China’s state-backed “National Team” investors are on track to cut their domestic equity ETF holdings by about 90% in the first half of 2026, according to calculations.
The group, led by Central Huijin Investment Ltd., has already sold roughly $170 billion worth of equity ETFs this year.
Around $30 billion of those ETF sales have taken place since the start of April alone, showing the pace of the reduction has remained strong.
The selling is widely seen as an effort to cool excessive market optimism and reduce concerns about frothy valuations in Chinese stocks.
While the large scale ETF redemptions have weighed on the benchmark CSI 300 Index, the sales have also pushed the National Team’s holdings in several ETFs below the 20% disclosure threshold.
Analysts say moving below that threshold reduces future selling pressure on the market and allows further transactions to remain undisclosed in upcoming first half 2026 filings.
Despite the massive ETF selloff, market liquidity remains healthy, supported by strong retail investor participation, rising non-bank institutional deposits, and continued net buying by overseas investors.
China State Funds Sell $170B in ETFs as China Targets 90% Portfolio Cut
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