China Tops Weekly ETF Flows as Tech Faces Selling

China overtook the US as the top destination for ETF money this week. China-focused funds pulled in $11.1B net over seven days. The US attracted $10.0B. Japan saw the biggest shift of all three months: it was an outflow story over the quarter, losing $15.3B net in the 3m window, but flipped to a $6.5B weekly inflow with a flow imbalance of 91.9, the highest of any major geography. That reversal is the sharpest trend break in the data.

Geography Flows

The weekly picture is broadly risk-on across Asia. Taiwan drew $2.4B net. South Korea added $1.8B. Canada contributed $1.2B. Brazil was the notable laggard, posting a $871M outflow this week against a $5.0B gain over three months, suggesting some short-term profit-taking after a strong quarter. India flipped negative too: down $29M on the week after a $780M net outflow over three months, leaving it as a persistent underperformer in the region. Israel remained under pressure, losing $286M this week after a $560M three-month outflow.

The Global Ex-North America bucket posted a 99.6 imbalance, meaning almost every dollar was inflow, with $4.1B net. Developed Markets Ex-US attracted $1.1B. The money flowing into non-US developed markets marks a clear diversification away from pure US exposure.

Sector Rotation

The biggest sector story is a sharp reversal in Tech. Information Technology was the worst sector over the past week, posting a $1.2B net outflow despite $7.8B of gross inflows. Yet over three months, Tech held a $3.1B net positive. Short-term sellers are overcoming buyers for the first time in the quarter.

Financials flipped the other way. The sector drew $1.1B net this week. Over three months it was the worst sector, down $10.1B. That is a significant reversal worth watching. Health Care stayed consistently positive: $719M this week, $3.3B over three months. Consumer Staples continued to bleed, losing $443M on the week after $996M over three months. Industrials turned barely positive this week at $104M, but three-month flows remain in the red at minus $778M.

Asset Class and Strategy

Equity dominated asset class flows at $44.6B net for the week. Fixed income added $12.4B. Both maintained strong imbalance scores above 63, consistent with the three-month trend where equity led with $506B and fixed income followed with $301B. Commodities were marginally positive this week at $354M. Currency funds turned slightly negative, losing $15M.

On strategy, the clearest weekly signal is the collapse in Value flows. Value funds shed $2.5B this week, a sharp turn from a $8.4B three-month gain. Active strategies continued to attract money strongly, taking in $14.6B on the week with a 75.2 imbalance score. That builds on $159B of net active inflows over the quarter. Growth collected $1.5B. ESG was nearly flat at minus $11M after three months of $9.6B inflows. Momentum funds flipped from a $4.1B three-month outflow and held close to flat this week, offering no clear signal.

The overall tone is cautiously risk-on. Buyers dominate equities and bonds alike. The sharpest story is the rotation out of Tech and Value in favour of Financials, active strategies, and Asian markets outside India.