Chinese equities see reduced outflows in May

Published 04/06/2025, 10:12
© Reuters.

Investing.com -- Latest data showed Chinese equities experienced a reduced outflow of $0.2 billion from foreign domiciled funds in May, a significant slowdown compared to the $5.3 billion outflow recorded in April.

This shift was driven by passive funds, which returned to inflows with $1.4 billion, contrasting with the $3.7 billion outflow in April. However, active funds continued to see outflows, amounting to $1.5 billion, slightly down from $1.6 billion in the previous month.

As of May 31, cumulative foreign passive inflows since October 2022 reached levels similar to those of early March 2025. In contrast, cumulative foreign active flows hit a historical low since late 2022. This trend reflects a nuanced adjustment in global fund allocations towards Chinese equities.

Sector-wise, active fund managers increased their investments in Consumer Durables & Apparel and Consumer Services while reducing allocations in Capital Goods, Food Beverage & Tobacco, and Media & Entertainment. On the underweight side, the most significant increase was noted in Materials, whereas Consumer Discretionary Distribution & Retail and Automobiles & Components saw the most trimming.

Notable company-specific activity included increased investments in Alibaba (NYSE:BABA), BYD (SZ:002594), Midea Group, and JD.com. Conversely, Tencent (HK:0700) and Zijin Mining were among those most trimmed by active fund managers during the quarter-to-date period.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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