The “Superpower Sell-off” has officially begun.
According to BofA Global Research, global equity funds just witnessed their largest weekly outflow on record ($43.2 billion). But the headline number hides a critical rotation: investors are aggressively pulling capital from the U.S. and China while piling into Europe and Japan.
🌏 THE REGIONAL BREAKDOWN:
- 🇨🇳 China: A staggering $49.2 billion outflow (record). BofA attributes this to selling by the “National Team” (state-backed investors) as regulators move to cool down an overheating market.
- 🇺🇸 United States: $16.8 billion outflow. The “Sell America” trade is reviving amidst renewed tariff threats and geopolitical friction over the Greenland dispute.
- 🇪🇺 Europe: Recorded its 6th straight week of inflows, as allocators seek value away from the geopolitical noise.
- 🇯🇵 Japan: Saw a $2.2 billion inflow, the largest since October 2025.
🔄 THE NARRATIVE SHIFT: This is a story of diversification. While the U.S. and China are grappling with policy uncertainty (tariffs in the West, regulatory cooling in the East), Fixed Income remains a safe haven ($15.4 billion inflows). Interestingly, broadly defined Emerging Market funds also saw their 4th consecutive week of inflows, suggesting investors are picking their spots carefully rather than abandoning risk entirely.
💡 ANALYST TAKEAWAY: Smart money is de-risking from the “bi-polar” world order. When the two largest economies become the primary sources of volatility, capital flows to the “quiet middle.” The continued bid for Europe and Japan suggests that global allocators are no longer comfortable with concentrated exposure to the US Dollar or Chinese regulation—they are finally broadening the map.
👇 CIOs: Is this a tactical pause in the US bull market, or the beginning of a structural rotation into International Developed Markets?