Japan Tops Weekly Flows, Tech Bleeds $5.8B

Japan led all geographic ETF inflows this week. It pulled in a net $14.0B, the single largest weekly flow across any region. That dwarfs the $6.3B that went into U.S.-focused funds. Japan's flow imbalance sat at 79.1 — firmly in buying pressure territory. Over three months, Japan has collected $144B in net flows. The conviction behind Japanese equities is consistent and deep.

China told the opposite story. It shed $6.6B in net outflows this week, making it the biggest geographic loser. Gross selling hit $13.4B against just $6.9B in inflows. Over three months, China was a net receiver of $18.5B — meaning this week marks a sharp reversal. Emerging Markets ex-China also saw near-zero buying pressure (flow imbalance: 7.3), suggesting the China exodus is not being offset elsewhere in the developing world.

Geography Flows

Japan dominated. Global Ex-U.S. funds saw a near-perfect flow imbalance of 94.0 — almost all fresh money, almost no redemptions. Developed Europe gathered $1.1B this week. That follows a flat three-month trend where Developed Europe was roughly breakeven at -$641M. The U.K. slipped marginally week-on-week but held positive territory over three months.

Sector Rotation

Technology suffered the sharpest outflow of any sector. IT lost $5.8B in net flows this week, with $14.6B in gross selling against $8.8B in buying. Its flow imbalance dropped to 37.5 — deep in selling territory. Over three months, IT had been the top inflow recipient with $73.6B. This week's reversal is notable. It could signal profit-taking after a strong quarter.

Industrials took up the slack. The sector drew $1.3B this week, with a flow imbalance of 68.5. Consumer Discretionary and Health Care followed with $888M and $823M respectively. Materials added $587M. Energy shed $321M on the week, extending a three-month trend of -$7.4B.

Asset Class & Strategy

Equities led all asset classes with $28.6B in net inflows. Fixed Income was close behind at $18.9B, with a flow imbalance of 69.8 — stronger buying pressure than equities. Over three months, bonds drew $245.9B versus $772.6B for equities. Both asset classes are firmly in demand.

Commodities attracted $2.5B this week. That flips a three-month trend where commodities bled $30.2B. One week does not confirm a reversal, but the shift is worth watching.

On strategy, Active funds gathered $7.2B this week with a flow imbalance of 71.5. Vanilla passive funds saw a net outflow of $8.1B. That is a meaningful short-term reversal — over three months, Vanilla funds had absorbed $390B. ESG pulled in $3.1B on the week. Dividend strategies lost $1.1B, reversing their positive three-month trend of $16.2B.

Overall, the weekly tone is cautiously risk-on. Money is moving into equities, bonds, and active strategies simultaneously — while rotating out of tech and vanilla passive. Japan is the clearest beneficiary.