Multiple funds increase positions against the trend, and cross-border ETF scale returns to over one trillion yuan

Author: Zhao Mingchao

In the recent correction phase of the Hong Kong stock market, a large amount of capital has entered through ETFs against the trend, pushing the cross-border ETF size back to one trillion yuan. Statistics show that since the beginning of this year, over 50 billion yuan of funds have flowed south through ETFs. As funds pour in, several Hong Kong stock theme ETFs have reached new highs since their listing.

Mass emergence of “Giant” Products

According to Choice estimates, as of February 11, the cross-border ETF size reached 1 trillion yuan. Shanghai Securities News found that on January 12, this size first broke through one trillion yuan, then slightly declined afterward.

Over the past year, both in scale and quantity, cross-border ETFs have achieved significant growth. By the end of 2024, there were 138 cross-border ETFs listed and traded, with a total size of 424.226 billion yuan. As of February 12 this year, the number of listed cross-border ETFs increased to 214.

The camp of cross-border ETFs with over 10 billion yuan also expanded significantly. At the beginning of 2025, only 11 cross-border ETFs had a scale exceeding 10 billion yuan. By February 11 this year, 26 cross-border ETFs had surpassed this threshold.

Looking at the specific composition of cross-border ETFs, Hong Kong stock theme ETFs are the main force. As of February 11, the total scale of Hong Kong stock theme ETFs was 822.451 billion yuan, with a batch of “Giant” products emerging. Among them, the China Asset Management Hong Kong Stock Connect Internet ETF grew from 22.19 billion yuan at the beginning of 2025 to 86.654 billion yuan, making it the largest cross-border ETF currently.

Following closely is the Huaxia Hang Seng Technology ETF, with a scale of 52.759 billion yuan. Additionally, the Huatai-PineBridge Southern East-Hengsheng Technology ETF has a scale of 48.476 billion yuan, and the E Fund China Concept Internet ETF stands at 41.909 billion yuan. The GF Hong Kong Stock Connect Non-Bank ETF, Huaxia Hang Seng Internet ETF, ICBC Credit Suisse Hong Kong Stock Connect Technology 30 ETF, and E Fund Hang Seng Technology ETF also all have scales above 30 billion yuan.

Multiple Hong Kong stock theme ETFs hit new highs

According to Choice estimates, since the beginning of this year, net inflows into Hong Kong stock theme ETFs amounted to 54.435 billion yuan as of February 11.

From the capital flow perspective, during the adjustment of the Hang Seng Tech Index, funds showed a trend of buying more as prices fell. Specifically, the China Asset Management Hong Kong Stock Connect Internet ETF had a net inflow of 6.996 billion yuan, the Huatai-PineBridge Southern East-Hengsheng Technology ETF net inflow was 6.863 billion yuan, and the Tianhong Hang Seng Technology ETF and Huaxia Hang Seng Technology ETF both had net inflows of 4.9 billion yuan. Additionally, the E Fund Hang Seng Technology ETF, E Fund China Concept Internet ETF, and Huaxia Hang Seng Internet ETF each had net inflows exceeding 3 billion yuan.

Besides the tech-focused Hong Kong ETFs attracting capital, the GF Hong Kong Stock Connect Non-Bank ETF saw a net inflow of 9.909 billion yuan, the Huitianfu Hong Kong Stock Connect Innovation Drug ETF attracted 2.919 billion yuan, and the E Fund Hong Kong Stock Connect Consumer ETF received 1.418 billion yuan.

With continuous capital inflows, many Hong Kong stock theme ETFs have hit new highs since their listing. As of February 11, the Huatai-PineBridge Southern East-Hengsheng Technology ETF reached 68.663 billion units, the E Fund Hang Seng Technology ETF reached 41.228 billion units, and the Tianhong Hang Seng Technology ETF reached 18.006 billion units, all setting new records.

Institutional analysis of Hong Kong stock investment opportunities

Since the beginning of the year, public funds have continued to increase their holdings of Hong Kong stock theme ETFs. Choice data shows that since the start of the year, up to February 12, nearly 30 Hong Kong stock index funds have been reported, including the Hong Kong Stock Connect Information Technology Composite ETF, Hong Kong Stock Connect Automotive Theme ETF, and Hong Kong Stock Connect Internet ETF.

Regarding the recent adjustment of the Hang Seng Tech Index, Zhang Xia, an analyst at China Merchants Securities, stated in a recent report that because public funds have a much higher allocation to Hong Kong stocks than the performance benchmark, there is significant selling pressure. In Q4 2025, active equity funds reduced their allocation to Hong Kong stocks, and currently, the scale of public funds over-allocating to Hong Kong stocks has shrunk considerably. Looking ahead, the net selling caused by exceeding the benchmark may come to an end. Meanwhile, the valuation of the Hang Seng Tech Index is at a historically low level, with some leading companies’ P/E ratios only in the ten-plus range, having already fully discounted AI business valuations. Additionally, from an industry development perspective, Hong Kong tech continues to be catalyzed.

“Since Q4 last year, the much-watched Hong Kong tech sector has been experiencing a bottoming process as expected, but this pessimistic downward trend has now shown signs of stabilization. As tech giants’ efforts in AI application commercialization begin to pay off, with a proliferation of large model competitions, it is accumulating momentum for future profit recovery,” said a senior official from China Asset Management in an interview with Shanghai Securities News. He added that the liquidity shock in Hong Kong stocks is nearing an end, and the proportion of overseas cornerstone investors in Hong Kong IPOs has increased. This indicates that long-term overseas capital is “returning to the field,” injecting new “fresh water” into the market.