Japan Steals the Show as Tech Bleeds

Japan is the standout story this week. ETF flows into Japanese equity funds hit $13.9B net over the past seven days. That is the single largest geographic inflow of any region this week. The flow imbalance score reached 79.2 out of 100, signalling strong and consistent buying pressure. Over three months, Japan has pulled in $169.9B net, confirming this is not a one-week blip but a sustained institutional trend.

China tells the opposite story. It shed $5.5B in the past week, with a flow imbalance of just 35.5 — firmly in selling territory. Over three months, China still shows a $17B net inflow, meaning this week's reversal is a notable short-term shift worth watching closely.

Geography Flows

US-focused ETFs attracted $4.5B net this week. That looks modest until you see the gross numbers: $85.6B in and $81B out. The US market is churning heavily, not trending decisively. Emerging Markets ex-China pulled in $2.2B at a flow imbalance of 83.5, a high-conviction buy signal. Global Ex-US ETFs added $1.6B with a 93.5 imbalance, nearly the strongest reading of any geography this week.

Sector Rotation

Tech is under real pressure right now. Information Technology ETFs lost $4.4B net over the past week, making it the worst-performing sector by a wide margin. The flow imbalance was just 38.8 — sellers dominated. That is a sharp weekly reversal. Over three months, IT ETFs actually led all sectors with $76B net inflows, so this week's exodus marks a clear trend break.

Industrials was the top-gaining sector this week with $953M net in, followed by Consumer Discretionary at $718M and Health Care at $622M. Energy also slipped, losing $503M on the week. Energy has also been in outflow over three months at -$7.3B — a consistent trend, not a fluke.

Asset Class and Strategy

Equities pulled in $25.4B net this week and $812B over three months. This is the dominant flow story — institutions remain structurally long stocks. Fixed Income added $15.2B this week with a healthy 68.6 imbalance score. Commodities attracted $1.6B this week, but over three months they show a $30.6B outflow — another notable trend reversal to flag.

On strategy, Active ETFs took in $5.9B this week, continuing a strong three-month run of $222.9B. Passive Vanilla strategies, despite their enormous scale, went slightly negative this week at -$5.7B. Dividend strategies lost $1.4B this week, a reversal from their $15.7B three-month inflow, suggesting some rotation away from income plays.

The overall tone is cautiously risk-on. Equities and bonds are both attracting capital, but within equities the market is rotating hard — out of tech and into cyclical and international plays, with Japan at the centre of that trade.