ETF performance has diverged from underlying stock movements in several cases over the past month, according to data from etf.com. This pattern highlights how funds react differently than individual stocks, even when they hold large positions in market leaders.
Multiple exchange-traded funds holding large positions in top-performing S&P 500 stocks have seen fund flows that contradict the success of their holdings, illustrating the complex relationship between a fund’s components and its overall market appeal.
This disconnect between stock giants and ETF flows reveals how a fund’s overall performance often moves independently from its star holdings.
The data show investors may pull money from ETFs despite their exposure to winning stocks, while other funds attract capital despite drops in value, demonstrating that ETF investment decisions involve factors beyond individual stock performance.
For example, the REX AI Equity Premium Income ETF (AIPI) experienced contradictory results with $67.1 million in inflow despite falling 7.6% over the past month, even as its major holding Palantir Technologies Inc. (PLTR) rose 20.6% during the same period.
“Flows and performance don’t always align,” said Sumit Roy, senior ETF analyst at etf.com. “Investors can take profits by cashing out of an ETF that’s rising or scoop up bargains by purchasing an ETF that’s falling.”
The iShares U.S. Consumer Staples ETF (IYK) bucked the trend, rising 8.3% with $16.9 million in inflows while holding 8.5% of Philip Morris International Inc. (PM), which climbed 18.9% over the past month after strong sales reports.
ETFs tied to underperforming stocks showed contrasting investor behavior, as the Amplify Weight Loss Drug & Treatment ETF (THNR) rose 2.5% despite its 4.5% allocation to West Pharmaceutical Services Inc. (WST), which plummeted over 37% over the past month after disappointing 2025 guidance.
The T-Rex 2X Long Tesla Daily Target ETF (TSLT) demonstrated the amplified impact of leveraged funds, dropping 46.9% as Tesla Inc. (TSLA) fell 24.6% over the past month amid slumping European sales, yet still saw $15.7 million in inflows, according to etf.com data.
“Flows are a measure of demand for an ETF, but that demand can fluctuate in ways that are at odds with the performance of the fund’s underlying holdings,” Roy said.
The Global X Genomics & Biotechnology ETF (GNOM) followed a more predictable pattern over the past month, declining 7.8% with $2.7 million in outflows as its holding Moderna Inc. (MRNA) fell 20.1% after announcing plans to burn more than $3 billion in cash in 2025.
