At the beginning of 2026, China's public fund industry has reached a crucial milestone—the total size of cross-border ETFs (Exchange Traded Funds) across the entire market has historically surpassed the one trillion yuan mark. According to Wind data, as of January 14, the total size of cross-border ETFs reached 1,016.421 billion yuan.
As a core instrument connecting domestic and international capital markets, cross-border ETFs have evolved from a "peripheral allocation" to a "major channel" for residents' global asset allocation. The breakthrough of their size exceeding one trillion yuan not only confirms the explosion in demand for residents' globalized allocation but also marks a critical leap for the public fund industry in transitioning from local operations to becoming a global asset management participant.
The momentum for the scale leap is robust. Since the start of the year, driven by the global technology wave, the average growth rate of cross-border ETFs has reached 5.9%, with an average increase of 37% over the past year, with Hong Kong stock-related products generally leading the performance. In terms of net fund inflows, from the beginning of 2026 to now, just two products—GF China Securities Hong Kong Stock Connect Non-Bank Financials ETF and Fullgoal China Securities Hong Kong Stock Connect Internet ETF—have together seen net inflows exceeding 10 billion yuan.
Yang Delong, Chief Economist at Qianhai Open Source Fund, stated that the recent breakthrough of cross-border ETF size beyond one trillion yuan is mainly due to the strong performance of overseas markets, represented by the Hong Kong market, particularly significant gains in popular sectors like artificial intelligence and innovative drugs, which have attracted substantial attention and allocation of funds.
Currently, there are already 26 cross-border ETFs with sizes exceeding ten billion yuan, among which four leading products, including ChinaAMC Hang Seng Tech ETF (QDII), have each surpassed the 40 billion yuan mark. According to the 2025 interim reports, the average number of cross-border ETF holders reached 26,300, with the highest nearing 400,000, making them a core tool for "one-click global allocation" for many investors.
Tian Lihui, a Finance Professor at Nankai University, said that in promoting global allocation for domestic investors, cross-border ETFs offer advantages such as starting investments from 100 yuan and T+0 trading, enabling ordinary investors to access global markets at low cost. Surpassing the trillion-yuan scale truly achieves "investing globally without leaving home." Their core value lies in building a compliant and efficient bridge for residents' wealth to "go global," effectively bringing overseas markets into ordinary accounts through the fund format, allowing domestic investors to share in the dividends of global industries like AI and innovative drugs with one click.
Rational allocation has become key. Along with the scale and popularity come risk concerns that cannot be ignored. Wind data shows that as of January 15, there are over 200 cross-border ETFs in the entire market, with an average IOPV (Indicative Optimized Portfolio Value) premium/discount rate of 0.42%. Among them, several products investing in U.S. and European markets show significant premiums, with the highest exceeding 20%.
Yang Delong indicated that this combination of "high valuation" and "high premium" factors means that asset prices already incorporate considerable optimistic expectations, potentially leading to price volatility risks in the future due to expectation adjustments or changes in liquidity.
Zeng Fangfang, Public Fund Product Operations at Shenzhen Qianhai Paipaiwang Fund Sales Co., Ltd., stated in an interview that the trillion-yuan breakthrough in cross-border ETF size is a key milestone in the internationalization process of the public fund industry. This not only confirms the increasing demand for global asset allocation among residents, significantly lowering the threshold for overseas investment, but also provides an efficient "voting mechanism" and a two-way circulation channel for connecting Chinese assets with global capital.
Cui Yue, an analyst at Morningstar (China) Fund Research Center, suggested that the operation of cross-border ETFs involves complex factors like cross-market, cross-time zone, exchange rates, and foreign exchange quota controls, requiring ordinary investors to fully understand their特殊性. For some products, due to low subscription/redemption efficiency and quota limitations, the arbitrage mechanism struggles to function effectively, leading to persistent premiums. Investors buying during high-premium phases may face additional losses.
Looking ahead, Zeng Fangfang said that as the globalization level of the public fund industry gradually improves, this trend will strongly drive fund companies to upgrade their cross-border capabilities and innovate products. In terms of investment research, public fund institutions need to strengthen their research on overseas markets and multi-currency operation capabilities, while expanding deep coverage of emerging markets and global sectors like AI and innovative drugs. In terms of product lines, the industry will extend from broad-based ETFs to segmented themes, improving the matrix of active and passive products, and gradually building a global product ecosystem covering both mature and emerging markets and spanning the entire industrial chain.
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