China Steals the Week as Value Falls Out of Favour

China led all geographies this week by a wide margin. ETFs targeting Chinese equities pulled in $17.9B net over the past five days, a flow_imbalance score of 78.7 indicating strong buying pressure. That compares with $36.3B over the full three months, meaning this week alone accounted for roughly half the quarter's China inflows. Japan ran in the opposite direction. It attracted $5.7B this week but has bled $15.3B over three months, a striking reversal that signals last quarter's Japan enthusiasm has cooled sharply.

The US drew $10B in net inflows this week, consistent with its dominant $269B three-month haul. South Korea was the week's biggest loser geographically, shedding $4.2B with a flow imbalance of just 18.3, heavy selling pressure with little offset.

Geography Flows

China and Japan tell the clearest story. China's weekly inflow imbalance of 78.7 contrasts directly with Japan's three-month outflow of $15.3B. Money that sat in Japanese equities through summer appears to be rotating into Chinese names. Taiwan held steady, attracting $1.9B this week after a strong $17.4B over three months. India saw minor outflows both weekly and quarterly, a quiet but persistent softness.

Sector Rotation

The sharpest reversal this week sits in Financials. Over three months, Financials suffered the heaviest sector outflow of any group: $11.1B out. Yet this week, Financials pulled in $701M net, suggesting short-term re-entry after a bruising quarter. Industrials flipped the opposite way. It attracted $531M this week, but over three months it was essentially flat with a small $652M outflow. Information Technology topped weekly sector inflows at $940M, consistent with its $9.6B quarterly gain. Health Care reversed course: it absorbed $2.6B over three months but shed $151M this week. Materials also weakened on the week, losing $270M, despite managing a modest $956M quarterly inflow.

Asset Class and Strategy

Equities dominated both timeframes. This week, equity ETFs gathered $38.1B net. Fixed income added $14.9B, with a flow imbalance of 65.1 pointing to genuine buying conviction rather than balanced two-way flows. Over three months, fixed income pulled in $299B versus equities at $504B. Commodities reversed sharply: a $33.2B quarterly inflow turned into a $130M weekly outflow, suggesting the recent commodity tailwind is fading.

On strategy, the most striking divergence is in Value. Over three months, Value ETFs attracted $7.96B. This week, they shed $2.5B with a flow imbalance of just 23.2, among the lowest readings across all strategies. Growth ran the opposite way, taking in $2.8B this week with an imbalance of 75.1. Active management strategies kept building, adding $2.9B weekly on top of $158B quarterly. Vanilla passive index funds remained the single largest destination in both windows, pulling $27.1B this week. Retail attention for the Goldman Sachs S&P 500 Premium Income ETF (GPIX) spiked to 10 standard deviations above its own history in the week to 21 October, per Wikipedia page-view data, consistent with broader appetite for income-oriented passive equity products.

The overall tone is risk-on but selective: money is moving into equities and growth, rotating out of value and commodities, with China emerging as the week's clearest geographic conviction trade.