China ETF Market Booms With Inflows Up 5x in 3 Years Despite Some US Operations Halt – iShares China Large-Cap ETF (ARCA:FXI), Franklin FTSE China ETF (ARCA:FLCH)

China’s exchange-traded fund (ETF) market has seen a five-fold increase in investment over the past three years

What happened:Money inflows into China ETFs have seen “stunning” growth, regularly hitting new highs over the past five years, according to Morningstar, CNBC reported Tuesday. Wanda WangMorningstar research director, said annual flows into Chinese ETFs have increased nearly fivefold over the past three years.

Data from the U.S. financial services firm shows that total annual flows into Chinese ETFs rose from 127.2 billion yuan ($17.49 billion) in 2021 to 387.2 billion yuan ($53.2 billion) in 2022. In 2023, the figure reached 604.3 billion yuan ($83.05 billion).

By the end of 2023, the total assets under management (AUM) of ETFs in China will have more than doubled from the end of 2020, reaching 1.82 trillion yuan ($250 billion).

“The growth of China’s ETF market in recent years is explosive,” Wang said.

Despite the volatility, the ETF market in China tends to be concentrated on major providers like Asset Management in China, Fund Management E And Huatai-Pine Bridgewhich are the three largest ETF providers by AUM, Morningstar noted.

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Why is this important?:This surge in Chinese ETFs comes despite a record number US-listed China ETFs have closed in 2024 as investors’ concerns about the world’s second-largest economy have grown. According to Morningstar Direct data, 13 US-listed China ETFs have ceased trading in the first quarter of 2024 alone.

Chinese stocks had witnessed a significant rally In the first half of the year, investors have revived their bets on a more serious and robust recovery. The SSE Composite Index, which includes all stocks listed on the Shanghai Stock Exchange, hit its highest level since September 2023, up about 19% from the 2024 lows.

Price action: During the pre-opening of the market on Wednesday, the KraneShares Trust KraneShares CSI China Internet Exchange Traded Fund KWEB was trading down 0.75% at $27.83 after closing at $28.05 on Tuesday. iShares MSCI China Exchange Traded Fund MCHI was trading at $42.56 during the same period after closing at $42.87 on Tuesday. iShares China Large Cap ETF FXI closed at $26.25 on Tuesday and was trading down 0.79% at $26.29. Franklin FTSE China Exchange Traded Fund FLCH closed at $16.82 on Tuesday.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari

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