Asia Leads as Financials Fall Out of Favour

Taiwan and South Korea are pulling in money at a pace not seen in years. In the past week alone, Taiwan-focused ETFs attracted $7.5B in net inflows, with a flow imbalance of 96.7 out of 100. South Korea added $9.1B. That intensity is no coincidence. Taiwan export orders totalled $114.2B in September 2026, up 62% on September 2025 and the largest September on record since data began in 1984, according to ORTEX Alt Data. Investors appear to be chasing that signal directly.

China pulled in $16.7B over the week, second only to the US at $22.8B. The US number is large in absolute terms but its flow imbalance sits at just 61.9, meaning gross two-way traffic is heavy. Asia is more one-sided: buyers are dominant.

Geography Flows

The three-month picture shows that Asian momentum is not new. Taiwan has drawn $17.9B over the quarter, South Korea $11.3B. Both are holding their direction. Japan is the notable exception. Over three months it has bled $6.2B, with a flow imbalance of just 49, barely above balanced. Weekly data shows a partial recovery of $3.8B, but the quarterly trend remains negative.

India has also reversed. Over three months it saw $1.2B in outflows. The weekly number was a small $31M outflow. Europe is broadly flat, with Developed Europe drawing modest three-month inflows of $7.5B but no clear weekly momentum.

Sector Rotation

The sharpest reversal is in Financials. Over three months, Financials was the single largest loser, shedding $8.2B in net flows. This week, it flipped: a $541M net inflow, with a flow imbalance of 57. The shift is tentative, but notable given that ORTEX Alt Data shows financials-sector buybacks hit 190 million shares repurchased in Q2 2026, the highest quarterly total in 12 years. Shares repurchased have risen for three consecutive quarters.

Information Technology attracted $8.9B this week, its flow imbalance at 69.8. Over three months it is also positive at $8.2B but the imbalance is lower at 51.6, meaning the weekly conviction is stronger than the quarterly average. Industrials went the other way. Over three months Industrials lost $1.2B. This week it lost another $1.5B, with a flow imbalance of just 29.5. Sellers are in control.

Consumer Discretionary lost $674M this week. Materials shed $403M. Utilities and Real Estate both saw modest selling pressure this week after three months of inflows, a possible sign that the defensive rotation that supported them is fading.

Asset Class and Strategy

Equities took in $70.7B in the past week, the dominant destination. Fixed Income added $13.5B, with a flow imbalance of 64.5. Both remain strongly positive over three months, with equities at $526B and fixed income at $287B. There is no sign of a bond-versus-equity trade-off here. Money is going into both.

Commodities attracted $2.6B this week and $30.5B over three months. Alternatives drew $807M for the week.

On strategy, passive Vanilla funds led at $52.5B for the week. Active strategies pulled in $3.1B, continuing a three-month trend of $166.6B. That three-month active figure is substantial and points to a structural shift toward managed mandates. Value strategies drew $2.4B this week and $10.3B over three months. Momentum strategies flipped: up $217M this week after losing $3.5B over three months. Dividend strategies lost $169M this week despite $11.4B of inflows over the prior quarter, a small but clean reversal.

The overall tone is risk-on, with investors buying equities in Asia and Tech while beginning to rotate out of the defensive trades, including Utilities and Industrials, that dominated the past quarter.