China Surge Leads Risk-On Week

The week's dominant story is China. ETFs tracking Chinese equities pulled in $29.6B in the past week alone. That is the second-largest geographic inflow behind the US ($36.6B), but China's flow imbalance hit 84.1 versus the US's 68.8. Buying pressure in China is intense. Over three months, China has gathered $66.7B, confirming this is a sustained bid rather than a one-week spike.

Geography: Asia Dominates Inflows

The US remains the largest absolute draw at $36.6B for the week. China at $29.6B, Taiwan at $5.7B, and South Korea at $3.0B fill out the top four. All four show strong buying pressure with flow imbalances above 67.

Japan is the standout reversal. Over three months, Japan saw a net outflow of $22.0B with a flow imbalance of just 45.9. This week it bounced to a $1.5B inflow, though the broader trend remains negative. The three-month number flags a structural withdrawal from Japanese equities that one week's uptick has not reversed.

Broad Emerging Markets as a bucket turned negative this week with a $1.2B outflow and a flow imbalance of 37.4. That compares with $10.7B of net inflows over three months. Money is rotating within emerging markets toward individual country funds, particularly China and Taiwan, rather than broad EM vehicles.

Global Ex-North America suffered a $2.9B outflow this week with a near-zero flow imbalance of 0.5, meaning almost nothing flowed in. That is consistent with its three-month pattern of $2.6B out.

Sector Rotation: Tech Leads, Industrials Shed

Information Technology attracted $2.7B in the week, the top sector by net flow. The imbalance of 59.3 is moderate. Over three months, Tech still leads with $11.1B but its imbalance compressed to 52.3, suggesting the pace is slowing at the margin.

Industrials shifted sharply negative this week at minus $853M with a flow imbalance of 29.6. That follows a three-month outflow of $2.9B. Sellers are consistent here. Financials flipped the opposite way: minus $9.5B over three months but $592M positive this week. That is a credible short-term reversal worth watching.

Health Care held steady on both timeframes: $503M inflow for the week and $2.96B over three months. Materials and Utilities both bled this week.

Asset Class and Strategy: Equities Win, Bonds Hold

Equities dominated at $64.6B for the week. Fixed Income added $2.8B, well behind. Over three months, the picture is more balanced: equities at $532.6B but fixed income at $282.8B, the latter running at a 68.5 flow imbalance. Bond buying has been consistent and broadening even as equities take the headline flows.

Commodities reversed course. Over three months they attracted $32.2B with a 65.7 imbalance. This week they slipped $205M into the red. Currency ETFs posted a sharp $1.5B weekly outflow after three months of steady $6.4B inflows.

On strategy, Vanilla passive funds took $51.4B this week. Growth strategies attracted $3.6B at a flow imbalance of 78.7. Dividends suffered a $1.4B weekly outflow. Over three months, Active funds pulled in $153B with a 69.8 imbalance, the clearest trend in the strategy data. Investors are increasingly choosing active management over passive in a volatile environment.

The overall tone is risk-on. Equities dominate flows, growth beats dividends this week, and the China bid shows no sign of fatigue.