ETF Zoo: Mid-Year Check-In the AI Trade That Won’t Quit

ETF Zoo Podcast

Thu, July 2, 2026 at 6:16 PM PDT 2 min read

Dave Nadig, President & Director of Research at ETF.com and Sumit Roy, Senior ETF Analyst at ETF.com, are joined this week by Cinthia Murphy, Director of Research at TMX VettaFi; Jeffrey Ptak, Managing Director at Morningstar; and Todd Sohn, Senior ETF & Technical Strategist at Baird Strategas. Together the group digs into mid-year flows, the impending Nasdaq-100 buy-in of SpaceX, and more. 

Halfway through 2026, and the ETF industry is having an absolutely wild year, with over a trillion dollars flowing into ETFs already, putting the industry on pace to potentially crack two trillion by year's end. But the real story isn't just the mega-funds like VOO and SPY hoovering up cash; it's how deep the enthusiasm runs, according to Sumit Roy. Dozens of ETFs are pulling in billions each, spanning everything from leveraged single-stock bets to total market funds. Meanwhile, Morningstar's Jeff Ptak brought some Washington color to the conversation, fresh off testifying before the House Capital Markets Subcommittee. His message to lawmakers: low-cost, transparent products are winning, and that's great for investors but as the industry pushes into murkier territory like private assets, the same disclosure standards need to follow. 

Performance-wise, it's an AI world and everyone's just trading in it. The S&P 500 is up a very respectable 10% at the midpoint, but that barely registers next to leveraged Micron ETFs up near 1,000%, or the parade of semiconductor and AI-adjacent funds dominating the leaderboard. And then there's SpaceX, the topic the panel apparently can't escape. With the company's IPO shares about to unlock for trading in the Nasdaq 100 complex, Ptak walked through his tracker of the four vehicles that have offered SpaceX exposure and how they held up post-IPO. Cinthia Murphy summed it up as less a performance story and more about getting as close to direct exposure as possible but the second real single-stock access became available, people bailed on the proxy.

Murphy also flagged a fascinating quirk in factor investing: Micron, despite rocketing roughly 800% in a year, is technically cheap enough on forward earnings to qualify as a value stock. That means it's become a massive holding in value-labeled ETFs like iShares' MSCI Value fund, essentially because the index methodology forces flat sector weighting. The group also tackled the leveraged and inverse ETF boom, now a hefty 17% of all ETF trading volume, or roughly $500 billion in notional exposure once multipliers are counted. The discussion covered everything from counterparty risks to the new issuer in town that's shaking up the leveraged space with low-cost fees. 

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