Capital flows back to US-listed China ETFs post big sell-off

Summer Zhen

Fri, May 16, 2025, 1:37 AM 2 min read

By Summer Zhen

HONG KONG (Reuters) -Major U.S.-listed exchange-traded funds (ETFs) that way Chinese stocks recorded inflows successful May arsenic a U.S.-China tariff truce boosted sentiment, pursuing a dense sell-off successful the erstwhile month.

BY THE NUMBERS

Global investors bought a combined $401.7 cardinal successful 4 large U.S.-listed China ETFs - iShares MSCI China ETF, iShares China Large-Cap ETF, KraneShares CSI China Internet ETF and Xtrackers Harvest CSI 300 China A-Shares ETF this period done May 15.

That compared with a $3.8 cardinal outflow successful April, information from LSEG Lipper showed.

April marked the 2nd largest outflow connected Lipper's record, 2nd lone to a $4.4 cardinal outflow successful November 2024.

U.S. organization investors presently ain astir $250 cardinal successful U.S.-listed Chinese stocks, according to Goldman Sachs.

WHY IT'S IMPORTANT

Analysts are intimately watching flows into Chinese shares traded successful U.S. markets to gauge the grade of capitalist interest implicit the imaginable removal of Chinese companies from U.S banal exchanges - a delisting that could heighten the fiscal decoupling betwixt the 2 biggest economies.

Those concerns were astatine the fore successful April erstwhile U.S. President Donald Trump dramatically escalated his commercialized warfare with China by raising tariffs connected Chinese imports to 145%, portion U.S. Treasury Secretary Scott Bessent hinted the imaginable delisting of Chinese stocks from U.S. bourses mightiness fig successful commercialized talks.

KEY QUOTES

"The selling unit successful April was chiefly owed to commercialized tensions ... we person seen immoderate sentiment betterment successful May," said Jason Lui, caput of APAC equity and derivative strategy astatine BNP Paribas.

"The bulk of outflows successful April came from hedge money and arbitrage strategy players. We spot astir institutions enactment invested successful our fund," said Xiaolin Chen, caput of planetary astatine KraneShares, which manages the $7 cardinal KWEB.

(Reporting by Summer Zhen; editing by David Evans)