China’s Renewed Stock Market Support
Executive Summary
- We believe China's "National Team" has begun buying stocks again, as they have in the past, which has historically preceded bull market periods for China's equity market.
- Similar to September of 2024, when China's markets rallied, the PBOC is also meeting with financial institutions, extending significant swap facilities to banks, and lowering the interest rate for borrowing for the purpose of stock buybacks.
- This time, the National Team is broadening their purchases to include technology stocks and small caps, rather than focusing on the largest listed names and state-owned firms.
- We believe this may benefit the KraneShares CSI China Internet UCITS ETF (Ticker: KWEB), KraneShares China Technology & Semiconductor STAR 50 Index UCITS ETF (Ticker: KSTR), and the KraneShares ICBCUBS S&P China 500 UCITS ETF (Ticker: CHIN)
Who is China's National Team?
China's "National Team" is comprised of investment firms associated with the government, including the National Social Security Fund, pension funds, sovereign wealth funds, and state-owned investment houses. Historically during periods of market stress, this group buys stocks in order to stabilize the market. Historically, this has been done through mega cap stocks and ETFs with mega cap exposure due to their influence on indexes.
What is happening currently and how does it compare to history?
In October, this group of firms began buying domestic equity ETFs listed in China again to support the onshore stock market. Over the last month, eleven ETFs have received inflows of more than $1 billion for a total of $44.15 billion. The top 20 ETFs by inflow accounted for $52.26 billion of inflow, while the 1,329 equity ETFs listed in China have had inflows totaling $58.57 billion.1 We believe this level of concentrated inflows is a strong indication of high National Team activity, which is a potentially strong signal to investors that China's government has drawn a line in the sand and decided to step in to support the stock market, as they have done in the past.
| Category | Net Flows (USD Millions) |
|---|---|
| Large Cap ETF | $9,228 |
| Non SOE ETF | $7,066 |
| STAR ETF | $6,720 |
| Large Cap ETF | $6,522 |
| Large Cap ETF | $3,351 |
| Large Cap ETF | $3,238 |
| Mega Cap ETF | $2,311 |
| Small Cap ETF | $1,842 |
| Mid Cap ETF | $1,318 |
| Small Cap ETF | $1,309 |
| Non SOE ETF | $1,242 |
| Total | $44,148 |
We have identified, based on our research and experience, five China-listed domestic ETFs that tend to be favored by the National Team. Spikes in the buying and selling of these ETFs often precede significant market movements to the upside, in the case of buying, and the downside, in the case of selling. We have tracked the largest flow periods for these ETFs since the end of 2023.
One example of the National Team buying was centered around an announcement by Central Huijin, a state-owned fund and confirmed "National Team" member, on 6th February, 2024, that it would be significantly increasing its holdings of stocks and ETFs.2 It was followed by another announcement from the People's Bank of China (PBOC), China's central bank, that it would extend an RMB 500 billion swap facility and an RMB 300 billion re-lending facility to support stock buybacks and increased shareholdings on 24th September, 2025.3 These announcements and flow spikes preceded moves higher in the Shanghai Composite Index, as seen in the chart below.
We believe these flows are likely to continue because the National Team has plenty of dry powder. Central Huijin, for example, held $230 billion in ETFs at the end of December of 2025. Available reporting indicates that Central Huijin substantially reduced its reported ETF holdings in Q1 2026.5
On Monday, the PBOC announced a meeting with financial institutions to discuss stock market support.4 Meanwhile, similar to in September of 2024, when China's markets rallied, the PBOC is also extending significant swap facilities to banks, and lowering the interest rate for borrowing for the purpose of stock buybacks.
Previous interventions have been mostly focused on the largest listed firms with the highest state ownerships and the ETFs that track them. However, the current interventions appear broader, including ETFs with mid and small cap stock exposure, ETFs tracking the Science and Technology (STAR) Board, and a greater share of non-state-owned firms.
How to invest alongside China's National Team:
Recent history highlights the potential upside of investing alongside the National Team, and the downside inherent in National Team selling. This is especially true, historically speaking, when ETF buying is accompanied by policy support, which we believe we are seeing today from the PBOC.
