Tech Bleeds While Bonds and Japan Surge

The clearest signal this week: institutional money is rotating hard away from Technology and into fixed income, defensive sectors, and Asian markets. Information Technology ETFs bled $3.1B in net outflows over the past week. That flips the 3-month narrative, where Tech attracted $78B — the single biggest sector inflow over that period.

Geography Flows

The U.S. leads all regions with $19.2B in weekly net inflows. That remains consistent with the 3-month trend, where U.S. ETFs pulled in $383B. Japan is the standout story. It added $8.2B in just one week, with a flow imbalance of 71.2 — well above the 65 threshold for strong buying pressure. Over three months, Japan has drawn $163B. Buyers are not slowing down.

Emerging Markets posted $2.8B in weekly inflows, with an exceptionally high flow imbalance of 88.3. That signals near-unanimous buying pressure. Taiwan added $2.1B on the week, consistent with its $25.4B 3-month run.

China is the notable outlier. It shed $2.4B this week despite sitting on $17.9B of 3-month inflows. That is a meaningful short-term reversal. Hong Kong reinforces the caution, with $992M in weekly outflows and a flow imbalance of just 21.2, down sharply from its 3-month trend.

Sector Rotation

The week-versus-3-month divergence in Tech is the headline. Industrials jumped to second-best sector this week with $1.15B in net inflows and a flow imbalance of 70.7. Over 3 months, Industrials attracted $3.6B — solid, but this week's surge suggests accelerating interest.

Health Care added $746M for the week. It has drawn $7.5B over three months, making it the second-biggest sector recipient across that window. Consumers and Utilities both saw modest weekly inflows. Energy reversed course: it pulled in only $139M this week after shedding $7.3B over 3 months — one of the worst sector-level performances on that longer timeframe.

Consumer Staples and Materials both posted outflows on the week. Defensive positioning is partial, not wholesale.

Asset Class and Strategy

Equities remain the dominant destination. They captured $43B in net flows this week alone. Fixed Income is closing the gap fast. Bonds drew $22B this week with a flow imbalance of 72.8, well into buying territory. Over 3 months, fixed income has taken in $243B. Commodities flipped: they gained $708M this week but shed $31B over 3 months, a notable trend reversal worth watching.

Active strategies are accelerating strongly. Active ETFs pulled in $6.1B this week. Over 3 months, active funds have attracted $225B — nearly half the Vanilla passive total on a relative basis. Dividend strategies saw $1.3B in outflows this week, reversing their $15.7B 3-month inflow run. Momentum ETFs also saw sharp weekly selling.

Overall, the tone tilts modestly risk-on — equities still dominate — but the rotation into bonds, the Tech exit, and the China wobble suggest investors are hedging at the margins.