China and Bonds Drive Global ETF Flows

China ETFs led all geographies this week. They pulled in a net $17.9B, the strongest single-country reading across the board, with a flow imbalance of 78.7. That is a decisive tilt toward buying. Over three months, China absorbed $36.3B. The direction is consistent, but the pace has nearly halved. Investors are still adding, just more selectively.

Japan is the sharpest reversal in the data. It attracted $5.7B over one week, flow imbalance of 91.2, near-total buying pressure. Over three months, Japan bled $15.3B. That is a clean trend break. Something shifted in the past week to bring buyers back after a prolonged exit. US ETFs added $10B over the week. Their three-month total of $269B confirms they remain the dominant destination by sheer volume.

South Korea stood out as the week's biggest loser. It lost $4.2B, with a flow imbalance of just 18.3. Sellers are in full control. Over three months, Korea was actually a small net recipient. This week's move looks like a sharp reversal.

Geography Flows

China, Japan, and the US gathered the bulk of inflows. Taiwan added $1.9B this week and $17.4B over three months, making it one of the most consistently bid regions of the quarter. Global Ex-US funds took in $1.1B this week, with a 93.8 imbalance score, suggesting almost no selling at all. Europe drew barely $12.6M net, effectively flat. Germany was a small net outflow both this week and over three months, a backdrop consistent with the country's September unemployment rate hitting 4.1%, its highest September reading in ten years according to ORTEX alternative data. Italy also saw unemployment rise to 6.3% in September, a two-year high.

Sector Rotation

Tech leads sector inflows this week at $940M, but the imbalance score is just 53.5. Buying is thin. Financials added $701M and Industrials $531M. Over three months the picture flips sharply for Financials: a net outflow of $11.1B, the worst sector reading in the quarter. Industrials also reversed, going from a $652M three-month outflow to a $531M weekly inflow. That is a notable rotation back into cyclicals. Health Care saw a $151M weekly outflow but collected $2.6B over three months. Materials lost $270M this week after positive three-month flows. Consumer Staples and Utilities both bled modest sums on the week and carry no strong conviction either way.

Asset Class and Strategy

Equity ETFs pulled in $38.1B this week. Fixed Income added $14.9B, with a flow imbalance of 65.1, reflecting genuine buying pressure rather than just a lack of sellers. Over three months, fixed income gathered $299B against equity's $504B. Both are firmly in demand. Commodities reversed: a three-month inflow of $33.2B shrank to a $130M outflow this week. Alternatives held steady with positive flows in both windows. On strategy, Vanilla passive funds led with $27.1B this week. Growth strategies took in $2.8B but Value lost $2.5B. Over three months, Value was a net positive at $7.9B. That is another reversal: value was working over the quarter but money is rotating to growth this week. Active funds added $2.9B weekly and $158B over three months, the strongest three-month active-strategy reading in the data. That trend is intact. Dividend strategies collected $589M this week, consistent with their $11.2B quarterly total.

The overall tone is risk-on at the margin. Buyers are returning to equities, bonds are drawing steady inflows, and the week's sharp moves into Japan and out of South Korea suggest active geographic rotation rather than broad retreat.