Japan Dominates as Tech Flows Reverse

Japan is the standout story this week. ETF flows into Japanese-focused funds hit $14.9B net in the past seven days. That is the largest geographic inflow by a wide margin. Flow imbalance sits at 82.8 — firmly in buying-pressure territory. Over three months, Japan has pulled in $146B, second only to the US. Institutional interest in Japan shows no sign of slowing.

China tells the opposite story. A $9B net outflow hit Chinese ETFs this week, with a flow imbalance of just 22.6 — deep in selling territory. That is a sharp reversal. Over three months, China was actually a net recipient of $18.2B. The weekly flip signals fresh caution toward Chinese assets.

Geography Flows

Beyond Japan, money is spreading into developed markets broadly. Developed Markets ex-US pulled in $2.4B this week, with an 84% flow imbalance. Global Ex-US funds show an extraordinary 97.9 imbalance — almost pure inflows, no offsetting selling. South Korea suffered a $1.4B weekly outflow. Over three months, however, Korea attracted $39.8B, so this week's blip may be profit-taking rather than a trend shift.

Sector Rotation

Technology is this week's biggest sector loser. $5.7B left Information Technology ETFs in the past seven days. Flow imbalance: 34.6 — clearly in outflow territory. Over three months, Tech was the undisputed champion with $73.3B of net inflows. The reversal is sharp and worth watching.

The money that left Tech went somewhere. Industrials took in $949M this week, with a 65.9 imbalance. Materials added $931M. Health Care attracted $755M. Real Estate collected $634M. Consumer Discretionary added $602M. Energy, like Tech, sat in outflow — down $818M for the week despite modest 3-month inflows.

Asset Class & Strategy

Bonds are back in demand. Fixed Income ETFs pulled in $17.3B this week, with a 73.1 flow imbalance. That compares to $245.9B over three months — so the bond buying trend is intact and accelerating. Equities still lead in raw dollar terms at $18.9B for the week, but the Fixed Income chase is closing the gap.

Commodities reversed sharply. Over three months, commodities saw a $30B outflow. This week they attracted $2.7B, with a 65.8 imbalance. A short-term bounce in an otherwise weak trend.

On strategy, Active ETFs remain the structural winner — $6.2B this week, $221B over three months, both with strong imbalances above 72. Vanilla passive funds bled $14.7B this week despite a positive 3-month trend. Dividend strategies attracted $1.8B. Growth and Momentum — both net positive over 3 months — turned to outflows this week.

Overall, the tone is cautious rotation: out of Tech, out of China, into quality income, Japan, and bonds. Risk appetite is selective, not absent.