It started with performance. Now it’s manifesting in flows.

The reversal of the “US exceptionalism” trade in stocks just resulted in a stark flows juxtaposition which saw Europe-focused equity ETFs and mutual funds enjoying one of their largest weekly inflows in years (the rolling five-week haul’s the biggest since August of 2015) and US-focused funds their biggest weekly exodus of 2025.

Admittedly, “exodus” is a misnomer in the context of the outflow from US shares. A $2.5 billion net outflow hardly counts as a rush to the exits, and would’ve been mostly unremarkable on its own, but when set against yet another inflow to European stocks, you’re left to ponder a shift in the market’s thinking.

That’s an example of what Nomura’s Charlie McElligott describes as an inclination among investors to be long “fiscal expansionsists and easers,” which right now means Europe and China, and short “fiscal contractors,” which in the current context means the US.

Overall, global equities saw a $2.8 billion net outflow over the latest weekly reporting period. The breakdown was nearly $20 billion to ETFs and nearly $23 billion from mutual funds.

Do note: Equities (and US equities in particular) are still pacing for another banner year of inflows. Headed into this past week, US-focused funds were on track to record their second-largest inflow ever.

It’s worth noting that BofA’s private clients were adding equity exposure aggressively into the selloff. As the figure below shows, last week witnessed the third-largest inflow ever on that data series, a whopping 1.8% of AUM.

“Buy the dip reigns,” the bank’s Michael Hartnett remarked.

And yet, as Hartnett went on to point out, there was evidence of risk aversion too. For example, the bank’s clients extended duration, Hartnett said, with T-notes (as opposed to Bills) seeing their biggest inflow ever.

That flight to safety was mirrored in the EPFR data, which showed the biggest inflow to Treasurys since August.