China Leads as US Flows Turn Negative

China grabbed the biggest inflow of the week. ETFs tracking Chinese equities pulled in $8.1B net over the past seven days. That made China the top geography for weekly flows. The contrast with its three-month picture is stark. Over three months, China is actually in outflow territory, down $3.4B. Money that was leaving China is now rushing back in.

The US tells the opposite story. American equity ETFs bled $4.0B in net outflows this week. That stands against a dominant $470B net inflow over three months. This week's US outflow is a clear short-term reversal from a very strong longer-term trend.

Geography Flows

Japan attracted $5.0B in net inflows this week. Flow imbalance hit 67.8, showing solid buying pressure. Japan is consistent too — $162.5B flowed in over three months. Taiwan added $2.7B this week, with a flow imbalance of 88.0, indicating near one-sided buying. Emerging Markets overall drew $2.6B in the week, continuing a positive three-month trend of $12.7B.

South Korea was the worst-performing geography this week. Outflows hit $1.4B, with a flow imbalance of just 40.3. North America ex-US also leaked, losing $810M. The UK shed $193M this week, though it shows a positive $2.8B over three months.

Sector Rotation

Tech is taking the hardest hit. Information Technology ETFs lost $4.7B in net outflows this week alone. Buyers pulled gross outflows of $14.6B against $9.9B of inflows. Over three months, Tech is the top sector by inflow at $67.7B. This week's reversal is sharp and significant.

Industrials also suffered. The sector lost $2.1B this week. Over three months, Industrials held positive territory at $3.1B. Financials dropped $1.3B this week.

The week's winners in sectors are defensive names. Energy took in $672M. Consumer Staples added $414M. Health Care drew $308M. All three were positive this week despite the broader risk-off shift in sectors.

Asset Class & Strategy

Fixed Income and Equity flows are running neck and neck this week. Fixed Income pulled in $24.3B net. Equity matched it almost exactly at $24.0B net. Over three months, Equity dwarfs bonds — $877.8B vs $233.5B. Commodities lost $2.5B this week and $31.3B over three months, a sustained unwind.

Active ETFs remain in strong demand. They took in $11.0B this week, with a flow imbalance of 74.4. Over three months, Active funds absorbed $229.7B. Vanilla (passive) strategies still dominate by volume at $20.4B this week. Growth strategies have reversed — up $104B over three months but down $384M this week. Value is also negative on the week, down $551M.

Overall, the tone is cautiously risk-off in the near term. Money is rotating out of US equities, Tech, and Industrials into bonds, defensive sectors, and international markets — with China the standout beneficiary of this week's repositioning.