TLDR
- Chinese ETFs tracking the S&P 500 and Nasdaq 100 are capping new investor subscriptions due to nearing overseas investment quotas.
- GF Fund Management and E Fund Management have limited daily investments to 10 yuan per investor for their Nasdaq 100 ETFs.
- China Asset Management has fully suspended new subscriptions since late November amid rising investor demand for US exposure.
- The QDII programme’s US$94.3 billion quota restricts overseas investments by Chinese firms, forcing ETF inflow limits.
- The Nasdaq 100 and S&P 500 have outperformed Chinese stocks in 2025, fueling increased foreign equity interest among mainland investors.
Multiple China-listed exchange-traded funds (ETFs) that track US stock indices are now restricting new subscriptions. These measures come as demand for US exposure increases, pushing ETF sizes near their regulatory overseas investment quotas. Major asset managers including GF Fund Management and China Asset Management have implemented or announced subscription controls.
Quotas Pressure ETF Inflows as US Stocks Rally
China’s largest mutual fund companies have initiated caps on their ETFs linked to the Nasdaq 100 and S&P 500 indices. GF Fund Management now limits individual investors to 10 yuan daily for its Nasdaq 100 ETF. E Fund Management has adopted similar restrictions on its comparable ETF product.
China Asset Management has entirely halted new subscriptions since late November. These actions reflect the strong demand from Chinese investors looking to diversify away from domestic equity and property markets. Rising inflows into US stock ETFs have driven fund sizes close to the quotas permitted under the QDII scheme.
Under the Qualified Domestic Institutional Investor programme, fund managers use foreign currency quotas to invest proceeds from yuan-denominated ETF sales. The total QDII quota allocated to money managers and brokerages currently stands at US$94.3 billion. As investor appetite persists, ETF issuers are adjusting access to manage within regulatory boundaries.
Demand for US Equity Exposure Increases
Investor interest in US markets is rising as analysts forecast continued gains in American equities through 2026. Zhang Yidong of Industrial Securities said, “The resilience of US stocks is expected to carry into 2026, and the key driver will come from earnings growth.” He projected a 12 percent S&P 500 gain, driven by AI-led performance and Federal Reserve rate cuts.
Wall Street firms anticipate a third consecutive year of growth for US indices, led by tech stocks and improved earnings. Goldman Sachs expects the S&P 500 to reach 7,600 in 12 months, with 12 percent earnings growth. The forecast includes 7 percent revenue growth and a 70-basis-point profit margin increase.
The Nasdaq 100 has climbed 21 percent this year, while the S&P 500 has gained 17 percent. China’s CSI 300 Index has matched that with 17 percent growth, but the domestic outlook remains mixed. Weak recent data and shifting policy focus may dampen near-term prospects for Chinese equities.
China ETF Market Faces Capacity Constraints
As of this month, China hosts 22 ETFs targeting US stocks, with a combined value of 151.3 billion yuan. The largest is GF’s Nasdaq 100 ETF, holding 29 billion yuan in assets. Bosera’s S&P 500 ETF and Guotai’s Nasdaq 100 ETF follow with US$22 billion and US$16.6 billion, respectively.
Strong US stock performance and an AI-driven rally have intensified foreign allocation demand from Chinese retail investors. However, Beijing restricts direct offshore investments, limiting access to international markets via approved fund vehicles. China ETF providers now balance strong market interest with compliance with capital controls.
China’s restrictions mean mainland investors cannot directly buy US stocks, increasing reliance on QDII-approved funds. With quotas nearing exhaustion, ETF issuers must carefully manage inflows. For now, tight caps or temporary halts remain the primary method to control investment volumes.
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