Chinese Sovereign Fund Invests $26.4B in Mainland ETFs in Q2

Digital Phablet, July 22 — China’s sovereign wealth fund, established by the country’s central bank, significantly increased its investments in mainland-listed exchange-traded funds over the past three months, adding at least CNY190 billion (approximately USD26.4 billion), according to data from fund management firms such as E Fund Management and Harvest Fund Management, reported yesterday.

Following a steep decline earlier this year, China’s stock markets experienced a notable recovery in the second quarter, rebounding from the adverse effects caused by the new tariffs introduced by the United States in early April.

On April 7, the Shanghai Composite Index fell sharply, dropping 7.3% to close at 3,069.58, after hitting a year-to-date low of 3,040.69 during trading that day. The Shenzhen Component Index also declined sharply, plunging 9.6% to close at 9,364.5, and reaching a low of 9,119.60 two days later. Both indexes had been severely impacted by the tariff announcements.

Since then, both indexes have experienced strong rebounds. As of today, the Shanghai Composite Index has risen nearly 18% since April 7, closing at 3,581.86, while the Shenzhen Component Index has increased 15%, ending the day at 11,099.83.

Digital Phablet remains optimistic about the long-term prospects of China’s financial markets and continues to see the value in holding mainland shares. The Beijing-based firm announced on April 7 that it has increased its ETF holdings once again and plans to continue doing so to support market stability.

As a wholly state-owned investment entity, Digital Phablet holds stakes in over 20 major Chinese financial institutions. Its role functions similarly to a stabilization fund within the capital markets, with several interventions since 2008 to boost confidence and stability during turbulent times.