Overview
Regulators and institutions report that since the start of 2026, long-term funds including social security, annuities and insurance have net bought A-shares worth over 600 billion yuan, with their holdings of free-float market cap up 12.5% from end-2025. Meanwhile, the STAR Market posted H1 revenue of 1.01 trillion yuan and net profit of 144.9 billion yuan, up 38.6% and 437.6% yoy, underscoring tech-sector earnings resilience.
Background & Interpretation
1. Macro and Policy Context
Within a “domestic-priority” framework, regulators keep widening the channel for long-term capital. The CSRC has pledged to broaden its sources and entry modes. By end-August, onshore ETFs reached 1,647 listings with 4.96 trillion yuan in assets; long-term funds account for nearly 50% of Shanghai ETF scale.
2. Core Drivers and Mechanism
Long-term money is counter-cyclical and steadies volatility. Its inflows improve supply-demand structure, compounded by buybacks (repo disclosure cap 224.3bn yuan YTD) and interim cash dividends (716.8bn yuan proposed), reinforcing the base from both funding and return sides.
3. Market Structure and Impact
STAR Market “toolbox” keeps expanding with chip and AI themed ETFs channeling capital to innovation; 640 foreign institutions conducted 5,949 A-share surveys YTD, signalling international recognition of China asset resilience.
Implications & Outlook
Long-term inflows are a slow variable but cumulatively lower volatility and lift pricing efficiency. Watch insurance equity caps, ETF subscription pace, and STAR earnings durability.
Takeaways for Industry Participants
Asset managers should capture the “long-money, long-invest” dividend by optimising duration and equity exposure. Listcos should win long-term capital via buybacks, dividends and real earnings. Retail investors should de-emphasise short-term trading and focus on fundamentals.
This column compiles industry information and shares technical perspectives; it does not constitute investment advice.