China Leads the Week as Active Funds Bleed $10B

China ETFs pulled in a net $19.9B in the past week, the single largest geographic inflow across the entire fund flow universe. That is four times larger than the $4.9B that flowed into Japan over the same period. Over three months, China has attracted $36.3B, but Japan has flipped: a $8.0B outflow over three months versus this week's $4.9B inflow. Japan's week looks like a bounce rather than a trend.

Geography Flows: Asia Dominates, EM Splits

The sharpest divergence is inside emerging markets. Broad EM funds shed $2.1B this week, a clear outflow with a flow imbalance reading of just 21 out of 100. Yet Emerging Markets Ex-China pulled in $969M in the same period. Investors are not leaving EM. They are picking their spots, and China is where the conviction is strongest right now.

Taiwan added $1.7B this week and $18.0B over three months, one of the most consistent inflows in the dataset. South Korea drew $1.3B in the week. The Global Ex-North America basket lost $4.1B in the week, its flow imbalance reading a near-zero 0.6, pointing to near-total selling pressure. That group had already been negative over three months at minus $3.9B.

Retail attention for the Global X MLP and Energy Infrastructure ETF (MLPX) spiked 10.0 standard deviations above its own history in the week to 21 October, per Wikipedia page-view data, and for the Capital Group U.S. Small and Mid Cap ETF (CGMM) the same extreme surge was recorded, suggesting retail interest in both energy infrastructure and smaller US companies is picking up sharply.

Sector Rotation: Tech Holds, Utilities Crumble

Information Technology took in $5.3B this week, leading all sectors. That matches its three-month dominance where it attracted $16.0B. Health Care and Industrials also drew positive flows this week, at $623M and $802M respectively.

The reversal to watch is in Utilities and Industrials. Over three months, Utilities pulled in $1.8B and had a positive flow story. This week it bled $924M, with a flow imbalance of just 11.8, the most extreme selling pressure reading of any sector. Industrials flipped the other way: negative over three months at minus $1.1B, but positive this week at $802M.

Financials were the second-largest sector outflow this week at minus $937M. Over three months, they have shed $9.4B, the worst of any sector.

Asset Class and Strategy: Bonds Surge, Active Funds Hit

Equities led all asset classes both this week ($35.4B) and over three months ($531.5B). Fixed income is not far behind, taking $17.8B this week and $296.0B over three months. Commodities shed $1.7B this week after three months of positive flows worth $33.1B, a notable short-term reversal.

The biggest strategy story is the collapse in active fund flows. Active strategies saw $10.3B in net outflows this week, with a flow imbalance of 32.8. Yet over three months, active funds attracted $148.0B. Something shifted sharply this week. Vanilla passive funds absorbed $30.3B. Growth strategies drew $4.1B this week. Value added $1.8B. Both growth and value beat active on the week by a wide margin.

The overall tone this week is risk-on but selective: money is moving into equities and bonds together, favouring Asia and technology, while rotating away from commodities, utilities, and actively managed products.