This week's global ETF fund flow data reveals a critical trend inflection point: a retreat of risk aversion and the initiation of a structural offensive market. The shift in fund flows reflects a repricing of market risk preferences.
The elephant dances: the larger the U.S. stocks, the stronger they become.
From the perspective of fund inflows, U.S. large-cap ETFs attracted $6.83 billion, U.S. mid-cap ETFs saw inflows of $1.86 billion, and global broad-based ETFs also experienced a net inflow of $1.64 billion. Funds are concentrating on AI, technology, and manufacturing, while small-cap stocks are still showing a trend of capital outflows, indicating that the current market is still dominated by large-cap stocks and has not yet fully spread to small-cap stocks.
Thematic rotation: AI remains strong, with 'narrative-driven' capital inflows.
This week, thematic ETFs saw a net inflow of $1.11 billion, focusing on sectors such as AI applications, energy transition, defense and military industry, space technology, and robotics. The market favors sectors with long-term development prospects rather than a collection of dispersed speculative concepts.
Bond rebound: high-yield bonds become the new favorite.
Net inflow of funds in the high-yield bond sector increased by $1.47 billion, net inflow in comprehensive bonds increased by $1.07 billion, and net inflow in investment-grade bonds increased by $570 million. Meanwhile, government bonds saw an outflow of $540 million, and TIPS (Treasury Inflation-Protected Securities) experienced an outflow of $50 million. Economic expectations have recovered and credit spreads have compressed, allowing high-yield bonds to offer both income protection and rebound potential.
Gold collapse: safe-haven funds are squeezed out by AI.
The gold and precious metals ETF experienced a net outflow of $2.2 billion in a single week, reaching a year-to-date high. This is driven by three main reasons: stability in U.S. Treasury yields, cooling inflation trades; the realization of dovish expectations from the Federal Reserve; and more attractive returns from AI and technology. This is not a short-term fluctuation but a systemic repricing.
Operational suggestion: precise targeting rather than blindly casting a wide net.
Investors can reallocate towards U.S. tech stocks, especially mid-cap and global broad-based stocks; replace long-term government bonds with high-yield bonds; track the rhythm of thematic ETFs related to AI, military industry, and energy transition; and avoid speculating on short-term rebounds in gold. Funds are focusing on the 'core winners,' and investors need to seize this trend.
The market has shifted from defense to structural offense, with funds already indicating the direction through action. Has your chosen investment direction also embarked on this 'return path' of capital migration?
