Asia Surge Shakes Up ETF Flows

China and Japan are pulling the most dramatic money in this week. Those two markets alone attracted $26.7B in net ETF inflows over the past seven days. That stands out sharply against a three-month backdrop where the US dominated by a wide margin.

Geography Flows

The US led all geographies with $24.7B in net inflows this week. But the real stories are in Asia. Japan pulled in $13.8B with a flow imbalance of 82.6 — a strong buying signal. China followed closely with $12.9B. Taiwan added another $5.9B, with a near-perfect imbalance score of 96.4. That means almost all ETF activity in Taiwan was buying.

Over three months, the US remains the top destination at $358.6B. Japan sits second at $160.9B. China attracted only $18.9B across the full quarter, making this week's $12.9B surge a notable acceleration. Hong Kong is the clearest loser. It posted a $1.8B outflow this week and a $9.7B outflow over three months. Selling pressure there remains consistent.

India also saw modest outflows this week of $434M. The flow imbalance of just 7.8 signals strong selling pressure with very little buying activity.

Sector Rotation

Information Technology dominated sector flows. IT ETFs pulled in $11B this week alone. Over three months, the same sector attracted $77.1B — the biggest sector number by far. Tech appetite shows no signs of fading.

Energy is the clearest loser. It bled $463M this week, adding to a $5.2B three-month outflow. The flow imbalance of 37.5 this week signals sellers are firmly in control. Communication Services also saw mild outflows of $201M this week. Real Estate quietly gained $617M this week and $6.5B over three months. Financials came in second this week at $1.2B, though the three-month figure of $3.6B suggests a more modest trend.

Industrials showed a notable shift. Over three months, it attracted $2.7B. This week's net inflow was only $118M, suggesting momentum may be slowing.

Asset Class and Strategy

Equities dominated all other asset classes. They attracted $76.7B this week and $800.8B over three months. Fixed income also held up. Bonds pulled in $11.9B this week and $235.2B over the quarter — a robust and consistent buyer base.

Commodities reversed course sharply. Over three months, commodities saw a $30.5B outflow. This week flipped to a small $509M inflow. That reversal is worth watching. Currency ETFs remain unpopular, with $243M in outflows this week and $6.1B over three months.

On strategy, active management continues to attract serious capital. Active ETFs gained $8.1B this week and $231.1B over three months. Dividend strategies attracted $4.1B this week with a flow imbalance of 94.7 — the clearest conviction trade in the strategy space. ESG reversed its three-month positive trend, slipping into mild outflow this week at -$135M.

The overall tone is clearly risk-on. Equities, tech, and Asian markets are drawing institutional money in size. Bonds remain well-bid. Commodities and Energy are the notable exceptions.