Space, semiconductor ETFs worst performers in July

Space-related and semiconductor exchange traded funds (ETFs) were among the worst performers in the month of July after delivering exceptional gains earlier in the year.

Global X Space Tech ETF and Betashares Space Industry ETF both declined 29.6% and 28.8% respectively.

"Space-related ETFs led the declines falling almost 30% as post-IPO euphoria surrounding SpaceX continued to unwind, weighing heavily on the broader space ecosystem and prompting investors to reassess valuations across the sector," Global X said.

SpaceX had raised $106.8bn in the biggest-ever stock market debut in June. Multiple passive investment managers including Global X and Betashares recently debuted space ETF's on their platforms to capture rising interest in the sector.

Additionally, Global X Semiconductor ETF fell 20.7% in the month after being the best-performing ETF in FY26.

"The decline was driven by profit-taking in artificial intelligence (AI) beneficiaries, the unwinding of leveraged positions in Korea following a powerful AI-fuelled rally, and renewed concerns around increasing Chinese competition," Global X said.

While the Australian ETF industry fell by $1.8 billion over the month to $370.8 billion, it continued to receive record flows, with investors pouring in $6.8 billion into ETFs in July.

Income ETFs remained a key theme for investors, attracting $1.8 billion in net inflows during the month and accounting for almost one-third of all ETF flows. The category has been gaining pace since May, with Global X noting a clear pivot in investor behaviour following the Federal Budget.

"Importantly, the demand was no longer concentrated in traditional equity income products. May and June were dominated by flows into equity index income strategies, but investors are now seeking income from a wider range of sources, including bonds and infrastructure," Global X said.

"The standout was bond ETFs, which attracted a record $1.4 billion in net inflows during the month, surpassing flows into Australian equities and marking the strongest month on record for the asset class."

Vanguard Global Aggregate Bond Index (Hedged) ETF saw the highest inflows at $388 million during the month.

Global X added investors also looked offshore, with global bond ETFs recording their strongest month on record.

"Even adjacent income-focused sectors such as infrastructure ETFs saw record demand, highlighting investors' willingness to look beyond traditional dividend and bond ETFs in search of reliable cash flows," Global X said.