that offers above-average liquidity.

Low-Energy. State Street’s Energy Select Sector SPDR ETF (XLE) also had massive outflows totaling $8.2 billion year to date, which Horizon’s Allen said is evidence of decreasing energy prices. The war in Ukraine gave energy-heavy funds a boost back in 2022, but the sector has since underperformed relative to tech. “You’ve seen energy struggle,” Allen said. “I think it’s folks just saying, ‘Hey, I can’t hang on any longer, and I need to pivot into areas that I think are going to drive growth into the future.’”

Everyone knows Big Tech is booming, but what about the minerals it depends on?

The rare earths industry is taking off, and investors are noticing. The stocks of companies like Arafura Rare Earths, Lynas Rare Earths and MP Materials, which mine and refine the metals that help power everything from smartphones to wind turbines, have all more than doubled this year (with some climbing well beyond that), and ETFs investing in the companies have garnered massive inflows. (VanEck’s Rare Earth and Strategic Metals ETF, REMX, brought in more than $200 million week over week as of Monday.) The boom reflects both political and technological developments — rare earths are now being used in AI infrastructure — and should be taken seriously by investors, experts said.

“I think we see the tailwinds continuing for the foreseeable future, in addition to this newfound pocket of demand from data centers and AI,” said Nate Miller, vice president of product development at Amplify.

Miss Independent

Part of the recent surge stems from an agreement signed by President Trump and the Australian Prime Minister on Monday to invest $3 billion into the sector over the next six months. The US government has also pledged to ban Chinese sourcing for certain metals by Jan. 1, 2027, which is all the more reason for US investors to shift their dollars away from Chinese supply chains, said Daniel O’Connor, CEO of the media and intelligence platform Rare Earths Exchanges. (The company is working on launching an ETF that would invest in the rare earth supply chain outside of China, which also tightened restrictions on exports earlier this month.) “Right now, a little under 100% of heavy rare earth elements are processed in China,” O’Connor said. “What this means is if the US military needs to develop something and they don’t have access, they’re out of luck … So there’s enormous pressure [to diversify].”

ETFs investing in rare earths companies have outperformed of late:

• VanEck’s Rare Earth and Strategic Metals ETF (REMX), which provides broad sector exposure, investing in mining companies and tech providers, is up 85% YTD.
• Amplify’s Lithium & Battery Technology ETF (BATT), which invests in the metals that go into batteries, is up 48% YTD.
• The iShares MSCI Global Metals & Mining Producers ETF (PICK), which tracks an index of mining and production companies, is up 34% YTD.

Silver and Gold … And Lithium: Miller says rare earths can play an important supporting role in investors’ portfolios. “In the same way somebody might think about an allocation to gold or silver in a complementary sense, you could think about [rare earths] here as adding further diversification,” Miller said. “When other things are treading water or aren’t performing well, you can see really strong returns out of these companies and the materials behind them.”

It’s not that unusual to change one’s appearance: Just ask all the bros who can’t wait to stop shaving in Movember.

But if a fund got a different name, ticker, benchmark and investment process, is it still the same fund, or just a way of seeding a new product? One DWS Xtrackers ETF is having something of an identity crisis, going from a value ESG mandate to being an S&P 100 fund that simply cuts out the biggest names in the index. And that’s after a name change the fund already had earlier this year. On Dec. 19, the Xtrackers S&P 500 Value Scored & Screened ETF (SNPV), which until February had been the S&P 500 Value ESG ETF, will become the S&P 100 Ex Top 20 ETF (XOEX). Whew.

This One Is Not Like the Other

It’s common for asset managers to change funds’ names and investment strategies. That has all but been the norm amid a pullback in the US from sustainable and ESG mandates, with many products removing any hint of those labels. The trend was in the opposite direction a few years ago, when seemingly every fund shop wanted in on ESG, and many existing products saw slight modifications to reflect that. This year, however, the Janus Henderson Responsible International Dividend Fund dropped “Responsible” from its name, and the BlackRock Sustainable Balanced Fund scrapped “Sustainable.” Both of those funds backed off from ESG-related goals, according to a Morningstar analysis. Other products, such as the Sprott Critical Materials ETF and Cromwell Foresight Global Infrastructure Fund, had name changes but retained their investment strategies.

Assets have been pouring out of US sustainable and ESG-themed products in recent years, and small funds have been closing :

• 39 such products shut down in the first half of 2025, while 55 closed in all of 2024, Morningstar data show.
• Last week, Fidelity announced five ETFs will close and liquidate next month, four of which are sustainable or ESG-specific funds: the Sustainable Core Plus Bond, Sustainable Low Duration Bond, Sustainable US Equity and Women’s Leadership ETFs.

The move by DWS to morph its ETF into essentially a different product stands out from the more measured changes many issuers have made in repurposing funds. Nonetheless, SNPV’s metamorphosis won’t affect too many investors, as it represents just $2.5 million in assets. DWS, through a PR firm, declined to comment. However, the fund’s new strategy aligns it somewhat with others this year that have addressed the extreme concentration in market-cap-weighted indexes of just a few companies, like Nvidia, Apple, Microsoft, Alphabet and Amazon.

What Are Sustainable Investors to Do? Clearly, there are fewer ESG-related funds on the market today than just a few years ago. But investors still have choices, as asset managers dedicated to the space aren’t leaving. “There are big players out there like Parnassus, Calvert, etc., who are starting to offer ETFs. This is a huge shift and helps open the space to investors who want a more tax-friendly approach and lower investment minimums,” said Justin Horowitz, owner of Just Advising, which offers an ethical investing option. “Other mainstream names, like BlackRock, still offer their ESG funds, but it does seem harder to find them through their website nowadays.”