BEIJING, Feb. 1 (Xinhua) -- Stock exchange-traded funds (ETF) in China encountered more than 10 billion yuan net liquidity outflows due to the volatile equity market in January, reported sector portal www.Chinafund.com Monday.
Statistics with Wind, a financial data service provider in China, showed that there were eighteen stock ETFs that each saw more than one billion yuan of net fund outflows in January, including sixteen broad-based stock ETFs and stock ETFs investing in science and technology-driven enterprises.
Contrary to the welcomed stocks of Hong Kong-listed companies, military industry-related firms and securities brokers, major broad-based stock ETFs and ETFs investing in semiconductor-related stocks weathered net fund outflows last month.
Market players said that most broad-based stock ETFs suffering net liquidity outflows in January hinted that rational investors had chosen to take profit after valuations of main broad-based stock indexes such as the SSE 50 Index, CSI 100 Index, CSI 300 Index and CSI 800 Index basically reached their past peaks in the 2015 bull runs.
When the stock market volatility notably rises, the fund flows that a majority of investors often take as references for their investment decision making always diverge.
The diverged fund flows for stocks of military industry-related firms, securities brokers and science and technology-driven companies pointed to such market consensus as the following future of China's stock market is expected to be characterized by structural bull run, in particular when the increasing fluctuations in communication, electronics and semiconductor sectors indicated start of fund withdrawal by investors.
By far, mainstream broad-based stock indexes on China's A-share market have no explicit value worthy of further investment, held market watchers. As they added, the opportunity costs to fetch further gains from the stock market are large as the driving force behind is very weak in view of the not low valuation of the CSI 100 Index and SSE 50 Index and low valuation but extremely diverged constituent stocks of CSI 500 Index and CSI 1000 Index.
China Securities Index Company Limited (CSI), a joint venture between the Shanghai Stock Exchange (SSE) and the Shenzhen Stock Exchange (SZSE), is a leading index provider in China. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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