US and China Lead the Week's Big Money Push

The dominant story this week is a sharp surge in equity buying. ETF equity funds pulled in a net $64.6B in the past seven days. That is the biggest flow by asset class by a wide margin. The tone is unambiguously risk-on.

Geography Flows

The US absorbed $36.6B in net inflows this week, with a flow imbalance of 68.8. That means buying pressure is comfortably above the neutral mark of 50. But the most striking geographic story is China. Chinese ETFs attracted $29.6B net in just one week, with a flow imbalance of 84.1. That is aggressive buying pressure. Taiwan added another $5.7B, and South Korea brought in $3.0B. Asian markets collectively dominated the geographic flow picture.

Over three months, US funds lead with $290.6B net. China's $66.7B over the same period shows the weekly pace is running well ahead of the quarterly trend. That acceleration matters.

Japan stands out as a reversal. Over three months it posted a $22.0B net outflow, the only major geography in the red over that horizon. This week it swung to a modest $1.5B inflow. That may reflect short covering rather than fresh conviction. ORTEX's alternative data flags that Japan's new car sales in October were the weakest for that month in three years, which does little to support a fundamental case for the turnaround.

Developed Markets ex-US attracted $1.5B this week with a flow imbalance of 97.9, meaning almost every dollar was an inflow. The broader emerging markets bucket turned net negative this week, losing $1.2B, a soft reversal from positive 3-month flows of $10.7B.

Sector Rotation

Information Technology topped sector flows this week with $2.7B net. Its flow imbalance of 59.3 is mild though, suggesting buyers have not fully committed. Health Care brought in $503M. Financials added $592M on the week.

The sharpest divergence sits in Industrials. Over three months, Industrials was the second-largest sector in flow terms, but this week it posted a net outflow of $853M with a flow imbalance of just 29.6. That is a clear rotation away from the sector in the near term. Materials also shed $494M this week.

The three-month picture for Financials is the starkest divergence of all. Financials lost $9.5B net over three months, the worst sector reading in the period. Yet this week it turned to a $592M net inflow. Whether that is a genuine rotation back into banks and insurers or simply mean reversion remains to be seen.

Energy attracted modest buying on both timeframes: $203M this week, $2.8B over three months.

Asset Class and Strategy

Fixed income pulled in $2.8B this week, far behind equity but still positive. Over three months fixed income attracted $282.8B, more than half the equity total of $532.6B. Bond appetite is durable. Commodities slipped to a small outflow of $205M this week, though the three-month picture shows $32.2B of net buying. Currency ETFs bled $1.5B this week.

On strategy, Vanilla passive funds dominated with $51.4B net this week. Growth strategies brought in $3.6B, with a flow imbalance of 78.7. Value strategies added $962M. The key shift from three months to this week: Dividends flipped from a healthy $9.5B net inflow over three months to a $1.4B net outflow this week. Active strategies are essentially flat on the week despite $153B in net inflows over three months. The active trend is intact but paused.

The overall picture is risk-on. Equities dominate, China is attracting unusually strong buying relative to its quarterly run rate, and defensives such as Utilities and Dividends are losing ground in the near term.