MNI BRIEF: China Sovereign Fund Continues To Purchase ETFs

Central Huijin Investment, Chinese sovereign funds, and insurance companies have continued to make significant allocations to exchange-traded funds (ETF) according to recently published annual reports, noted the Shanghai Securities Journal hosted by Xinhua News Agency.

The Huaxia CSI 300 ETF report showed Huijin increased its holdings by more than 1 billion shares in the second half of 2023. Huijin announced its purchase of ETFs and stated it would continue to increase its holdings on Oct 23, 2023 when several ETFs experienced increased trading volumes towards the end of the day. On Feb 6, Huijin announced an expansion of the scope of its holdings of ETFs, noting it would firmly maintain the stability of the capital market. (See MNI: China Should Limit IPOs, Boost Growth To Lift Stock Market)

The newspaper said ETFs have become a stabilising force in the market and policy funds represented by Huijin are important forces in the market. Meanwhile, various types of mid- and long-term funds are expected to increase ETF holdings to gain further A-share market expsoure, it reported.