China Leads a Risk-On Week for ETF Flows

China topped the geography table this week, pulling in a net $14.6B over the past seven days. That is a strong imbalance reading of 77.5, well above the 65 threshold that signals clear buying pressure. The US came close behind at $14B, but the scale difference is striking: China's $14.6B came from a much smaller asset base. Over three months, China has attracted $27.1B, so the weekly surge looks like an acceleration of an established trend, not a reversal.

Japan tells the opposite story. Over three months it is down $8B net, one of the few major geographies in outflow on a quarterly basis. This week it bounced back to $6.7B in, with a high imbalance of 87. The weekly rebound looks sharp, but the three-month picture remains structurally negative. Taiwan and South Korea both attracted strong weekly inflows of $3.6B and $3.9B respectively, with imbalance readings above 79 on each. The quarter-on-quarter backdrop supports both: Taiwan has pulled in $18B over three months, South Korea $7.5B.

Emerging Markets as a broad category flipped negative this week at -$2.2B, despite three months of steady inflows totalling $12.5B. That short-term reversal looks like a rotation into individual country exposures rather than a blanket exit from the asset class.

Geography Flows

The clearest trend outside Asia is the weakness in broad ex-North America mandates. Global Ex-North America bled -$4.1B this week, with a near-zero imbalance of 0.7, almost entirely outflows. Brazil was the one bright spot in Latin America, drawing $456M with a high imbalance of 90. Brazil airline departures hit a record September high of 79,566 and paid passengers reached 10.85 million, also a record. That improving travel picture is consistent with continued investor interest.

India flipped to small outflows this week (-$38M) after sitting in the red over three months as well (-$1.2B). The consistent selling pressure stands out in an otherwise broadly pro-risk geography picture.

Sector Rotation

Information Technology was the only sector with meaningful inflows this week at $7.6B. Every other major sector was either flat or in outflow. Utilities lost -$1.2B. Financials shed -$1B. Consumer Discretionary and Consumer Staples each saw outflows above -$700M. Energy was the second-best sector at +$591M, with a solid imbalance of 68.

The contrast with the three-month picture is notable. Over three months, Financials has lost -$9.5B, the biggest sectoral outflow by far. IT leads with $15.8B in. Health Care (+$3B), Real Estate (+$2.8B), and Energy (+$2.3B) have all attracted steady longer-term flows, even as this week's data shows IT dominating narrowly.

MBG reports on 28 October. Dutch car registrations, which lead Mercedes-Benz revenue by 26 days with a strong fit, are running -6% on the same quarter last year across all three months so far. That is a weak backdrop for the sector heading into a major European auto print.

VOW3 reports on 29 October. Austrian car registrations, a moderate-fit leading indicator for Volkswagen revenue, are also running -6% year on year for the quarter. Both data points point in the same direction for European autos.

Asset Class and Strategy

Equity took in $47.4B this week and Fixed Income added $20.3B. Both are in clear demand. Commodities slipped to -$1B after three months of strong inflows totalling $33.4B. Alternatives also lost ground at -$969M for the week.

On strategy, passive Vanilla funds led with $36.3B in. Active strategies saw outflows of -$9.2B this week, a reversal from three months where Active pulled in $147.5B, the second-largest strategy flow over that period. That gap is one of the sharpest week-versus-quarter divergences in the data. Growth added $3B and Value $1.8B this week, both with strong imbalance readings. Momentum was a small loser at -$98M for the week and -$3.5B over three months.

The overall tone is risk-on. Equities and bonds are both attracting money. China, Taiwan, and South Korea are the geographic winners. Tech leads sectors. The one cautionary note is the sharp weekly reversal in Active strategies and the continued drain from broad EM mandates, suggesting some selectivity underneath an otherwise constructive surface.