China Steals the Show From US Equities

China pulled in $8.1B of ETF inflows in the past week. That makes it the top geographic destination globally. The US, by contrast, bled $4.0B in net outflows — a sharp reversal from its dominant $470B three-month position.

The contrast is stark. Over three months, US-focused ETFs absorbed more money than any other geography by a wide margin. This week, that flow has reversed. Money is leaving US-listed equity exposure and rotating toward Asia and non-US developed markets.

Geography Flows

China leads all geographies with $8.1B net inflows this week. Japan follows with $5.0B. Both show strong buying pressure — China's flow imbalance sits at 63, Japan's at 68. Taiwan added $2.7B, and Emerging Markets as a whole drew $2.6B.

The US saw a net outflow of $4.0B this week, despite gross inflows of $63B. Gross outflows of $67B overwhelmed them. South Korea lost $1.4B. The UK and Germany also posted small net outflows.

Over three months, the picture differs. The US leads with $470B net inflow. Japan sits at $163B. China, however, was slightly negative over that period at -$3.4B. This week's China inflow is a clear trend break.

Sector Rotation

Tech took the biggest hit. Information Technology ETFs shed $4.7B net this week. Industrials lost $2.1B. Financials dropped $1.3B.

Over three months, Tech led all sectors with $67.7B in inflows. This week's $4.7B outflow is a meaningful reversal. Industrials, by contrast, gained $3.1B over three months despite this week's selling.

Defensive sectors attracted buyers this week. Energy pulled in $672M. Consumer Staples gained $414M. Health Care added $308M. None of these were top performers over three months, signalling a short-term defensive rotation.

Asset Class and Strategy

Fixed Income and Equity ran almost neck and neck for weekly inflows. Fixed Income pulled in $24.3B net. Equity matched it at $24.0B. Both sectors are attracting simultaneous buying, which is unusual.

Commodities saw $2.5B in outflows this week. Over three months, commodities lost $31.3B — the only asset class with sustained net selling pressure.

On strategy, active management continues to attract capital. Active ETFs drew $11.0B net this week, with a flow imbalance of 74. Over three months, active gathered $230B — running at roughly 55% of vanilla passive flows despite a fraction of the asset base.

Growth strategies saw $104B inflows over three months. This week, they recorded a small net outflow of $384M. Value strategies were also slightly negative. The short-term data shows a pause in the growth trade.

ESG maintained positive flows in both periods — $881M this week and $9.4B over three months.

The overall tone leans cautiously risk-on. Fixed income and equity are growing together, defensive sectors attracted bids, and the US is ceding short-term flow leadership to Asia.