Overseas inflow into China’s onshore ETF market this year through July surged 146.3% from a year ago, rapidly closing the gap with Mainland investment flow into Hong Kong. ChinaAMC stands to capitalize on the trend.
BEIJING, Aug. 1, 2025 /PRNewswire/ — The sustained rally and growing risk appetite in China’s onshore equity market has drawn in surging portfolio inflow into the nation’s ETF market, with inbound trading volume under the ETF Connect mechanism hitting a record high.
Northbound trading into ETF listed in Shanghai and Shenzhen exchanges under ETF Connect hit 72.2 billion yuan ($10 billion) in July, the highest monthly level in 2025, beating that of March when a trading frenzy was sparked by DeepSeek’s technological breakthrough and global capital’s re-rating of China-themed stocks. The volume also beat that of southbound trading for the second month (June and July), according to Wind data.
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Historically, southbound trading has been more active than the other way around, as Mainland China investors favors internet, consumer and biotech names listed in Hong Kong. Northbound trading lagged due to A-share’s underperformance in the past few years, and international investors’ less recognition of its stock names. By the end of July, aggregate turnover in southbound trading hit 804.2 billion yuan since the ETF Connect scheme kicked off in July 2022, 11.23% above that of northbound trading.
The trend has gradually shifted this year, however, as northbound turnover caught up and occasionally surpassed southbound turnover. That happened in January, June, and July, according to Wind.
Trading peaked during the February-March “DeepSeek Moment”, when turnover spiked to 63.2 bn and 64.2 bn yuan, respectively. Still, they were outranked by the buoyant market in Hong Kong, where turnover hit 85 and 99 bn yuan.
Overall, northbound turnover this year to date surged 146.3% year-on-year to reach 376.2 billion yuan, Trading value reached 83.94% of the southbound value, compared to 80.27% a year earlier.
Onshore ETF giants such as China Asset Management (referred as ChinaAMC below) are well-positioned to benefit from the accelerated inflow into Mainland market.
Three years ago, when the ETF Connect program debuted, ten products from ChinaAMC were selected, among the 83 first batch ETFs eligible for northbound trading. Now, as the total eligible expanded to 248, the number of ChinaAMC’s qualifying ETFs grew to 24, the largest among all Chinese asset managers, according to Wind.
