Retail investors in China will likely continue to snap up exchange-traded funds and thematic funds this year after a record-breaking 2025 for the Chinese mutual fund market, says Evonne Gan, a senior executive at US financial technology firm Broadridge Financial Solutions.
The company’s data shows that assets under management in China’s fund market was more than 34.9 trillion RMB (US$5 trillion) as of end-November, a record high figure after eight consecutive months of gains.
Gan, director for Asia Pacific asset management growth solutions at Broadridge, attributes the increase primarily to rising net inflows into money market funds, ETFs and thematic funds, fuelled by a rally in China’s stock market. The benchmark CSI 300 Index rose more than 18% last year.
“Fund buyers’ preference shifted from actively managed mixed-asset and equity products to passive approaches, with surveys indicating over half of retail investors plan to increase ETF exposure significantly,” Gan says in an interview with Asia Asset Management.
She says investors are increasingly favouring ETFs that track high-performing sectors such as artificial intelligence and advanced manufacturing.
She expects the core trend is continued asset growth with a gradual rotation from cash to risk assets through 2026.
“Equity fund flows have been more cyclical, improving when policy support and earnings expectations stabilise,” she says.
“Further, the Chinese mutual fund market is expected to become increasingly equity-led, with a clear tilt towards ETFs and thematic strategies.”
As for fixed income, she says demand for traditional pure bond funds will likely remain constrained, while higher-return fixed-income plus products and liquidity-driven money market funds are expected to maintain their positive flow trajectory.
