China National Team ETFs Experience Significant Outflows as Market Sentiment Weakens

Significant Withdrawals from Chinese ETFs Signal Market Cooling Efforts

Several exchange-traded funds (ETFs) with substantial holdings by China’s so-called “national team” investors experienced unprecedented outflows on Thursday, reflecting broader measures to moderate the recent surge in the stock market.

The Huatai-Pinebridge CSI 300 ETF recorded an all-time high withdrawal of 20.2 billion yuan (approximately $2.9 billion) on Thursday, marking the largest outflow since its launch in 2012, even as the index it follows edged up by 0.2%. Other major funds, including the E Fund CSI 300 ETF and ChinaAMC CSI 300 ETF, also saw their largest-ever outflows.

The actions of the national team—state-backed institutional investors—may indicate official intentions to curb a rally fueled by optimism around artificial intelligence and strong earnings. Their recent selling activity followed a surprise regulatory move to tighten margin financing, a measure largely interpreted as targeting speculative trading in select technology stocks.

Jiang Liangqing, managing director at Zhuhai Greenbamboo Private Fund Management, commented, “It appears the National Team is offloading assets to help stabilize the market. While speculation and excessive trading have been prevalent in certain sectors, reducing ETF holdings could help cool things down without causing conflicts of interest.”

On Friday, the CSI 300 Index climbed as much as 0.9%, bringing its year-to-date gain to 3.6%. Meanwhile, the ChiNext Index, which is focused on technology shares, advanced up to 1.2% after a 0.6% increase the previous day.

Source: Bloomberg L.P., 2026