The previous major interventions by the National Team that we identified, on 6th February, 2024 and 24th September, 2024, preceded mostly positive performance for the KraneShares CSI China Internet UCITS ETF (Ticker: KWEB), KraneShares China Technology & Semiconductor STAR 50 Index UCITS ETF (Ticker: KSTR), and the KraneShares ICBCUBS S&P China 500 UCITS ETF (Ticker: CHIN).
China ETF Performance
Starting 06/02/2024, Following Huijin Adding to Holdings Announcement
| Performance (%) | |||||
|---|---|---|---|---|---|
| Ticker | Fund | 1 Mo | 3 Mo | 6 Mo | 12 Mo |
| Date Range06/02/24 to: | 06/02/2024 – 06/03/202406/03/24 | 06/02/2024 – 06/05/202406/05/24 | 06/02/2024 – 06/08/202406/08/24 | 06/02/2024 – 06/02/202506/02/25 | |
| KWEBChina Internet | China Internet | 1.62% | 14.33% | 5.31% | 34.07% |
| KSTRChina Semiconductor & Technology | China Semiconductor & Technology | 13.08% | 6.84% | -0.94% | 28.62% |
| CHINChina All Shares | China All Shares | 5.42% | 9.97% | 5.68% | 23.87% |
Starting 24/09/2024, Following RMB 800 Billion Support Facility
| Performance (%) | |||||
|---|---|---|---|---|---|
| Ticker | Fund | 1 Mo | 3 Mo | 6 Mo | 12 Mo |
| Date Range24/09/24 to: | 24/09/2024 – 24/10/202424/10/24 | 24/09/2024 – 24/12/202424/12/24 | 24/09/2024 – 24/03/202524/03/25 | 24/09/2024 – 24/09/202524/09/25 | |
| KWEBChina Internet | China Internet | 10.56% | 7.69% | 29.40% | 49.56% |
| KSTRChina Semiconductor & Technology | China Semiconductor & Technology | 36.20% | 38.43% | 44.78% | 97.42% |
| CHINChina All Shares | China All Shares | 13.27% | 10.72% | 19.76% | 43.49% |
Source: Bloomberg. Performance measured from 06/02/2024 and 24/09/2024, respectively. Performance shown is total return using closing price.
Returns are provided in USD. To the extent the base currency of an available share class is not USD, returns may increase or decrease as a result of currency fluctuations. The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. To the extent the base currency of an available share class is not USD, returns may increase or decrease as a result of currency fluctuations. For KWEB performance data current to the most recent month-end, please visit kraneshares.eu/etf/kwebln. For KSTR performance data current to the most recent month-end, please visit kraneshares.eu/etf/kstrln. For CHIN performance current to the most recent month-end, please visit kraneshares.eu/etf/chinln.
Conclusion
We believe the increased flows into Mainland China-listed equity ETFs in the past month, likely driven by the National Team, and Monday's gathering of financial institutions by the central bank could be strong signals that China's government is stepping in to support the stock market.
Please click here for KSTR top 10 holdings, standard performance, and risks.
Please click here for KWEB top 10 holdings, standard performance, and risks.
Please click here for CHIN top 10 holdings, standard performance, and risks.
This is a marketing communication. Please refer to the UCITS Prospectus, the KIID, and the PRIIP before making any final investment decision.
Citations:
- Data from Bloomberg as of 30/Oct/2026.
- Ahern, Brendan. "Broad-Based Rebound In Mainland China and Hong Kong," China Last Night. 6 February, 2024.
- Ahern, Brendan. "Monetary Policy Bazooka Unleashed," China Last Night. 24 September, 2024.
- Ahern, Brendan. "The PBOC Draws A Line In The Sand On Stock Market Support," China Last Night. 2 November, 2026.
- Data from Wind as of 31/Mar/2026.
Definitions:
Shanghai Composite Index: The Shanghai Stock Exchange Composite Index is a capitalization-weighted index. The index tracks the performance of all A-shares and B-shares listed on the Shanghai Stock Exchange. The index was launched on July 15, 1991.
Five China-listed Domestic ETFs that tend to be favored by the National Team: 510300, 510310, 159915, 588000, 510050.
