Bonds Lead, but Stocks Still Draw Cash

Fixed Income is the standout story this week. ETF investors poured a net $23.3B into bond funds over the past seven days. That dwarfs every other asset class on a 1-week basis. Equity ETFs added $6.5B net — positive, but modest by comparison.

Over three months, the picture flips in scale. Equity ETFs dominate the longer trend with $660B in net inflows versus $232B for Fixed Income. The weekly bond surge is a meaningful short-term shift. Investors are hedging, not abandoning equities.

Geography Flows

US-listed ETFs bled $5B net in the past week. That is the single largest geographic outflow. The selling pressure is notable, with a flow imbalance of just 47.8 — slightly below neutral.

International markets are picking up the slack. Global ETFs took in $3B net, Developed Markets added $1.9B, and Emerging Markets attracted $1.2B. Japan pulled in $937M. Developed Europe added $570M.

The 3-month view tells a consistent story. The US leads all geographies with $264B in net inflows over 90 days. Japan ranks second at $96B, followed by Global funds at $77B. The short-term US stumble does not yet challenge that longer trend.

Brazil stands out as a reversal. It attracted $349M this week, but sits $1.2B in outflows over three months. Investors may be dipping back in after a rough quarter.

Sector Rotation

Technology leads sector inflows over one week at $589M net. Financials rank second at $329M. Both are modest flows relative to AUM.

The losers this week are more telling. Consumer Discretionary shed $481M. Industrials lost $400M. Both sectors face selling pressure, with flow imbalances of 25 and 33 respectively — well into bearish territory.

Over three months, Technology dominates at $38.9B in net inflows. Health Care follows at $6.4B. Energy is the biggest loser over 90 days, shedding $4B — and it barely scraped positive this week at $63M. That is a sector under sustained pressure.

Industrials reversed hard. It collected $2B over three months but lost $400M this week. That weekly reversal is worth watching.

Asset Class & Strategy

Alternatives and Commodities both attracted small but positive flows this week — $601M and $914M respectively. These are not big numbers, but the direction is consistent with mild risk hedging.

On strategy, the clearest signal is the shift to active management. Active ETFs drew $962M this week and $181B over three months. The 3-month flow imbalance of 76 signals persistent buying pressure.

Dividend strategies also drew $1.1B this week, with a flow imbalance of 84 — among the highest in the strategy table. Growth ETFs added $1B. Both suggest investors want quality and income rather than pure speculation.

Vanilla passive ETFs lost $2.4B net this week, even as they dominate 3-month totals. That short-term reversal hints at rotation into more targeted strategies.

Overall, the tone is cautiously defensive. Bonds are surging short-term. International markets are gaining traction. Passive flows are slipping while active, dividend, and fixed income strategies take in fresh cash.