Investors pull out of China A-share ETFs

China bicyclesExchange-traded funds (ETFs) listed in China and investing in China A-shares had a net outflow of $11.6 billion in April, a sign of profit-taking after a rally.

The outflow pushed overall flows for Chinese equity ETFs to a negative net $7.7 billion, the outflows from A-share products far exceeding a net inflow of $3.9 billion to China H-share products and other share classes.

China H-shares are listed in Hong Kong and are accessible to global investors, whereas A-shares are listed on the mainland and are only accessible to foreigners via schemes such as the Qualified Foreign Institutional Investor programme, and the Shanghai-Hong Kong Stock Connect.

Asset manager BlackRock, which produced the data in its Global ETP Landscape report, says the inflow to China H-shares is because these stocks "have not participated as heavily in the mainland listed A-Shares rally and now trade at a discount".

The Shanghai Stock Exchange A Share index, which gained more than a third in the first four months of the year, fell in the first week of May, though it has since begun to recover.

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