gan Stanley Investors are using their feet to vote and showing strong enthusiasm for entering the market after the unexpected policy released on 924, foreign investment banks have adjusted their views on Chinese assets, with China asset ETFs occupying 6 positions in the top ten global ETF fund inflows last week (October 7-11), with 5 of them being A-share ETFs. Specifically, Yifangda's ChiNext ETF had a net inflow of 4.962 billion USD for the week, ranking first globally in terms of fund inflow volume, while Huatai Bairui's Shanghai and Shenzhen 300 ETF had a net inflow of 2.462 billion USD for the week, ranking third; Anshuo's China large-cap stock ETF had a net inflow of 2.461 billion USD for the week, and this is the only overseas Chinese asset ETF issued by a foreign manager on the list. In the industry's view, under the drive of the policy, the funds flowing into ChiNext ETF exceeded their global counterparts, and four others were from ChiNext and STAR Market boards. On one hand, these two markets are more resilient; on the other hand, the largest fund inflow last week happened on October 9, where new investors must have a 2-year trading record to invest in ChiNext stocks, ETFs have become the best tool to accept funds. Six Chinese asset ETFs enter the top ten global ETF fund inflows Although A-shares had only 4 trading days last week, Chinese assets showed strong fund-raising capabilities, going from "buying more as the price drops" to "rapidly jumping on the bus." ETFs have become a key force contributing to the increase in market funds. This top ten list of global weekly fund inflows sets a new record. Chinese asset ETFs are now in the focus of global investors. As mentioned earlier, Yifangda's ChiNext ETF, Huatai Bairui's Shanghai and Shenzhen 300 ETF, and Anshuo's China large-cap stock ETF had net inflows of 4.962 billion USD, 2.462 billion USD, and 2.461 billion USD for the week, ranking first, third, and fourth on the list. In addition, the top ten weekly fund inflows list also includes Jiashi Shanghai and Shenzhen chip ETF, Huaxia chip 50 ETF, and Hua'an ChiNext 50 ETF, all of which are "double innovation" themed ETFs, with inflows of 2.266 billion USD, 2.042 billion USD, and 1.622 billion USD, respectively ranking sixth, eighth, and tenth. Funds flow into equity markets through index funds, and this effect is being further magnified. In the interval from September 24 to October 11, the net inflow of A-share equity ETF funds exceeded 290 billion RMB, with 8 ETFs reaching a billion-scale. Although the overall flow of equity ETF funds has decreased due to recent market fluctuations, the strong example of Chinese asset ETFs entering the top ten global fund inflows has had a strong demonstration effect on the development of domestic ETFs. More data supports the return of foreign funds to Chinese assets According to Barclays Bank citing EPFR data, in the past week, the overall stock market witnessed a net inflow of 40 billion USD, the largest since July. Emerging markets received a net inflow of 41 billion USD, a record high. Among them, the soaring Chinese stock market received 39 billion USD in inflows, also setting a new record for the weekly net inflow, with investors mainly coming from domestic sources with a net inflow of 30 billion USD, while foreign investors also contributed 9 billion USD to the Chinese market. The high investment enthusiasm permeated the entire National Day period, with Hong Kong and overseas listed Chinese asset ETFs becoming the focus of fund flows. Unable to buy A-shares, Hong Kong ETFs tracking A-share indices and US-listed Chinese asset ETFs were the alternatives. taking Hong Kong stocks as an example, on October 32nd, Southern Dongying ChiNext 50 Index ETF surged by 234.3%, with the fund company urgently issuing risk warnings in the intraday market, due to risks such as significant secondary market premiums, the closing gain fell to 29% before the market closed. On the same day, Boshi Science and Technology 50 ETF, XL Boshi Zhongchuangye ETF, and other funds saw closing gains of 106.19% and 60.22%. As of October 7, in the recent 5 trading days, ETFs tracking A-share indices topped the charts for gainers. Among them, XL Boshi Zhongchuangye ETF, Boshi Science and Technology 50 ETF, and Boshi Science and Technology 50-RETF saw their gains double in the past 5 trading days, reaching gains of 15.73%, 14.86%, and 11, respectively. 82% gain. The continuous inflow of funds has led to the continuous increase in the size of the Hong Kong Stock Exchange's "A-share asset" ETFs. On October 2nd, the Nanfang Dongying Hang Seng Technology Index ETF surpassed 40 billion Hong Kong dollars in assets under management; on the 4th, Huaxia Fund Hong Kong announced that its Huaxia Hang Seng ESG ETF had exceeded 10 billion. Overseas Chinese asset ETFs have also been continuously added to their positions, with the largest market value and best liquidity Chinese ETF on the US market, the Anshuo China Large Cap ETF, cumulatively rising 12.37% during the National Day period, with trading volume reaching historical high levels. Huaxin Securities research report pointed out significant capital inflows into A-shares, with sustained outflows of foreign funds from A-shares starting to reverse on the 25th, with a total inflow of 1.9 billion USD on the 25th and 26th. In addition, the continued outflows of US funds from China have turned into inflows as well, with a net inflow of 700 million USD from US funds into China from September 26 to 30. Morgan Stanley's report emphasized: at least 10% of a technical rebound space for A-shares in the short term With the release of the Ministry of Finance policy, Morgan Stanley pointed out in its report that moderate fiscal stimulus is expected, with the first steps in central fiscal support for real estate and social security expenditures being moderate and gradual, with a slight improvement in GDP quarter-on-quarter in the next 1-2 quarters. Morgan Stanley further pointed out that in the short term, there is still at least a 10% technical rebound space for A-shares, with two main beneficiary stocks: companies with dividend yields and free cash flow yields significantly higher than the 2.25% loan prime rate; and A+H shares in the Hong Kong stock market that are currently trading at a discount but can benefit from recent policy boosts. If the quarter-on-quarter GDP growth rate warms up in the coming months and decision-makers further launch re-inflation policies, and the fundamentals of companies improve, the stock market may see a more sustainable uptrend, with valuations possibly returning to the late 2022 to early 2023 levels. Additionally, in terms of the details of the policy package, Morgan Stanley believes that it is necessary to closely monitor the expectations of fiscal policy changes. In the next few months, if loose policies continue to increase or gradually relax, they are expected to support beneficiary stocks. Overall, the views of foreign investors on Chinese assets are gradually changing, and the market's strong sentiments on investors entering the market also reflect a high level of confidence in China's economic growth and policy adjustments.Morgan Stanley believes that more attention needs to be paid to the details of exchange instruments and special refinancing, including: what criteria must investment entities meet to use these tools, what stocks/indexes/funds can funds be used to purchase (passive versus active), whether buying individual stocks is allowed or limited to certain ETFs, and specific implementation timelines and schedules.This article is reprinted from "Caixin", edited by Chen Xiaoyi.