UBS Foreign Fund Q1 China Stock Market Position Update: Overall Investor Underweight Level has Slightly Decreased

According to the Wise Finance APP, in the first quarter of 2025, the underweight position of international investors in Chinese stocks has eased, with the overall underweight position narrowing from -1.9% to -1.5%, indicating some capital inflows. Among them, Asian funds have become overweight, while global and emerging market funds continue to be underweight, but the extent of reduction has decreased. At the same time, record inflows of southbound funds (56 billion US dollars) have been seen, mainly invested in internet, financial and technology sectors, driving H shares to outperform A shares. At the industry level, foreign investors have increased holdings in the automobile, healthcare and real estate sectors, while reducing holdings in renewable energy and defensive sectors, reflecting the market's differing expectations for economic recovery and policy support.