China A500 ETFs inflows surge to record high towards year-end

INFLOWS to a group of exchange-traded funds (ETFs) tracking the CSI A500 Index surged to a fresh record on Thursday (Dec 18), with the strong activity leaving traders perplexed.

Investors bought 8.7 billion yuan (S$1.6 billion) worth of shares in seven of the largest CSI A500 ETFs, including that of Huatai-Pinebridge Fund Management, a day after a record turnover in the cohort.

This compares with an inflow of just 220 million yuan into a group of eight funds, known to be preferred by the national team. 

The total turnover for the CSI A500 ETFs remained elevated on Thursday, accounting for around 2.7 per cent of the value of onshore stocks that changed hands. Five of the top six equity ETFs with the largest inflows were among the cohort. 

Launched in September 2024, the CSI A500 Index contains the largest and most liquid 500 companies in the mainland, excluding firms with low environmental, social and governance ratings and which do not have stock-connect eligibility.

The top components of the gauge by weight are Contemporary Amperex Technology, Kweichow Moutai and Ping An Insurance Group. The index is up nearly 20 per cent this year, versus a gain of 16 per cent for the CSI 300 Index.

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To be sure, the cohort of funds also saw persistent flows at the end of the previous two quarters, with year-end targets for funds likely a factor for the inflows. Still, net purchases appear more sustained this month. BLOOMBERG