US Outflow Flips as Asia Grabs the Bid

The headline story this week: US-focused ETFs shed a net $4.0B in just seven days. That reverses a three-month trend where US funds led all geographies with $470B in net inflows. Money is rotating fast, and Asia is the main destination.

Geography Flows

China pulled in $8.1B net this week. That is the largest single-geography inflow of the past seven days. Flow imbalance hit 63.4, firmly in buying territory. Over three months, China told a different story — it bled $3.4B net, making this week a sharp reversal worth watching.

Japan added $5.0B in the week. That is consistent with the three-month picture, where Japan ranks second globally with $162.5B net inflows. Demand for Japanese exposure remains steady.

Taiwan attracted $2.7B this week, with a flow imbalance of 88.0 — near maximum buying pressure. Emerging Markets broadly added $2.6B. Developed Markets ex-US pulled in $2.2B, with imbalance at 90.6.

US ETFs lost $4.0B net on the week despite $63B of gross inflows. Outflows hit $67B. South Korea also saw $1.4B exit, and the UK shed $193M.

Sector Rotation

Tech bore the brunt of selling this week. Information Technology ETFs saw $4.7B net outflows — the largest sector outflow. Flow imbalance fell to 40.5, indicating clear selling pressure. Over three months, Tech was the runaway winner with $67.7B net inflows. That momentum is now stalling.

Industrials bled $2.1B this week. Financials lost $1.3B. Both sectors show weak imbalance scores below 37.

Energy was the brightest sector this week, pulling in $672M net. Consumer Staples added $414M. Health Care added $308M. All three are traditionally defensive. That defensive tilt contrasts sharply with the three-month backdrop, where Tech dominated and Energy actually lost $4.2B net.

The rotation signal is clear: money is leaving growth and cyclical sectors, rotating toward defensives.

Asset Class and Strategy

Fixed Income and Equity finished nearly level on the week — $24.3B and $24.0B net respectively. Fixed Income's flow imbalance of 75.0 shows stronger buying conviction than Equity's 55.3. Over three months, Equity dominated with $878B net against Fixed Income's $234B, so bonds are catching up fast.

Commodities lost $2.5B this week. They have also shed $31.3B over three months. Investors are avoiding the asset class consistently.

Active strategies pulled in $11.0B this week, second only to Vanilla passive funds at $20.4B. Active's imbalance of 74.4 is one of the highest readings across all categories. Over three months, Active has accumulated $229.7B net. Growth strategies reversed over three months — they attracted $104B over 90 days but are now bleeding $384M on the week.

The overall tone is cautious. Defensives, bonds, and ex-US geographies are attracting fresh money. Tech and US equity are giving ground. Risk appetite is cooling at the margin.