U.S. equity inflows accelerated, while demand for risk assets remained resilient

Overview

The report uses ETF, mutual fund, and regional investor trading data to track high-frequency cross-border capital flows on a weekly basis as of early August 2026. The key change is a clear acceleration in foreign net inflows into U.S. equity funds, continued strong net inflows into emerging market ETFs, and simultaneous increases in South Korean retail investors' allocations to U.S. equities and bonds; meanwhile, U.S. bond funds and Taiwan USD bond ETFs still saw modest outflows.

Core views

The structure of fund flows shows that short-term risk appetite is relatively positive, with new capital mainly flowing into U.S. equities and emerging market assets. Weekly inflows into U.S. equity funds increased markedly from the previous week, emerging market equity and bond funds both achieved net inflows, and South Korean retail investors also expanded their purchases of U.S. assets. However, bond demand is regionally divergent: U.S.-focused bond funds shifted from net inflows to modest net outflows, while Taiwan investors continued to reduce holdings of USD bond ETFs.

Analysis framework

The report uses high-frequency fund-flow proxy indicators, aggregating data on U.S.-focused ETFs and mutual funds listed or registered in non-U.S. markets, emerging market ETFs listed outside emerging markets, Korea Securities Depository data, and Taiwan Exchange-listed USD bond ETF data, and compares the latest five trading days with the prior five trading days and monthly data. Data sources include Bloomberg, KSD, and Nomura.

Methodology notes

• Fund-flow analysisHigh-frequency cross-border fund-flow monitoring

  Measures short-term cross-border allocation direction through fund subscriptions/redemptions and investors' net buying/selling.

  The proxy indicators for U.S. equity and bond flows assume that U.S.-focused funds listed or registered in non-U.S. markets are mainly held by non-U.S. retail and institutional investors.

• Fund-flow analysisEmerging market foreign-flow proxy

  Estimates changes in foreign investors' allocations through emerging market funds listed outside emerging markets.

  This method assumes that emerging market-focused funds listed outside emerging markets are mainly held by foreign investors, so their fund flows can serve as a proxy for foreign risk appetite.

• Comparative analysisWeekly and monthly sequential comparison

  Compares the latest five trading days with the prior five trading days and full-month periods.

  The latest data for U.S. funds, emerging market ETFs, and Taiwan investors is as of August 7, while South Korean retail investor data is as of August 10; the previous week refers to the five trading days before the latest week.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• U.S. equities and related funds

  Direct beneficiary

  Strengths

  Weekly foreign net inflows rose significantly, and South Korean retail investors' net purchases of U.S. equities also strengthened.

  Weaknesses

  Current evidence mainly comes from one week of high-frequency fund flows and has not yet proven that the trend can be sustained.

  Comparison

  Weekly net inflows were about USD4.3bn, higher than USD2.8bn in the previous week.

  Risks

  Market corrections, a reversal in risk appetite, valuation pressure, and USD exchange-rate volatility could cause flows to reverse quickly.

• Emerging market ETFs

  Positive

  Strengths

  Both equity and bond subcategories received net inflows, with a relatively balanced source structure of funds.

  Weaknesses

  Total weekly inflows declined slightly from the previous week.

  Comparison

  Net inflows in the latest week were USD1.9bn, compared with USD2.2bn in the previous week.

  Risks

  A stronger USD, rising global interest rates, geopolitical risks, and divergence in emerging market fundamentals could weaken fund flows.

• U.S. bonds and related funds

  Neutral to slightly weak

  Strengths

  South Korean retail investors still net bought USD454mn of U.S. bonds, indicating that investment demand exists in some regions.

  Weaknesses

  Foreign flows into U.S.-focused bond funds shifted from net inflows to modest net outflows.

  Comparison

  Net outflows in the latest week were USD81mn, compared with net inflows of USD342mn in the previous week.

  Risks

  Changes in rate expectations, term premia, and FX hedging costs may continue to suppress demand.

• Taiwan-listed USD bond ETFs

  Negative but marginally improving

  Strengths

  The scale of net outflows narrowed significantly from the previous week.

  Weaknesses

  Investors remain in a net-selling position and net inflows have not yet resumed.

  Comparison

  Net outflows in the latest week were USD139mn, versus net outflows of USD394mn in the previous week.

  Risks

  USD bond yields, FX volatility, and local investor redemption pressure may prolong outflows.

Key data

• Total net inflows into U.S.-focused fundsUSD4.3bnFrom August 1 to 7, versus about USD3.2bn in the previous week.
• Net inflows into U.S.-focused equity fundsUSD4.3bnFrom August 1 to 7, versus USD2.8bn in the previous week; USD12.1bn for the full month of July.
• Net flows into U.S.-focused bond funds-USD81mnA modest net outflow from August 1 to 7, compared with net inflows of USD342mn in the previous week.
• Net inflows into emerging market ETFsUSD1.9bnFrom August 1 to 7, versus USD2.2bn in the previous week; including USD1.5bn in equity funds and USD462mn in bond funds.
• South Korean retail investors' net purchases of U.S. assetsUSD1.6bnFrom August 4 to 10, including USD1.1bn of U.S. equities and USD454mn of U.S. bonds; the previous week's total was USD1.3bn.
• Net flows into Taiwan USD bond ETFs-USD139mnContinued net outflows from August 1 to 7, but significantly narrower than -USD394mn in the previous week.

Impact & implications

Accelerating inflows into U.S. equity funds and increased purchases of U.S. assets by South Korean retail investors together indicate strengthening short-term global investor demand for U.S. risk assets; simultaneous inflows into emerging market equity and bond funds also suggest that risk appetite is not limited to the U.S. market. If fund flows persist, they could provide marginal support for U.S. equities and emerging market assets. However, U.S. bond funds turning to net outflows shows that demand for rate assets remains fragile and is not yet sufficient to form a broad cross-asset bullish signal.

Risks

• Fund-flow proxy indicators depend on assumptions about investor composition and may not fully identify the nationality of end investors or their true allocation motives.
• The latest data covers only five trading days and may be affected by month-start rebalancing, one-off subscriptions/redemptions, and short-term market volatility.
• Some month-to-date data in the original text contains inconsistencies in signs or comparative wording, such as U.S. bond month-to-date flows and emerging market month-to-date flows compared with July; users should verify against the underlying data.
• Fund inflows are not equivalent to future returns, and historical fund flows and historical performance cannot reliably predict subsequent market trends.
• Exchange rates, global interest rates, policy expectations, and geopolitical changes could quickly reverse the direction of cross-border flows.

What to watch

• Whether net inflows into U.S. equity funds can be sustained for several consecutive weeks rather than merely reflecting short-term month-start rebalancing.
• Whether U.S. bond funds can shift from modest net outflows back to stable net inflows.
• Whether inflows into emerging market ETFs continue to be jointly driven by both equities and bonds.
• Whether South Korean retail investors' buying intensity for U.S. equities and bonds continues.
• Whether outflows from Taiwan USD bond ETFs narrow further and eventually turn positive.
• The impact of changes in the USD and U.S. Treasury yields on cross-border asset allocation.