Money Flows East as Tech Bleeds

Japan dominated the week's geography story. ETFs focused on Japanese equities pulled in $6.9B over seven days. The flow imbalance hit 91.7, meaning almost all the gross activity was buying. That is a sharp reversal from the three-month trend, where Japan posted a $15.9B net outflow as domestic selling outweighed foreign demand. The 1w surge suggests fresh money is entering, likely drawn by the 67% year-on-year surge in Japan's foreign machine tool orders in September, per ORTEX Alt Data, which points to recovering industrial demand.

China added $11B over the week with a flow imbalance of 70.7, extending a trend that is broadly intact over three months ($35.7B net). The US retained top spot in absolute terms at $13.3B, but the balance figure of 57.1 shows a much more contested picture than either Japan or China.

India was a quiet outflow story. ETFs tied to India shed $31.7M in the week, with a flow imbalance of just 23.9 indicating heavy selling pressure. That sits alongside ORTEX Alt Data showing India new car registrations fell to 85,038 in October, the lowest October on record since 2017. Indian auto export unit sales also dropped 63% year-on-year. These are real-economy signals weighing on India-focused funds. M&M reports on 5 November, with India registration data running -82% on the same quarter last year after one of three months, suggesting pressure on Mahindra's revenue print.

Geography Flows

The clearest structural inflow was into Global Ex-North America ETFs. The 1w flow imbalance reached 99.6, essentially all buying, with $4.1B net. Over three months, that category had just $252M net. The gap is stark. Investors are actively diversifying away from North America-centric exposure right now.

Brazil flipped negative on the week at -$904M despite posting $4.9B net over three months. That is a meaningful reversal, with the flow imbalance dropping to 31.2. Latin America broadly echoed this, shedding $113M.

Sector Rotation

Technology suffered the biggest sectoral outflow of the week. IT ETFs lost $1.8B net, with $10.2B leaving against $8.4B entering. Over three months, IT had $2.7B net positive. That is a full reversal in a single week. Financials, which bled $9.9B over three months, bounced back with $1.3B net on the week. The flow imbalance rose to 63.9. Health Care added $619M this week. Over three months it was up $3.2B, making it one of the most consistent inflow sectors. Industrials were essentially flat on the week at $4M net, despite being a $1B net outflow sector over three months.

Consumer Staples shed $471M this week. That follows a $725M outflow over three months. The selling pressure in defensive staples is consistent, suggesting markets are not in full risk-off mode.

Asset Class and Strategy

Equities pulled in $48.9B in the week and $507B over three months. Fixed income added $16.2B this week, extending a $293B three-month trend. Both asset classes are in demand simultaneously. That is not a typical risk-off or risk-on signal but a broad reflation positioning.

Active management was the standout strategy story. Active ETFs attracted $15.7B this week, with a flow imbalance of 75. Over three months, active pulled in $158.8B. The gap between active and vanilla narrowed significantly on a proportional basis, suggesting investors are willing to pay for stock selection right now. Value ETFs flipped sharply: down $2.1B this week after a $8.4B net gain over three months. Growth continued attracting money at $1.8B for the week.

The overall tone is risk-on but geographically selective. Japan and China are the preferred destinations. Tech is being trimmed after a strong three-month run. Active managers are capturing flows at the expense of plain-vanilla index products.