U.S. listed exchange traded funds (ETFs) continued their meteoric rise in July with inflows rising another $27 billion from June’s already lofty levels.

July year-to-date inflows are now at $273 billion, a scant $13 billion shy of their all-time annual record level set in 2016, according to the latest U.S. ETF Flash Flows report from State Street Global Advisors.

“There is still a lot of time left on the clock, but 2017 is shaping up to be another banner year,” began Matthew Bartolini, Head of SPDR Americas Research at SSGA. “However, it is worth noting that the pace of inflows slowed in July. Equity funds posted half of what they did back in June, and flows for commodity and specialty funds were negative. In fact, with so much tranquility and the realization that the reflation trade is nothing more than distant memory, commodity funds are now negative across the board for all measured time periods below, representing an $8 billion drag on flow totals for the industry.”

In summary:

• Equity ETFs attracted more than $18.8 billion in July, as investors shrugged off turmoil in DC and subdued inflation, GDP and wage growth;
• Fixed income ETFs added nearly $12 billion in July with the aggregate and corporate sectors accounting for 71% of flows;
• On the sector level, investors favored Financials, Technology and Healthcare in July, which attracted $1.6 billion, $655 million and $609 million, respec
• tively.  Despite continued dollar weakness, Materials ETFs saw $1 billion of outflows.

In looking at fixed income ETFs, Bartolini said that inflows remain on pace to set a new annual record for the second year in a row. July marked the fourth month in a row with over $10 billion plus in fixed income flows, the longest 8-figure streak on record for the ETF segment that turned 15 years old during July.

But whichever asset class records the most inflows – equities or fixed income – Inflows are inflows. He did point out that equities continue to take the cake, more than doubling fixed income inflows year to date with a sizeable $190 billion haul.

“The caveat to all of this is that in terms of market share of ETF industry assets, fixed income funds have taken in more as a percentage of their asset base,” Bartolini said. “So even if the flow totals may be smaller, the impact felt to the ETF industry is larger, and this trend is likely to persist as investors continuously utilize fixed income ETFs within portfolios to manage liquidity risks, alter duration, and seek income opportunities within specific market segments.”

Looking internationally, investors continued to seek international exposures in July, pouring $9 billion into all international funds.

Within the broad category, emerging market equities continued to gather assets with $3 billion amassed in July, raising the 2017 haul to $25 billion, SSGA reported. This pervasive interest in emerging markets, Bartolini said, remains fueled by attractive valuations, increasing global growth optimism, and a more pleasant macro environment for EM stocks and nations, featuring a transparent and gradual Federal Reserve combined with a weaker dollar that has fallen 10% off post US-election highs.

“For developed equities, after such torrid gains post the French election, Eurozone equity returns were barely in the black in July, and flows, while still positive, slowed to $850 million, a reduction from the prior three-month totals of $9.5 billion,” Bartolini said.

On a sector level, Bartolini said sector rotation was making him “dizzy.” After carrying the market – and the flows – at the start of the year, technology funds posted outflows in June as investors started to wonder if the growth was worth the price, he noted. But that softness was transitory. Strong earnings trends continued to materialize as tech stocks, he reminded, posted the largest upside earnings revision out of any sector in the second quarter. The $655 million of inflows in July reversed the blip witnessed in the prior month.

“Elsewhere, financials have posted street-beating earnings so far and cruised through stress tests with ease. As a result, the sector drew over $1.5 billion of assets for the second month in a row,” Bartolini said.”

Healthcare. Obamacare. Repeal or not. Bartolini said that as the Republican health care initiative imploded in the Senate, sector flows remained positive after being the leading asset gather in June. June’s optimism was dampened in July, but not stamped out entirely as health care still recorded the third most inflows in 2017 and is now the top performing sector year to date.

“This sector rotation underscores the vertigo inducing policy uncertainty in Washington, but investors continue to give the impression that they’ve brought along their Dramamine,” Bartolini said. “But with staffing shake-ups now par for the course and the lack of movement on pro-growth legislation, it seems inevitable that markets may soon demand steadier footing – especially where valuations reside.”