Net inflows into Chinese equity exchange-traded funds plummeted 74% year-on-year in June as investors took profit and sought the safety of bond ETFs, which surged 853%.
Inflows into equity funds declined to 119.59 billion RMB (US$16.66 billion) from 461.75 billion RMB in June 2024, while bond ETFs attracted 204.84 billion RMB, up from RMB 21.49 billion RMB a year ago.
The figures were compiled for Asia Asset Management by Morningstar Inc.
Rachel Sun, director of manager research of Morningstar, attributes the lower inflows into equity funds to two main factors.
“First, as the equity market rebounded from late September 2024 and maintained momentum into 2025, investors took profits by selling their ETF holdings amid the recovery, shifting from accumulation to profit-taking,” Sun tells AAM.
The other reason, she says, is because state-owned investment company Central Huijin stepped back after buying significant amounts of ETFs during the downturn to support the stock market.
As for the influx of money into bond funds, she says it was driven by ongoing demand for low-risk fixed income assets. According to Sun, bond ETFs are increasingly seen as ideal due to their diversified investment characteristics.
China’s ETF market had around 4.13 trillion RMB of assets as of June, up from 3.48 trillion RMB at the end of last year.
