Last week, from August 24th to August 30th, market sentiment took a defensive turn, as evidenced by the flow of funds into exchange-traded funds (ETFs). Data from Wind shows that five categories of index funds—broad-based ETFs, money market ETFs, interest rate bond ETFs, credit bond ETFs, and commodity ETFs—each saw net capital inflows exceeding 2 billion yuan during this period. Conversely, thematic industry ETFs and cross-border ETFs experienced net outflows of more than 3 billion yuan.

Digging deeper into the sector-specific funds, five thematic ETFs—covering securities companies, SSH gold stocks, robotics industry, power grid equipment, and CSI banks—each saw net outflows surpassing 500 million yuan, with a combined total outflow of over 7.5 billion yuan. However, three specific areas bucked the trend and attracted significant capital: semiconductor materials and equipment, non-ferrous metals, and the tech-focused semiconductor materials and equipment segment, which collectively drew in net inflows of 3.222 billion yuan. Despite the broader sector still undergoing corrections, semiconductor equipment ETFs have now recorded net capital inflows for two consecutive weeks.

Looking at individual ETFs, the top five funds by net capital inflow were the Yinhua Rili ETF, E Fund ChiNext ETF, China Southern CSI 500 ETF, Guotai CSI Semiconductor Materials & Equipment Theme ETF, and Harvest Tianyi ETF. On the flip side, the highest net outflows were seen in the Guotai CSI All Securities Companies ETF, Yongying CSI HK-Shanghai-Shenzhen Gold Industry Stock ETF, China AMC SSE 50 ETF, Harvest CSI All Securities Companies ETF, and Fullgoal CSI HK Stock Connect Internet ETF.

Although the Shanghai Composite Index posted a gain of over 1% last week, the performance of actively managed equity funds was generally lackluster. According to Wind data, a total of 2,828 actively managed equity funds, representing more than half of all such funds, reported negative returns for the week. Among these, 21 funds saw their net asset value drop by more than 5%, with the Tongtai Big Health Theme A fund performing the worst, posting a return of -6.59%. An analysis of its holdings reveals that the fund's top ten heavy positions in 2025 were primarily in chemical pharmaceuticals and chemical products. However, in the first two quarters of 2026, it shifted its focus towards medical devices and healthcare services, indicating frequent adjustments to its stock picks. Concurrently, the concentration of these top ten holdings as a percentage of the fund's net value has been steadily climbing, rising from 49.11% at the end of the first quarter of 2025 to 74.4% by the end of the second quarter of 2026. Despite the bullish market environment, investors in the Tongtai Big Health Theme fund have been experiencing losses. The fund's semi-annual report indicates that over the past year (from July 1, 2025, to June 30, 2026), only 19.78% of its investors were profitable, a figure representing less than one-fifth.

Regarding new fund issuance, all 16 ETFs that received approval last week are focused on sub-sectors within the ChiNext board. Notably, 10 ChiNext computing infrastructure ETFs and 6 ChiNext fintech ETFs were officially approved on August 28th, a mere three weeks after they were initially filed. However, eight funds from seven different fund companies also extended their fundraising periods last week, a number consistent with the previous week, with Ping An Fund having two funds among them. A total of 71 funds from 46 fund companies released issuance announcements last week, with index funds remaining a priority at 32. Among the issuers, companies like CITIC Prudential Fund, Yinhua Fund, Penghua Fund, Huatai-PineBridge Fund, GF Fund, and Fullgoal Fund each had three or more products on the list. Thirty-three new funds entered their fundraising stage, with both veteran billion-yuan fund managers and newcomers competing for investor capital. For instance, Huatai-PineBridge Fund's notable manager Tan Hongxiang has been appointed to manage the Huatai-PineBridge CSI All Securities Aerospace & Defense ETF Feeder Fund A, while China Merchants Fund's Wang Qichao, who has just 0.33 years of public fund management experience, is set to manage the China Merchants Value Select fund.

The public fund industry continued to see high-frequency personnel changes last week, with a total of 35 fund managers stepping down from their fund duties. Among them, nine fund managers made complete exits, including Wang Dongxuan from Jiahe Fund, Xia Yu from ICBC Credit Suisse Fund, Wang Yijun from Harvest Fund, Cheng Fang from Changxin Fund, Cai Guodong from Bank of China Fund, Lin Lihe from HFT Fund, Yang Xu from Shanxi Securities Asset Management, Zhong Shuai from China AMC, and Huang Ding from Bank of Communications Schroders Fund. In terms of senior executive changes, four fund companies—Neuberger Berman Fund, ABC-CA Fund, Lord Abbett Fund, and Changan Fund—announced changes involving positions like deputy general manager, compliance officer, and general manager. On August 24th, Changan Fund announced that its former general manager, Sun Yewei, had departed due to a work adjustment, with Li Ye assuming the role. This follows the completion of an equity change and a new chairman taking office, marking a full reshuffling of the company's top management. On August 26th, Zhai Aidong stepped down as the compliance officer of ABC-CA Fund upon reaching retirement age, and the current general manager, Sun Jiankun, has been appointed as his interim replacement. Interestingly, Sun Jiankun himself only joined the company in June of this year. On August 28th, Lord Abbett Fund announced that Shen Dongjie had resigned as compliance officer for personal reasons, with Liu Xiang, the company's director and general manager, taking over the duties on an interim basis. Finally, Neuberger Berman Fund executed a significant executive reshuffle, appointing and removing five senior executives in one go. Xu Yixian stepped down as deputy general manager, Wei Xiaoxue transitioned from deputy general manager to focus solely on investment management, and Zhao Danian moved from his risk management role to other investment management duties. All these departures were attributed to internal work adjustments. Concurrently, Yuan Minqiang and Huang Endian were appointed as deputy general manager and head of risk control, respectively.