Global Equity ETFs See 17th Consecutive Week of Net Inflows, While Taiwan Stocks Face $1.454 Billion Foreign Outflow

The 'Super Central Bank Week' and 'Super Earnings Week' coincide this week, amid Middle East geopolitical tensions and U.S. tariff policy disruptions, causing global stock markets to pull back from highs with increased volatility. Taiwan and Asian equities showed divergent performance, with Taiwan stocks continuing to face pressure and suffering a net foreign outflow of $1.454 billion last week, while Asian markets saw mixed fund flows. Amid concerns over AI development and profit-taking in tech stocks, markets are scrutinizing the Federal Reserve's policy guidance and big tech earnings, focusing on whether AI investments can 'monetize' into tangible revenue and profit growth.

Global stock markets have recently faced multiple challenges, including fluctuating Middle East tensions, deleveraging in semiconductor stocks, and doubts over AI advancement, leading to significantly wider market swings since July.

Franklin Templeton Investment Advisors指出 that although historical trends show the third quarter is traditionally a slow season for equities, and the first half has already seen substantial gains, short-term volatility does not alter the AI-driven bullish economic cycle. They recommend conservative investors move beyond traditional bond thinking and adopt U.S. balanced funds as a core strategy to capture diversified income. Aggressive investors can leverage emerging market balanced funds to participate in Asia's AI supply chain and high-yield local debt themes, seizing rotation opportunities through multiple avenues.

In terms of fund flows and ETF performance, global equity ETFs attracted $25.276 billion in net inflows, marking 17 consecutive weeks of net inflows. Asian markets received $8.027 billion in net inflows, including $4.218 billion into China; U.S. markets attracted $5.543 billion; Japan, Europe, and Latin America received $734 million, $257 million, and $119 million respectively.

By sector, the top three net inflow sectors over the past week were Energy ($447 million), Thematic ($213 million), and Utilities ($201 million). The top three net outflow sectors were Technology ($4.328 billion), Real Estate ($1.757 billion), and Communications ($1.319 billion).

Examining foreign investor activity in Asian equities, positioning was mixed. Taiwan's market continued to face foreign selling pressure, with a net outflow of $1.454 billion last week, while Indonesia, Vietnam, Malaysia, and the Philippines also saw net outflows. In contrast, South Korea's market received $1.556 billion in net inflows, and India and Thailand also attracted foreign buying.

In bond market dynamics, fixed-income ETFs still attracted $7.838 billion in net inflows last week, driven by geopolitical tensions and rising oil prices. U.S. bond markets drew $5.479 billion in net inflows, Asian bond markets received $127 million, while European bond markets saw $184 million in net outflows. By credit quality, investment-grade bonds attracted $4.748 billion in net inflows, while high-yield (non-investment grade) bonds saw $1.087 billion in net outflows, indicating investors continue to seek high-quality defensive allocations amid market volatility.