China Surge Upends Week's Flow Picture

Equity ETFs dominated the week. A net $40B flowed into equity funds in the past seven days. That dwarfs every other asset class. Fixed income added $1.7B. Commodities pulled in $778M. Currency funds shed $483M, the only outright loser by asset class.

The single sharpest story of the week is China. ETFs tracking Chinese markets attracted $13.8B in net inflows over seven days. Flow imbalance hit 74.8, a strong buying signal. That compares with $44.4B over three months, so this week alone accounts for roughly 31% of the entire quarter's haul. The US drew the largest raw inflow at $15.4B, but its flow imbalance of 61.4 is notably softer than China's, suggesting more two-way traffic.

Geography Flows

Japan flipped sharply. Over three months it bled $16.2B, the worst outflow of any geography in that period. This week it pulled in $4.8B, with a flow imbalance of 86.7. That is the clearest reversal in the data. Taiwan added $4.5B on the week with an imbalance of 95.7, the second highest reading of any geography, pointing to near-unanimous buying pressure. Both recoveries look abrupt against their three-month trend.

South Korea is running the other way. It posted a $1.4B outflow this week, with a flow imbalance of only 32.2. Brazil shed $954M, with imbalance at just 20.7. India is also in modest outflow at $32M. All three have been struggling to hold traction over the full quarter as well.

Developed Europe was broadly flat. The region drew $102M net this week, with inflows and outflows nearly offsetting each other. The UK posted a small $42M outflow.

Sector Rotation

The clearest switch is in Financials and Technology. Financials pulled in $1.4B this week, the top sector by net inflow. Over three months, Financials was the worst sector in the data, losing $8.8B. That is a direct reversal. Technology ran the opposite pattern: $5.3B of three-month inflows, but a $1.7B outflow this week, the only sector with a nine-figure net loss. The imbalance for Tech dropped to 45.0, just below the neutral line.

Health Care added $1.2B on the week, consistent with its three-month trend of $3.8B. Communication Services took in $514M. Industrials was modestly positive this week at $127M, though it was in outflow over three months at $1.1B. Materials reversed from mild three-month inflows to a $352M outflow this week.

Consumer Staples collected $312M this week. Over three months it was down $605M, so this week marks a small but distinct shift toward defensives.

Asset Class and Strategy

Fixed income added $285.8B over three months, 55% of equity flows in that window. The pace slowed to $1.7B this week. That compression may reflect less urgency to extend duration at current levels.

Active ETFs showed sustained demand. They drew $157.9B over three months and $2.8B this week, a flow imbalance of 60.8. Growth strategies attracted $2.3B this week against a three-month total of $19.1B. Dividend strategies added $1.7B this week, with a high imbalance of 79.9, suggesting consistent buying. Momentum funds reversed sharply: a three-month outflow of $3.9B follows modest weekly buying, flagging continued positioning against trend-following strategies.

The overall tone is risk-on, with equities leading and buyers rotating from Tech into Financials, Health Care, and defensives, while China and Japan's one-week turnarounds challenge the three-month narrative.