Chinese stock investors are ploughing money into exchange-traded funds (ETFs) this year at the fastest pace on record as they choose to play a languid stock market passively and wait for it to trough, reports Reuters.
The trend has also caught on as active fund managers in China struggle to make money and as Beijing uses ETFs to support stock markets and channel funding into strategic sectors such as technology and green energy.
ETFs, which are funds that typically track an index, have garnered more than 400 billion yuan ($55.97 billion) this year in what would be record annual net inflows, according to mutual fund house China Asset Management Co (ChinaAMC), which has the biggest market share in the products.
"When the market falls, many investors would use ETFs to bet on a bottom," said Xu Meng, executive general manager of quantitative investment at ChinaAMC, which emulates global ETF giants Vanguard and BlackRock iShares.
In contrast, active equity and allocation funds have suffered net outflows of roughly 360 billion yuan, as investors "have been looking for better value propositions in ETFs," said Morningstar senior analyst Andy Huang.
China sees an ETF boom as investors wait for stocks to trough
FE Team | Published: November 30, 2023 00:25:20
China sees an ETF boom as investors wait for stocks to trough
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