Tech Exodus Masks Broad Risk-On Rally

China ETFs shed nearly $9.8B in a single week. That is the headline number from this week's ETF flow data — and it marks a sharp reversal from the 3-month trend, where China funds had attracted $20.9B.

The U.S. remains the dominant destination for global ETF capital. American-focused funds pulled in a net $13.9B this week. Over three months, that figure swells to $363B. The momentum is consistent and shows no sign of fading.

Geography Flows

Japan is the standout international winner. Japanese ETFs drew $6.4B in net inflows this week. The 3-month total sits at $140B, making it the second-largest geography by flow volume behind the U.S. The flow imbalance reading of 63.5 confirms sustained buying pressure.

China is the week's biggest reversal story. Three-month flows were solidly positive at $20.9B. This week flipped to a -$9.8B outflow, with a flow imbalance of just 20.9. That signals strong selling pressure. Hong Kong followed a similar pattern. It bled $532M this week and $10.1B over three months.

Developed Markets ex-U.S. continues to attract steady rotation. That category pulled in $1.1B this week, with a flow imbalance of 84.5 — one of the highest readings in the geography table.

Sector Rotation

Technology is the week's biggest loser by a wide margin. Information Technology ETFs saw $3.3B in net outflows this week. That contrasts sharply with the 3-month picture, where Tech absorbed $73.9B — by far the largest sectoral inflow over that period.

Materials took the top spot this week with $2.1B in net inflows. Its flow imbalance hit 86.6. Industrials added $901M. Both sectors show a clear rotation away from high-valuation tech into more cyclical plays.

Energy continued to struggle. It shed $476M this week and $6.9B over three months. That makes it the worst-performing sector over both timeframes. Consumer Staples also saw mild outflows this week, consistent with a risk-on environment where defensives underperform.

Health Care, Real Estate, and Consumer Discretionary all logged modest positive flows this week.

Asset Class and Strategy

Every major asset class saw inflows this week. Equity funds led with $24.1B. Fixed Income added $16.9B. Commodities drew $4.5B — a notable reversal from the 3-month figure, where commodities saw $29B in outflows. That week-over-week turnaround is worth watching.

Active management continues to take share from passive. Active ETFs attracted $7.4B this week. Vanilla passive strategies shed $5.6B despite being net positive over three months at $404.8B. ESG funds pulled in $2.9B this week, a meaningful pickup relative to the 3-month pace.

Growth strategies bled $368M this week. Over three months they attracted $10.4B. That 1-week reversal adds to the rotation signal seen in the tech sector data.

The overall tone is cautiously risk-on. Money is moving into equities, commodities, and active strategies. The rotation out of tech and China into Japan, Materials, and Industrials is the clearest short-term trend shift visible in this week's data.