China Surge Signals Big Rotation Shift

The week's standout story is China. ETFs focused on Chinese equities pulled in $19B net over the past seven days. That compares to a $5B net outflow over the prior three months. The reversal is sharp and hard to miss.

The U.S. remains the largest single destination by volume. American equity ETFs drew $28.2B net this week. Flow imbalance sits at 62.4 — buyers are in control, but not overwhelmingly so. Over three months, the U.S. has absorbed $463.6B net, still the dominant geography by a wide margin.

Geography Flows

China's weekly surge is the clearest trend shift in the data. Inflows hit $27.7B against just $8.7B in outflows. Flow imbalance jumped to 76.1 — strong buying pressure. Three months ago, this same group was a net seller. That reversal signals a meaningful change in appetite for Chinese exposure.

Taiwan also stands out. Its flow imbalance hit 96.9 this week — near-total buying dominance. Net inflows reached $3.8B. Taiwan has now attracted consistent inflows over both time frames, ranking among the cleanest buy signals in the geography data.

Japan tells the opposite story. It is the third-largest geography by three-month inflows at $172B net — a massive figure. But this week it flipped to a $993M net outflow. Flow imbalance dropped to 43.9. The three-month trend was strong. The weekly reversal is a warning sign worth watching.

Sector Rotation

Technology leads all sectors with $6.6B in net inflows this week. Over three months, it dominates even more at $71.1B. The sector is pulling money from both directions. Financials and Health Care follow at roughly $1.3B each for the week.

The sharpest weekly loser is Industrials, down $834M net. That is a notable reversal. Over three months, Industrials were a net gainer at $2.9B. The week's selling suggests short-term profit-taking or rotation away from the sector. Energy is flat on the week but bled $4.5B over three months — a persistent underperformer.

Asset Class & Strategy

Equities dominate. $64B net flowed into equity ETFs this week alone. Fixed income added $24.9B. Flow imbalance for fixed income sits at 77.1 — buyers are well ahead of sellers. That is the highest imbalance of any major asset class, suggesting bond demand is quietly strong.

Commodities attracted $2.7B this week. But over three months, commodities bled $27B net. The weekly number looks like a bounce, not a trend reversal. Currency ETFs also reversed — positive $593M this week after a $5.9B net outflow over three months.

On strategy, vanilla passive funds dominate at $55.5B net this week. Active strategies added $8.3B. Growth strategies pulled in $2.2B. Price-weighted funds — notably a proxy for Nikkei-linked products — saw $2.1B leave this week, consistent with the Japan outflow signal.

The overall tone is risk-on. Equities and fixed income are both attracting money, China is reversing, and defensive plays are quiet.