China’s exchange-traded fund market saw 805 billion RMB (US$118.95 billion) of net outflows in the first three months of the year, the largest quarterly sum on record, as investors pulled money from broad-based ETFs, according to Morningstar Inc.
This was the first quarterly outflow in a year, and marked a reversal from the600 billion RMB of inflows in the fourth quarter of 2025.
It occurred during a period when investors became cautious about the Chinese economy. China’s benchmark CSI 300 Index fell 3.89% in the first quarter.
Investors pulled “massive” amounts from broad-based ETFs, mainly from those managed by state-owned investment firm Central Huijin, leading to a record 787.5 billion RMB overall net outflow from equity ETFs, Wanda Wang, an analyst in the manager research divisionof Morningstar, says in a report on May 28.
She says some sector-specific equity ETFs, such as those tracking the chemical industry and grid equipment, attracted inflows.
Bond ETFs were also hit, albeit to a lesser extent.
There was an 84.5 billion RMB outflow from fixed income ETFs because of “substantial” redemptions” from corporate bond funds. Wong notes that this marked a reversal after “robust” inflows in the prior three quarters.
The pullouts from equity and bond funds led to overall ETF assets in China declining from 5.85 trillion RMB at the end of last year to 4.83 trillion RMB at the end of March 2026.
It also caused the combined market share of the country’s top three ETF providers — China Asset Management Corp, E Fund Management and Huatai-PineBridge Fund Management – to drop to 35.5% in March from 46.8% a year ago.
