ETF Inflows & Outflows
Performance Leaders & Laggards
Source: ETF Action; flows and performance data as of 7/23/26; performance data excludes leveraged and inverse products
Weekly ETF Reads
Fund firms deploy ETF ‘spaghetti cannon’ in hunt for next hot trade by Steve Johnson
“The spaghetti cannon of launches is firing wildly right now and not even hitting the wall in some instances, let alone sticking.”
Why RIA firms are launching their own ETFs — and what it takes to win by Gregg Greenberg
“What unites all three is a shared recognition that the ETF wrapper offers structural advantages — tax efficiency, daily liquidity, transparency, and scalability — that other vehicles cannot match.”
How You Can Utilize the Durable Tax Efficiency of ETFs by Brian Paoli
“One of the most important costs of investing is not considered until after the bill arrives: taxes.”
Treasury Flags Concern Over ‘Potentially Abusive’ Tax Trades by Justina Lee, Denitsa Tsekova, and Zachary R Mider
“The strategies under scrutiny include so-called 351 conversions, box-spread exchange-traded funds, products that offset ordinary income, and funds that avoid dividend income by flipping between other ETFs.”
Brent Sullivan: Why 351 Exchange ETFs Are Now Everywhere by Lara Crigger
“You definitely want to make sure the ETF sponsor and counsel are going to act diligently behind the scenes and with prudence and thorough understanding of the tax code.”
The Age of Free ETF Trades Is Ending by Lewis Braham
“Boutique ETFs may raise their fees to cover the placement costs, much like mutual funds did when they had to pay similar shelf-space fees to Fidelity and Schwab in the past.”
Dual-Class ETFs, Mutual Funds Could Reshape 401(k) Landscape by Fred Barstein
“A mutual fund share class of an ETF could eliminate operational challenges that kept ETFs out of 401(k) plans over 20 years ago.”
$100 Billion ETFs: Meet the New Class of Mega-Funds by Todd Rosenbluth
“In mid July, a whole new class of mega-funds was about to hit this $100 billion ETFs milestone.”
ETFs Just Set a Trading Volume Record by Sumit Roy
“IEX points to leveraged ETFs as a major driver of the increase.”
Crypto ETFs: A More Selective Market Emerges by Roxanna Islam
“Altcoins have attracted greater attention following the wave of crypto ETF launches enabled by the SEC’s rule changes.”
ETF Post of the Week
351 exchanges were in the headlines this past week after the U.S. Treasury Department indicated it was evaluating them, along with other “potentially abusive” tax trades, including box spread strategies and ETFs that avoid dividends by swapping into other ETFs. Treasury Secretary Scott Bessent:
“Tax rules should reward investment, not abusive financial engineering. The Treasury Department welcomes innovation in our financial markets, but we will not turn a blind eye to abusive Wall Street tax dodges or tolerate products designed to exploit our federal tax code. If a tax pitch sounds too good to be true, then it probably is and investors should think twice. Treasury and the IRS are examining Wall Street tax products that may exploit the tax code and tax strategies that may cross the line.”
If you’re unfamiliar with 351 exchanges as they relate to ETFs, here’s how I’ve described them in the past:
“Let’s say an investor has a sizeable individual stock portfolio held in a taxable account. Let’s also assume those stocks have large capital gains overall. If the investor were to sell positions, they would be on the hook for paying taxes to Uncle Sam. A 351 exchange allows this investor to instead contribute those stocks into an ETF. Instead of owning a portfolio of individual stocks, the investor now simply owns ETF shares. Importantly, this investor doesn’t pay any taxes until they actually sell those ETF shares. There’s another benefit. It’s possible (likely) their individual stock portfolio had become overly concentrated because remember… if they sold positions, they paid taxes. However, the ETF shares they now hold can allow for greater diversification via the magic of creation and redemption. Their legacy individual stock holdings will be swallowed into a broader ETF and ultimately purged as necessary. Plus, the investor will receive the tax benefits of the ETF structure itself.“
While I don’t expect the Treasury Department to make significant changes here, this still bears watching. My guess is that there will be increased scrutiny of issuers pushing the boundaries. As Tax Alpha Insider’s Brent Sullivan told ETF.com’s Lara Crigger:
“You definitely want to make sure the ETF sponsor and counsel are going to act diligently behind the scenes and with prudence and thorough understanding of the tax code….A good fund shop that thinks deeply about tax risk management will have their processes in place and have documentation that substantiates every single transaction in the portfolio.”
I think that’s the real takeaway as the industry keeps charging ahead with these.
Our 351 exchanges help investors solve a big portfolio problem: “How do I exit my current portfolio and gain core market exposure without triggering a large tax bill?”
— Wes Gray 🇺🇸 (@alphaarchitect) July 23, 2026
Today, we are proud to announce that the Alpha Architect US Equity 4 ETF, ticker $AAUB, has launched with $837M… pic.twitter.com/2wJ3aBKkKD
ETF Chart of the Week
Speaking of 351 exchanges, this chart shows you why these are attracting more attention from investors, issuers, and lawmakers. From Bloomberg:
“A Bloomberg News analysis of filings to the US Securities and Exchange Commission has identified 105 ETFs created through 351 exchanges. Collectively they boasted $22.1 billion assets at launch and helped defer at least $6.5 billion in embedded capital gains, the filings show. More than half listed last year, as major asset managers including AllianceBernstein LP and American Century Investments began creating them for clients.”
Early last year, I predicted that 351 exchanges would go mainstream. I was a bit early, but this is what the beginning of mainstream adoption looks like…
Source: Bloomberg
ETF Prime Podcast
Last week’s ETF Prime featured Dave Nadig, President and Director of Research at ETF.com, and Paul Baiocchi, Head of Fund Sales and Strategy at SS&C ALPS Advisors. Dave explored the latest developments around ETF regulation and innovation, including the growing convergence of investing and gambling. Paul offered an ETF issuer’s perspective on innovation and broke down three key market themes investors should watch in the third quarter.
Crypto Prime Podcast
What role should crypto play in a diversified portfolio? Blue Macellari, Head of Digital Assets at T. Rowe Price, joined me on last week’s Crypto Prime to discuss the industry’s first actively managed multi-token spot ETF, the T. Rowe Price Active Crypto ETF (TKNZ), explain how crypto can fit into a diversified portfolio, and share her insights on the current crypto market landscape.
