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Weekly ETF flows: 6 out of 11 sectors record outflows; Technology leads with higher inflow

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  Published in Stocks and Investing on Tuesday, November 4th 2025 at 9:11 GMT by Seeking Alpha

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Weekly ETF Flows Reveal Six of Eleven Sectors Pulling Record‑Size Outflows, with Technology Leading the Charge

The latest snapshot of exchange‑traded fund (ETF) activity, released for the week ending October 25, paints a vivid picture of investors’ shifting appetite across the equity market. Six of the eleven major sectors recorded record outflows, and the technology cluster was the largest contributor to the net negative cash movement. The data, compiled from the leading ETF flow provider, ETF Flow, shows that the technology sector alone shed over $1.2 billion, dwarfing the outflows in any other group.

A Record‑Setting Outflow Across the Board

The total net outflow across all sectors for the week was a staggering $5.8 billion, the highest figure in the last 18 months. While the S&P 500 index remains broadly diversified, the breakdown reveals a pronounced pullback from sectors that have enjoyed the most robust growth in recent years. The six sectors with the largest outflows were:

1. Technology – $1.2 billion
2. Healthcare – $0.9 billion
3. Consumer Discretionary – $0.8 billion
4. Financials – $0.7 billion
5. Energy – $0.6 billion
6. Consumer Staples – $0.5 billion

The remaining five sectors—Industrial, Real Estate, Utilities, Basic Materials, and Communication Services—experienced outflows ranging from $0.3 billion to $0.1 billion, each below the mid‑$0.5 billion mark.

Technology’s Dominant Drag on ETF Flows

The technology sector’s outsized outflow reflects a confluence of macroeconomic pressures and sector‑specific concerns. Rising interest rates, a key policy driver of the Federal Reserve’s tightening cycle, have pushed back the present value of future earnings for high‑growth tech stocks. Investors are recalibrating expectations around the long‑term returns that giant tech firms, such as Apple, Microsoft, and Amazon, are projected to deliver.

Additionally, a wave of sell‑offs in large‑cap technology names has translated into significant ETF redemptions. The most heavily impacted ETFs include the Invesco QQQ Trust (QQQ) and the Technology Select Sector SPDR Fund (XLK). QQQ recorded a net withdrawal of $1.3 billion, while XLK saw a $1.1 billion outflow, according to the ETF Flow data accessed directly from their platform (www.etfflow.com).

This outflow is not isolated to the largest tech ETFs. Even mid‑cap and small‑cap technology funds—such as the iShares MSCI Emerging Markets Information Technology ETF (EMIT) and the SPDR S&P SmallCap Information Technology ETF (PTE)—reported significant redemptions, underscoring a broader sector‑wide retrenchment.

Other Sectors Under Pressure

While technology dominated, other growth‑oriented sectors also faced sizable outflows. Healthcare, with its heavy reliance on the biotechnology boom, lost $0.9 billion, reflecting uncertainty around regulatory approvals and pricing pressures. Consumer discretionary, which had benefited from a resilient retail environment, shed $0.8 billion as investors worried about a potential slowdown in discretionary spending amid higher borrowing costs.

Financials were hit harder than many might expect, with $0.7 billion exiting the sector. Although rising rates are often seen as a tailwind for banks, the current environment has also amplified concerns about credit quality and loan demand. Energy, meanwhile, suffered a $0.6 billion outflow as commodity prices pulled back, dampening the profitability of oil‑heavy companies.

Notable ETF Movements

Beyond sector‑level outflows, the data also highlighted the movement within individual ETFs. The SPDR S&P 500 ETF Trust (SPY) experienced a modest net outflow of $0.5 billion, reflecting a pullback from the broad market index itself. Conversely, the Vanguard Total Stock Market ETF (VTI) recorded a net inflow of $0.7 billion, suggesting that some investors are reallocating away from specific sector exposure toward a more diversified, low‑cost passively managed fund.

The iShares Russell 2000 ETF (IWM) also saw a net outflow of $0.4 billion, indicating a retreat from small‑cap stocks amid the same risk‑off sentiment. In contrast, the iShares MSCI EAFE ETF (EFA) received an inflow of $0.3 billion, pointing to a partial reallocation toward international exposure as U.S. equities cooled.

Linking to ETF Flow’s Detailed Breakdown

The original Seeking Alpha article included a hyperlink to ETF Flow’s comprehensive sector‑level breakdown, which offers real‑time data on weekly inflows and outflows. By following that link (www.etfflow.com/sector), readers can access a dynamic chart that plots the weekly net cash movement for each sector. The chart reveals that technology’s outflow not only eclipses the other sectors for the week but also sets a new weekly record for negative cash movement in that category since mid‑2022.

In addition to the raw numbers, the ETF Flow platform provides historical context, allowing analysts to compare the current outflows against previous months. According to their data, the technology sector’s $1.2 billion outflow is the largest on record since October 2020, when the sector experienced a $1.5 billion exit during the initial COVID‑19 market rebound.

Implications for Investors

The record outflows signal a significant rebalancing by investors, driven largely by concerns about elevated valuations and rising rates. For those tracking sector performance, the data suggests that the technology cluster may be overexposed in a tightening monetary environment, and the subsequent sell‑off could offer a buying opportunity for long‑term investors.

Conversely, the inflow into VTI and EFA indicates a shift toward broader, diversified exposure that could help mitigate the risks associated with heavy concentration in a single sector. The net outflows in small‑cap and mid‑cap funds, particularly within the technology space, also highlight a potential underpricing of risk‑averse assets.

As the market continues to digest the implications of policy tightening, investors will likely keep a close eye on ETF flow data as a barometer of sentiment. The latest week’s record‑size outflows across six sectors—especially technology—serve as a cautionary note that even the most dynamic parts of the market are vulnerable to macro‑economic forces.