US energy sector ETFs see $4B in outflows as investor sentiment flips after record year

US energy sector ETFs have hemorrhaged $4 billion over a 65-day stretch ending in mid-August, the largest sustained outflow the sector has experienced since mid-2025. It’s a jarring reversal for a category that was breaking records just months ago. In March 2026, energy ETFs pulled in a record $5 billion in a single month, fueled by geopolitical tensions and supply disruption fears. Five months later, that enthusiasm has evaporated. From record inflows to the exits Through May 2026, energy ETFs had accumulated roughly $12 billion in year-to-date inflows, a pace that had already surpassed prior full-year records. The early-year surge was driven by a familiar cocktail: regional conflicts stoking supply anxiety, rising crude prices, and investors looking for inflation hedges in a world that still hadn’t shaken off price pressures. Interest rate fluctuations, a strengthening US dollar, and easing geopolitical tensions combined to pull the rug out from under energy sector positioning. By May, investor sentiment had already begun rotating away from energy, along with financials, health care, and utilities. The broader commodity space felt it too: commodity ETPs saw $6.8 billion in outflo...