Japan Steals the Show as Tech Haemorrhages Cash

Japan topped all geographic flows this past week. ETFs tracking Japanese equities pulled in a net $14.0B. That is the strongest single-region reading across all geographies in the 1-week window.

China tells the opposite story. It shed $6.6B in the same period, with outflows of $13.4B swamping inflows of $6.9B. Its flow imbalance dropped to 33.8, firmly in selling-pressure territory. Over three months China managed a net gain of $18.5B — making this week's reversal a clear trend break worth watching.

Geography Flows

Emerging Markets as a broad bucket drew $2.4B this week, with a strong flow imbalance of 82.5. Global Ex-U.S. funds were almost entirely one-directional, posting a 94.0 imbalance and $1.7B in net inflows. The U.S. added $6.3B net, but that figure looks thin against $97.5B in gross inflows and $91.2B in outflows. The gross churn shows uncertainty rather than clear conviction. Developed Europe attracted $1.1B. Hong Kong lost $885M, continuing its three-month pattern of $9.8B in cumulative outflows.

Sector Rotation

Tech is under heavy pressure right now. Information Technology bled $5.8B in the past week alone. Yet over three months it led all sectors with $73.6B in net inflows. The gap is stark. Short-term sellers are fighting a longer trend of institutional accumulation in tech.

Industrials absorbed $1.3B this week, up from a modest $4.0B over three months. Consumer Discretionary took in $888M. Health Care added $823M. Energy reversed course — it lost $321M this week after shedding $7.4B over three months. That makes Energy the weakest sector across both time frames. Materials added $587M this week, a relative bright spot.

Asset Class & Strategy

Equities remain the destination of choice. Equity ETFs gathered $28.6B net in one week and $772.6B over three months. Fixed income followed with $18.9B this week and $245.9B over three months. Commodities are a three-month loser at -$30.2B, yet staged a $2.5B recovery this week. That short-term bounce bears watching.

Active strategies continue their structural rise. Active ETFs pulled in $7.2B this week and $221.4B over three months, a 76.3 flow imbalance over the quarter. Vanilla (passive) strategies bled $8.1B this week despite dominating three-month flows at $390.2B. Growth ETFs were also net sellers this week at -$1.5B, a reversal from $10.3B of inflows over three months. Dividends lost $1.1B this week but gained $16.2B over the quarter — another short-term trend break to note.

Overall, the tone is cautiously risk-on. Money is moving into equities and bonds simultaneously. Japan and emerging markets draw fresh capital. Tech and China face short-term selling pressure despite strong three-month bases.