ETF Flows vs. Index Levels: Are investors still buying the highs in 2026?

The start of 2026 finds global equity markets in a curious position. Index levels across major benchmarks are hovering near or touching all‑time highs, yet investor sentiment feels far from euphoric. Flows into equity ETFs—especially in the U.S.—remain strong and steady, but under the surface the story is more complicated. Some sectors are seeing massive inflows, others notable outflows, and bond ETFs are logging record growth as investors chase income.

Are investors once again “buying the highs,” or is this wave of ETF interest different from the late‑cycle chases of previous bull markets? Understanding the relationship between ETF flows and index levels can help decode what the crowd is doing—and whether the crowd might be right this time.