Money Flows East as Tech ETFs Shed $1.8B

Active management pulled in $15.7B this week. That is the clearest signal in this week's ETF flow data: investors are paying for human stock-picking over passive index exposure at the fastest weekly rate this year.

Geography Flows: China and Japan Lead the Rush

China attracted $11B in net ETF inflows this week. Its flow imbalance score of 70.7 points to genuine buying pressure, not just gross turnover. Japan added another $6.9B, with a flow imbalance of 91.7. That near-perfect buying skew stands in sharp contrast to the three-month picture, where Japan sits in net outflow of $15.9B. The reversal is significant. Japan was the biggest geographic loser over three months but has now swung hard to the buy side.

The US remained the largest geography by net flow at $13.3B, broadly in line with its dominant market share. Taiwan added $2.4B. Global Ex-North America funds saw a flow imbalance of 99.6, effectively all buying and no selling, pulling in $4.1B. India, by contrast, bled $31.7M this week, consistent with its three-month outflow of $783M. October car registrations in India came in at just 85,038 units, the lowest October total on record since 2017, according to ORTEX Alt Data. Goods-vehicle registrations hit a new October low too. That real-economy weakness gives investors little reason to reverse course.

Brazil flipped to a net outflow of $904M this week. Over three months it had attracted nearly $4.9B. That is a meaningful trend break.

Sector Rotation: Tech Loses Ground, Financials Gain

Information Technology suffered the biggest sector outflow of the week, shedding $1.8B. The three-month picture tells a different story. IT had pulled in $2.7B over that period, making this week a sharp reversal. Financials moved in the opposite direction, attracting $1.3B this week. Over three months, however, Financials was the single worst-performing sector at minus $9.9B. The sector is bouncing but from a deeply negative base.

Health Care brought in $619M for the week and $3.2B over three months. That consistency makes it the most stable sector allocation in the current window. Consumer Staples lost $471M this week and has bled $725M over three months. Investors are clearly avoiding defensives.

RACE reports on 3 November. ORTEX Alt Data shows Austrian car registrations are running minus 75% on the same quarter last year, across all three months of the period. That dataset leads Ferrari revenue by 22 days.

Asset Class and Strategy: Bonds Hold, Active Surges

Equity ETFs took in $48.9B this week. Fixed Income followed with $16.2B. The bond flow imbalance of 65.3 is the highest it has been relative to its three-month reading, where fixed income pulled in $293B with a 69.5 imbalance. Both are healthy, but equity is accelerating relative to bonds at the margin.

Active strategy funds attracted $15.7B this week, a flow imbalance of 75.0. Over three months, active strategies have taken in $158.8B, second only to vanilla passive at $191.8B. The gap is narrowing fast. Value funds bled $2.1B this week despite posting $8.4B over three months. That is the sharpest one-week reversal across any strategy category. Dividend funds held firm at $2.0B.

The overall tone is risk-on but selectively so: investors are rotating away from US tech and defensive sectors, adding to Asian equities and active vehicles, and keeping fixed income flows steady rather than retreating to cash.