China Leads a Global Risk-On Surge

China dominates ETF inflows this week. $23.9B poured into China-focused funds in the past five trading days. That is nearly twice the next-largest geographic flow. The buying pressure reading of 82.8 out of 100 signals strong and broad demand, not just a few large trades. Over three months, China has attracted $39.8B, but its weekly pace has now overtaken every other region in relative terms. Money is moving into China faster now than at any point in the recent trend.

Geography Flows

Japan is the week's sharpest reversal. Over three months, Japan funds bled $13.3B in net outflows. This week, $5.5B flowed back in, with a buying pressure reading of 87.8. That is the biggest week-versus-trend flip in the geography table. Whether the reversal holds is unclear, but the magnitude is hard to ignore.

The US attracted $3.3B for the week, continuing its steady 3-month dominance of $271.9B in total net inflows. US flows remain balanced, with a 51.8 imbalance score, suggesting two-way trading rather than a one-directional push.

India stood out as the week's notable loser. Flow imbalance fell to just 8.6, the lowest in the geography table. Net outflows ran to $36.6M on the week. India has also been negative over three months, down $953.9M. Wireless broadband subscribers in India rose for the sixth consecutive month to 1.059 billion in September, per TRAI data, but that macro tailwind has not translated into ETF buying pressure this week.

South Korea also saw $1.2B of net outflows this week, reversing a positive 3-month trend of $5.0B.

Sector Rotation

Tech leads sector inflows over both periods. $1.6B came in this week. Over three months, tech has attracted $14.4B. But the flow imbalance score of 55.1 is barely above neutral, meaning the sector is absorbing significant two-way traffic.

The biggest weekly sector reversal is Industrials. Over three months, Industrials posted a net outflow of $718M. This week, $494M flowed in. Consumer Discretionary added $229M this week after three months of net selling.

Utilities bled $876M this week. That is a sharp turn from its positive 3-month trend of $1.7B in net inflows. Health Care lost $721M on the week, though it sits on a $2.5B gain over three months. Materials dropped $445M this week after running slightly positive over three months. The defensives are being sold.

Asset Class and Strategy

Equities took in $43.6B this week. Fixed Income added $19.9B. Both are running hot. Over three months, equities have pulled in $517.9B and fixed income $300.3B. The parallel inflow into both asset classes points to broad demand for financial assets rather than a simple rotation from bonds to stocks.

Commodities reversed course. They attracted $32.9B over three months but shed $1.9B this week. That is the only meaningful 3-month-positive, 1-week-negative asset class flip in the data.

On strategy, growth funds took in $4.2B this week. Value funds lost $1.7B. Over three months, value had attracted $8.8B, so this week's reversal is notable. Active strategies pulled in $3.2B for the week and $160.1B over three months. The active management trend continues without interruption.

The overall tone is risk-on. Money is rotating away from defensives, commodities and value into equities, growth and momentum trades, with China and a recovering Japan at the geographic centre of the move.