Source: Wall Street News

The A-share market was closed during the National Day holiday, and the popularity of overseas ETFs tracking A-shares continued unabated. The crazy influx of capital triggered a sharp rise in related ETFs!

Chinese ETFs in various markets such as Japanese stocks, US stocks, and Hong Kong stocks all achieved a sharp rise. Looking at the three major markets, the average increase of ETFs tracking the Shanghai and Shenzhen 300 was 20.52%, and the average increase of the tracking Science and Technology Innovation 50 ETF reached 64%. The average increase of AH stock brokerage stocks during the holiday period was over 90%.

Listed in Japan $One ETF Southern China A-Share CSI 500 (2553.JP)$ The increase was the most intense, with an increase of 89.29% on the 7th. The cumulative increase during the holiday period was 2021.06%, and the price doubled more than 20 times!

At the same time, Hong Kong stock ETFs that track the A-share index have also been robbed. ETFs tracking the sharp rise of Science and Technology Innovation 50 and Shanghai and Shenzhen 300. The former had an average increase of 64%, while the latter had an average increase of about 20%.

Among them, $Bosera STAR 50 Index ETF (02832.HK)$ Today's increase is over 30%, and the cumulative increase since October 2 has increased to 124.27%; $Bosera Star 50 Index ETF-R (82832.HK)$ It was followed by a cumulative increase of over 100%.

Almost all of the 150 stocks listed on AH shares rose during the holiday season, only $COSCO SHIP HOLD (01919.HK)$ There has been a decline. In the ranking of growth, brokerage stocks are “far ahead”. $CMSC (06099.HK)$ A cumulative increase of 180%, $SWHY (06806.HK)$ , $CSC (06066.HK)$ It also achieved an increase of about 100%, with an average increase of 93% for AH brokerage stocks during the holiday period.

The performance of ETFs in the US stock market is not inferior. $Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR.US)$ The cumulative increase over the past 5 trading days was over 13%. $VanEck ChiNext ETF (CNXT.US)$ The cumulative increase was over 20%.

According to statistics, during the week before the holiday season (September 23 to September 27), $KraneShares CSI China Internet ETF (KWEB.US)$ , $iShares China Large-Cap ETF (FXI.US)$ , $iShares MSCI China ETF (MCHI.US)$ The asset size of many Chinese securities ETFs surged, and net capital inflows hit new highs in the past year or even three years, respectively.

What is worth asking is that at a time when Chinese ETFs are rising strongly, one that tracks the performance of large Chinese companies and is benchmarking the “Big Seven Tech” in US stocks $Roundhill China Dragons ETF (DRAG.US)$ Listed on October 3, the “China Dragon” ETF closed at $25.630 last week, with a cumulative increase of 2.55% over the two trading days.

Accelerate “betting on China”

Various current signs indicate that overseas hedge funds are “betting on China” at an accelerated pace. Chinese and Thai international strategy analyst Yan Zhaojun said that in the context of the closure of A-shares and Hong Kong Stock Connect, the sharp rise in the volume of the Hong Kong stock market perfectly reflects the characteristics of foreign capital and local Hong Kong capital entering the market one after another due to fear of missing out.

Earlier, hedge fund boss David Tepper publicly “shouted” to buy everything in China. He said he will increase the allocation ratio of Chinese assets, and has already purchased more “everything” about China after the US cut interest rates, such as ETFs, futures, etc.

Fredrik Bjelland, portfolio manager at emerging market fund Skagen Kon-Tiki, said that the rebound still has a long way to go, and China's valuation is very attractive. Furthermore, compared to history, global investors' positions are very low.

At the same time, many foreign-funded institutions are optimistic about the upward prospects for Chinese assets. Among them, Nomura Securities recently raised its forecast for the MSCI China Index for the end of this year by 10%.

Citi published a research report, reaffirming its positive view on the Chinese market. It will be at the end of June 2025 $Hang Seng Index (800000.HK)$ The target was raised by 24% to 26,000 points, and the target by the end of 2025 was set at 28,000 points, against Citi $CSI 300 Index (000300.SH)$ Also, the target price of the MSCI China Index will increase by 84 points to 4,600 points in the first half of next year, and the target price will rise to 4,900 points by the end of next year.

A sharp rise in the holidays, a preview for tomorrow?

Some analysts believe that this may be a preview of the trend of A-shares after opening. The sharp rise in the market reflects expectations and expectations for fiscal policy stimulus. Morgan Stanley published a research report saying that if China announces more support measures in the next few weeks, the Chinese stock market may rise further by 10% to 15%, and expectations for further fiscal expansion are back on the table.

Morgan Stanley further stated that after the central government introduced a series of economic stimulus measures, foreign capital poured into the Chinese stock market at the end of September, mainly driven by the inflow of 6 billion US dollars from passive funds, while the inflow of active funds from September 25 to October 2 was relatively moderate, only about 0.3 billion US dollars; AxJ active funds reduced their share of holdings in China the most, followed by active funds in global and emerging markets.

Attached table: A list of AH share and Hong Kong stock performance during the holidays

Editor/jayden