Tech Takes a Hit as Japan and Active Funds Surge

The headline story this week is a sharp reversal in Technology. Info Tech ETFs bled $6.5B in net outflows over the past week. That flips the script entirely. Over three months, the same sector pulled in $65.5B — the biggest sector inflow by far. Traders are clearly taking profits after a strong run.

Geography Flows

The U.S. remains the dominant destination for capital. It drew $13.7B in net inflows this week. That lead holds over three months too, with $477B in cumulative net flows.

Japan is the standout international story. It pulled in $9.3B this week alone. Its flow imbalance hit 73.5 — well into strong buying territory. Over three months, Japan added $155B, the second-largest geographic tally globally. Institutional appetite for Japanese equities shows no sign of slowing.

Emerging Markets attracted $1.4B this week. That's consistent with the three-month trend of $12.4B. China added $1.1B this week, though its three-month net is a modest $3.3B against massive gross flows — a sign of heavy two-way trading rather than conviction.

The week's notable losers were India (outflow of $198M) and the U.K. ($188M out). Both had seen positive flows over three months, making the weekly reversal worth watching.

Sector Rotation

Tech's $6.5B weekly outflow is the loudest signal in this data set. Every other sector posted net inflows this week. Consumer Discretionary led the gainers at $548M, followed by Industrials ($335M) and Health Care ($303M).

Real Estate posted $283M of inflows this week. That matches its strong three-month showing of $5.8B — the second-best sector over that period behind Tech. Healthcare's three-month tally of $4.9B also looks solid.

Energy is a notable trend reversal. Over three months, Energy ETFs shed $4.6B. This week, the sector pulled in $200M of fresh money. It is a small figure, but the direction has flipped.

Asset Class and Strategy

Equities absorbed $30B in net flows this week. Fixed Income added $10.1B. Both asset classes have seen sustained inflows over three months — equities $878B, bonds $235B. The risk-on tone is broad.

Commodities stand out as the clear loser. They lost $4.5B this week and $30.5B over three months. The selling pressure is persistent, with a flow imbalance of just 27.8 this week.

Active management is attracting serious money. Active ETFs pulled in $9.1B this week, a flow imbalance of 74.6. Over three months, Active strategies added $226B. Growth strategies, however, flipped negative this week at -$659M, despite a massive $103B three-month inflow. That divergence tracks directly with the Tech selloff.

Overall, this is a cautiously risk-on week. Equities and bonds both attract flows, but money is rotating hard — out of Tech and Growth, into Japan, defensives, and active strategies.