China Leads as US Bleeds ETF Money

A dramatic geographic reversal defined the past week. China pulled in $8.1B in net ETF inflows, topping all geographies. That stands in sharp contrast to the 3-month trend, where China was a net loser at -$3.4B. The reversal is the clearest signal of the week.

US-focused ETFs told the opposite story. They shed $4.0B in net outflows over the past seven days. Over three months, though, the US remains the undisputed champion at +$470B. The short-term weakness is a notable speed bump, not a structural break.

Japan attracted $5.0B in weekly inflows, reinforcing its 3-month strength of +$162.5B. Taiwan added $2.7B this week and $20.1B over three months. Emerging markets broadly drew $2.6B in fresh money. The non-US developed world is seeing accelerating interest.

South Korea was the notable loser on the week, bleeding -$1.4B. The UK slipped -$193M. These are minor sums compared to the China and Japan flows, but the direction matters.

Sector Rotation

Tech dominated the 3-month picture at +$67.7B. This week it reversed hard, posting a -$4.7B outflow — the worst sector performance of the week by a wide margin. The flow imbalance dropped to just 40.5, signalling clear selling pressure.

Industrials also turned sharply negative. They shed -$2.1B this week after booking a solid +$3.1B over three months. Financials followed with -$1.3B in weekly outflows.

The defensive rotation is subtle but real. Energy gained +$672M this week after suffering -$4.2B over three months. Consumer Staples drew +$414M. Health Care added +$308M. Money is rotating away from growth and cyclicals toward defensives and energy.

Real Estate was the standout 3-month performer outside Tech at +$5.9B, but flows flattened this week.

Asset Class and Strategy

Fixed Income and Equity are running neck and neck this week. Both took in roughly $24B each in net flows. Over three months, equities dominated at +$878B versus bonds at +$233B. The 1-week parity suggests investors are hedging equity exposure with bond purchases simultaneously.

Commodities are under pressure. They lost -$2.5B this week and -$31.3B over three months. Gold and energy ETFs are seeing net redemptions despite global uncertainty.

Active management is the clearest strategic winner. It pulled in $11.0B this week and $229.7B over three months. Its flow imbalance sits at 74.4, well above the 65 threshold for strong buying pressure. Vanilla passive funds also attracted $20.4B this week, keeping a healthy lead by volume.

Growth strategies accumulated $104B over three months. This week, they shed -$384M. Value followed a similar path, losing -$551M on the week after being broadly flat over three months. Both are now short-term losers.

The overall tone is cautiously risk-on. Equity and bond flows are rising together, China is back in favour, and active managers are seeing consistent demand. The tech and cyclicals pullback this week points to selective profit-taking rather than outright risk-off repositioning.