ETF investors flee China market despite rally

Overseas investors keep pulling money out of exchange-traded funds (ETF) tracking the Chinese market even as it rallies on.

Since the beginning of 2015 through to Jan 23, the total fund assets of two popular ETFs listed in Hong Kong tracking the Chinese market have fallen, data compiled from Bloomberg show.

Total assets at BlackRock's iShares FTSE A50 China Index ETF were down HK$13.5 billion (S$2.3 billion) to reach HK$75.1 billion at Jan 23. Total assets at the CSOP FTSE China A50 ETF were down 3.4 billion yuan (S$731 million) to 26.8 billion yuan.

Data from financial information provider Markit show that net outflows from ETFs exposed to China continued into 2015, from 2013 and 2014. Over US$2 billion has flowed out in January, after about US$2.4 billion each in December and November, and almost US$3 billion in October.