China’s Asset Management Milestone
One of China’s largest asset managers has marked a significant achievement by becoming the first to oversee over 1 trillion yuan (approximately $143 billion) in exchange-traded funds (ETFs). This comes as the government pushes for a “national team” to bolster stock prices.
Recent figures from data company Wind show that the value of China Asset Management ETFs reached 1.02 trillion yuan earlier this week. Another major player, E-Fund, is close to hitting similar figures.
While China’s ETF market is still relatively small compared to the United States, which held $13.5 trillion in assets under management in 2025, it has grown rapidly. Last year alone, it expanded by 2.3 trillion yuan, finishing 2025 with more than 6 trillion yuan in assets.
According to industry specialists from a prominent investment trust in Beijing, these financial products have become “an important means and essential infrastructure” for investors wanting to engage with the domestic stock market.
“This trend is closely aligned with directions being encouraged by regulators and national policy,” the expert noted.
Since a significant market decline caused the blue-chip CSI300 index to plunge by 45.6% from 2021 to 2024, the Chinese government has been actively promoting ETFs as a way to stimulate the market. The government seems to increasingly rely on ETFs to stabilize stock prices, guiding state-backed investment teams to step in during turbulent times.
The China Investment Corporation, the nation’s sovereign wealth fund, held 1.6 trillion yuan in ETFs by mid-2025, accounting for more than a quarter of total ETF assets under management in China, as noted in Bloomberg data.
Brendan Ahern, the chief investment officer at CraneShares, remarked on the growing institutionalization of the market in China. He mentioned, “ETFs may start with a focus on retail, but over time they become instrumental for pensions, foundations, and insurance companies… There are indeed several factors driving the growth of the ETF industry.”
The Chinese government is also working on reforms aimed at protecting investors and fostering long-term investment habits. For instance, management fees for most ETFs in China have been cut to 0.15% of assets under management, down from 0.5% just two years ago. Industry insiders indicate that several domestic asset management firms now face obstacles in turning a profit unless their assets exceed 500 billion yuan.
This reform, coupled with increased attention to China’s technological innovations, has contributed to the market’s impressive growth. Last year, China’s benchmark CSI 300 index rose by 17.7%, while the tech-heavy ChiNext index saw nearly a 50% increase.
There has been a surge in ETFs that offer a cost-effective way for investors to tap into Chinese stocks. Since 2020, over 750 new ETFs have launched in China, many of which target innovative sectors like technology.
Foreign investors are also increasingly using ETFs to gain exposure to the Chinese market. Although foreign active fund managers sold off Chinese stocks last year, heavy inflows into ETFs were noted, according to EPFR data.
Meng Lei, a China equity strategist at UBS Securities, commented that while retail investments in broad-based ETFs have stagnated over the past year, there’s a growing interest in “thematic” ETFs centered around trends such as AI and robotics. “When you buy a mutual fund, you have no control over what you’re investing in. So if you like AI, just buy an AI ETF,” he pointed out.
