Analysis of the Impact of RMB 45 Billion Public Fund Inflows on the A-share Market

Based on the latest market data, as of early January 2026, the expected scale of public funds entering the market exceeds RMB 45 billion, mainly consisting of two parts[1]:

Fund Type	Scale	Proportion	Characteristics
22 Equity ETFs	RMB 6.345 billion	~14%	Individual investors hold over 90% of the shares
Active Equity Funds in Positioning Period	Nearly RMB 40 billion	~86%	Rebounded after Q3

Among them, a total of 66 active equity funds established since November 2025 have raised a combined scale of approximately RMB 38.735 billion, showing obvious positioning characteristics[1].

According to CICC’s forecast data, 2026 will see large-scale time deposit maturities[1]:

• 2-year time deposits maturing
  : RMB 20.7 trillion (RMB 4 trillion more than 2025)
• 3-year time deposits maturing
  : RMB 9.6 trillion
• 5-year time deposits maturing
  : RMB 1.3 trillion

Guosen Securities’ research shows that based on the ratio of household deposits to GDP, household excess deposits were close to RMB 30 trillion as of Q3 2025, providing a huge potential capital pool for the A-share market[2].

Against the current low interest rate environment, the yield of time deposits continues to decline, and some risk-tolerant households have begun to seek investment channels with higher returns:

• Recovering risk appetite
  : The bull market since September 2024 has significantly restored investor confidence
• Wealth effect emerging
  : The Shanghai Composite Index has returned to 4,000 points, and the profit-making effect has attracted off-market capital
• Improved product attractiveness
  : ETFs and active equity funds have become the main carriers for household capital to enter the market

Multiple institutions are optimistic about the 2026 incremental capital for A-shares[3][4]:

Forecasting Institution	Forecasted Scale	Main Sources
Guosen Securities	~RMB 2 trillion	Retail investors, insurance funds, public funds, foreign capital
Changjiang Securities	RMB 6-9.6 trillion	ETFs, private funds, primary market, active funds
JPMorgan Chase	Significant inflows	Households, private equity funds, ETFs

• Continuous inflow of insurance funds
  : Policy support for lowering investment risk factors has released the vitality of insurance fund allocation, with an expected annual inflow of RMB 700 billion[2]
• Continued passive investment trend in ETFs
  : The scale of equity ETFs reached RMB 3.84 trillion in 2025, with an annual increment of RMB 950 billion, and the ETF track continues to expand[1]
• Foreign capital return expectation
  : As the world enters an interest rate cut cycle, international capital is expected to rotate to emerging markets[3]

• Short-term profit-taking pressure
  : On January 7, 2026, equity ETFs saw net outflows of over RMB 12.6 billion[5]
• Household risk appetite recovery still takes time
  : Current incoming capital is mainly from high-net-worth individuals, and large-scale entry of ordinary household capital remains to be observed[2]
• Rotation from bond fund redemptions to equity fund subscriptions
  : Bond funds have seen frequent redemptions recently, and capital is shifting to equity products[5]

The inflow of RMB 45 billion in public funds will bring the following to the market:

• Liquidity support
  : Provide continuous incremental capital inflows to A-shares, easing market supply-demand pressure
• Structural opportunities
  : ETF capital prefers hot tracks such as technology, AI, and Hong Kong-listed internet
• Valuation support
  : Continuous institutional capital inflows provide a valuation floor for high-quality targets

Based on the analysis of capital dynamics, it is recommended to focus on the following areas:

Focus Area	Rationale	Key Targets
Technology Growth	Main force of ETF positioning and policy support	AI, semiconductors, satellite industry
Stock Connect Targets	Continuous net capital inflows	Internet, technology leaders
Dividend Assets	Insurance fund allocation demand	High-dividend stocks, banking, energy

1. Sustainability of the “deposit shift” trend
   : The large-scale time deposit maturities in 2026 will provide approximately RMB 20 trillion of activatable capital. If 10%-20% of this flows into the equity market, it will form sustained capital support

2. Maintenance of the profit-making effect
   : The speed and scale of household capital entry will be highly correlated with market performance, and the continuation of the “spring rally” is crucial

3. Sustained inflow of institutional capital
   : Incremental capital from insurance funds, foreign capital, and ETFs will be an important support for market stability

Overall, against the backdrop of continuous recovery of household risk appetite and sustained policy support,

, and the “deposit shift” trend will provide medium-to-long-term capital support for the market. However, attention should be paid to short-term capital volatility risks and structural challenges brought by increased difficulty in technology investment[1].

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[1] Securities Times - “RMB 43 Billion! Public Funds’ New Year Inflows Arrive” (https://www.stcn.com/article/detail/3568522.html)

[2] Sina Finance - “Guosen Strategy: 2026 Incremental Capital into A-shares is Expected to Exceed RMB 2 Trillion” (https://www.xincai.com/article/nhfrzuc0789116)

[3] Securities Times - “Domestic and Foreign Capital Resonance Expected: Chinese Stocks May Witness an ‘Incremental Capital Wave’ in 2026” (https://www.stcn.com/article/detail/3552575.html)

[4] Sina ETF Hot Topics - “Equity Funds Close Subscription Early, Bond Funds See Frequent Redemptions; Institutions: Subsequent Incremental Capital Inflows Expected” (https://cj.sina.cn/articles/view/7857201856/1d45362c001901h362)

[5] China Fund News - “Equity ETF Market Sees First Over RMB 10 Billion Net Outflow at the Start of the Year” (https://www.chnfund.com/article/ARefdcc1f6-255d-f5de-32ce-3a1eae6f66a1)