With A-shares surging above 3,800 points, positive signals are emerging from both overseas hedge fund and public fund inflows. Goldman Sachs data reveals that China has been the market with the highest net buying activity by hedge funds since August.

**Goldman Sachs Data Shows China Leading Hedge Fund Net Purchases**

Goldman Sachs released a research report on August 22 indicating that over the past week, institutional investors sold emerging markets in Asia (excluding mainland China) worth $4.8 billion. During the same period, emerging markets outside Asia also experienced net selling by institutional investors, with South Africa seeing outflows of $270 million.

Data from asset management research firm EPFR shows that as of the end of July, Indonesia and Thailand were the most overweight markets in emerging market funds. In July, mainland China and India saw the largest increases in allocation.

In July, global actively managed public funds also increased their allocation to the Chinese market. As of the end of July, China accounted for 6.6% of global actively managed public fund portfolios, positioning it at the 15th percentile over the past decade. Compared to benchmarks, funds were underweight China by 320 basis points.

Regarding hedge funds, as of August 20, hedge funds accelerated net purchases of Chinese stocks at the fastest pace in seven weeks, with buying driven by both long positions and short covering. Goldman Sachs prime brokerage data indicates that China has been the market with the most net buying by hedge funds since August.

Both EPFR and Goldman Sachs Research data show that from August 14 to August 20, Chinese equity fund flows turned positive. During the week ending July 30, outflows reached $1.1 billion, followed by outflows of $1.2 billion and $700 million in the subsequent two weeks. However, by the week ending August 20, flows turned positive with inflows of $1.2 billion.

**MCHI Becomes Top "Money Magnet" Among US-Listed Asia-Pacific ETFs Last Month**

Compared to active funds, passive funds moved more quickly. According to ETF.com data, over the past week, among the top 10 net inflow products from over 130 US-listed Asia-Pacific ETFs, Chinese ETFs occupied five positions.

Specifically, for the week ending August 21, MCHI was the strongest "money magnet" among US-listed Asia-Pacific ETFs, attracting $226 million. This ETF is issued by BlackRock's iShares and tracks the MSCI China Index. Following closely was KWEB, attracting $183 million. This ETF is issued by KraneShares and tracks the CSI Overseas China Internet Index. Additionally, EWY, which tracks the MSCI South Korea Index, attracted $87.48 million, FXI, which tracks the FTSE China 50 Index, attracted $69.06 million, and EIDO, which tracks the MSCI Indonesia Index, attracted $35.17 million.

Over a longer timeframe of one month, MCHI showed the strongest attraction for funds, with KWEB ranking second.

**Korean Investors Actively Purchasing A-Shares and Hong Kong Stocks**

Over the past week, Korean retail investors continued buying Hong Kong stocks and A-shares. From August 16 to August 22, Hong Kong stocks with the highest net purchases by Korean investors included Xiaomi Corporation-W, Cathay Pacific Airways, Chow Tai Fook Jewellery, Alibaba Group-W, POP MART, Industrial and Commercial Bank of China, Li Ning, and China Railway Group.

Net purchases included $4.87 million in Xiaomi Corporation, $4.72 million in Cathay Pacific Airways, $3.94 million in Chow Tai Fook Jewellery, $2.02 million in Alibaba Group-W, and $2.02 million in POP MART.

From August 16 to August 22, A-shares with the highest net purchases by Korean investors included Zhongji Innolight, Shuanghuan Driveline, E Fund CSI Consumer Staples ETF, Agricultural Bank of China, Will Semiconductor, Zijin Mining Group, China Merchants Bank, Naura Technology Group, iFLYTEK, and Midea Group.

Net purchases included $3.51 million in Zhongji Innolight, $1.50 million in Shuanghuan Driveline, $1.32 million in E Fund CSI Consumer Staples ETF, $1.08 million in Agricultural Bank of China, $1.01 million in Will Semiconductor, $803,100 in Zijin Mining Group, $666,400 in China Merchants Bank, $559,100 in Naura Technology Group, $521,700 in iFLYTEK, and $489,800 in Midea Group.

During the same period, the top three Japanese stocks with net purchases by Korean investors were Japan Electronic Materials Corporation, MITSUI ES, and SBI Holdings, with net purchases of $1.57 million, $1.27 million, and $1.26 million, respectively.

Comparing stocks with similar net purchase amounts, Korean investors' net purchases of Chinese stocks exceeded those of Japanese stocks.

Data from SEIBro under Korea Securities Depository shows that as of August 22, Korean investors' trading volume in Chinese stocks reached $6.693 billion, making it Korea's second-largest overseas market.

Morgan Stanley China Chief Equity Strategist Laura Wang stated in an interview on August 22 that A-share strength is expected to continue. "Compared to the initial reopening period and October last year, this round of market performance is different: First, currently, both 10-year and 30-year government bond yields have risen, indicating that investors' views on macroeconomic fundamentals have changed; Second, 'anti-involution' policies have been implemented, and price pressures in related industries are expected to ease, with this policy serving as the foundation for changing investor sentiment."