BNY data shows institutional inflows into Chinese equities persist as valuations near multi-year lows amid policy support expectations.
Chinese equities have declined 15–16% this year, yet institutional investors continue to increase exposure, according to flow data. Holdings remain above long-term averages despite recent weakness, offsetting losses with new purchases.
The Hong Kong China Enterprises Index sits in a bear market, but valuations have fallen near the eighth percentile of their 2026 range. Holdings fluctuated between 10% and 18% above their 12-month average, reflecting elevated but not underweight positions.
Major China ETFs trade 20% below year-to-date highs and 12% under 200-day moving averages, signaling oversold conditions. Resilient exports and potential policy support are cited as catalysts for the buy-the-dip stance.