Money Flows East as Tech ETFs Bleed

China and Japan led global ETF inflows this week. Meanwhile, Information Technology suffered its largest sector outflow while active management pulled in money at pace. The overall tone is cautiously risk-on, but with clear rotation away from last quarter's winners.

Geography: Asia Dominates, Brazil Bleeds

The week's standout story is Asia. China ETFs attracted $10.5B in net inflows. Japan added $4.4B, with a flow imbalance of 89.4, meaning buying pressure was near-one-directional. Taiwan pulled in $3.7B more. All three figures dwarf their three-month run rates on a per-week basis.

Japan is the sharpest reversal. Over three months, Japan ETFs bled $15.9B net. This week they swung to a $4.4B inflow. The turnaround coincides with Japan numerically controlled machine tool orders jumping 59% year-on-year in September, per ORTEX alt data, with the order backlog up 50% over the same period. That kind of industrial output signal may be feeding renewed institutional appetite.

India tells the opposite story. Three-month flows were already a net negative at $797M out. This week added another $24M in outflows, with a flow imbalance of just 26. Despite domestic auto unit sales rising 24% year-on-year in October, per ORTEX alt data, ETF money has not followed.

Brazil saw $1.2B leave in a single week, with a flow imbalance of 20.4. That is heavy selling pressure. Over three months, Brazil was actually positive at $4.8B in. The reversal is abrupt.

The US remained the largest single destination in absolute terms at $11.5B net, but its flow imbalance of 58.5 signals a market that is contested rather than dominated by buyers.

Sector Rotation: Tech Sold Hard, Financials and Health Care Bid

Information Technology recorded a $4.2B net outflow this week. That is the biggest single-sector drawdown, with a flow imbalance of 35.6. Gross outflows reached $9.3B. Over three months, IT was a modest net positive at $2.7B. The gap between the two periods points to a sharp reversal in sentiment this week.

Financials flipped the other way. This week saw $1.7B of net inflows and a flow imbalance of 70.5. Yet over three months, Financials was the worst-performing sector at $9.7B net out. That makes this week's buying the first clear sign of a potential bottom in financial sector flows.

Health Care took in $1.1B this week. Over three months it was positive too at $3.1B. It is the most consistent sector for inflows across both windows.

Industrials drew a modest $324M this week. Over three months the sector saw $935M net outflows. The change in direction is small but present.

Asset Class and Strategy: Bonds Bid, Active Surges

Equity ETFs led with $38.9B net this week. Fixed income added $8.0B. Both are positive, which points to broad risk appetite rather than a flight to safety.

Over three months, the fixed income story is proportionally larger: $291B net into bonds versus $514B into equities. Bonds are keeping pace with equities in a way that suggests institutional hedging alongside equity exposure.

Active management took in $7.4B this week against vanilla passive at $16.1B. Over three months, active gathered $159B versus $196B for vanilla. Active's share of flows is growing. Growth strategies pulled in $2.4B this week. Value ETFs shed $1.9B, with a flow imbalance of just 29. Over three months, value was actually positive at $8.5B. The weekly reversal into growth over value is notable.

Dividend strategies gathered $1.9B this week, with an imbalance of 82. That combination of growth and dividend buying alongside value selling suggests investors want quality and earnings visibility, not cheap cyclicals.

The overall tone this week is risk-on but selective: Asia over LatAm, healthcare and financials over tech, active over passive, and growth over value.