For the first time in eight weeks, global equity flows also turned negative, with overall redemptions of nearly $7 billion. Elara said the outflows were largely driven by sizeable withdrawals from China and Japan, along with continued pressure in Europe. The previous instance of net global equity outflows was during the peak of the Iran war in March.
“EMs continue to remain under pressure, with the 7th week of redemptions led by domestic selling in China and persistent foreign outflows from India,” the report said.Global Emerging Market (GEM) funds also recorded a fourth straight week of outflows for the first time since March 2025, taking cumulative redemptions to $4.2 billion. According to Elara, this signals a “meaningful slowdown in EM risk appetite”.
The report’s biggest takeaway is that the broad-based AI trade that supported flows across multiple markets over the past year is now becoming increasingly concentrated in the US.“Liquidity continues to concentrate into a much narrower set of opportunities,” Elara said. “The broad-based AI trade that began in Jun’25 is increasingly becoming a US-centric AI trade.”
Elara also flagged what it called the “first visible crack” in the leadership markets of the AI cycle. South Korea’s 10-week rolling foreign flows have turned negative for the first time since June 2025, while Taiwan and Brazil are witnessing their weakest flows since the AI-driven rally began.
“While these are still early signals, the regions that led global performance over the past year are no longer seeing the same intensity of capital inflows,” the report said.
The same trend is now spreading across commodities and precious metals. Precious metal funds saw another $1.1 billion of outflows this week. Silver was the first to lose momentum in January 2026, followed by gold since March 2026, according to the report.
Commodity equity funds have now seen cumulative redemptions of $9.6 billion since March, while energy equity funds witnessed a seven-week outflow of $1.4 billion, their second-largest redemption since April 2025.
“Taken together, several themes that benefited from the AI and electrification trade — S.Korea, Taiwan, Brazil, Silver, Gold, Commodities and Energy — are now witnessing slowing or negative flow. The only segment with strong flows is US Tech, Industrials and Semiconductor,” Elara added.
