Latest data from the State Administration of Foreign Exchange reveals that as of the end of July, cumulative net subscriptions for northbound funds - flagship products sold by Hong Kong fund houses in the mainland - stood at 108.43 billion yuan, down from 125.19 billion yuan at the end of last year. This translates to net redemptions of 16.75 billion yuan over the first seven months, a decline of 13.3%. Looking at July alone, the second half opened on a sour note as northbound funds swung from growth to contraction, shrinking by 760 million yuan or 0.6% compared to June's 109.2 billion yuan figure.

Southbound funds - mainland fund products distributed in Hong Kong - also saw their brief resurgence fade. After breaking a four-month losing streak in June, they slipped again in July, with cumulative net subscriptions of 646 million yuan, down 10.9 million yuan from June's 657 million yuan, representing a 1.6% reversal. The third quarter thus began with both northbound and southbound funds moving into negative territory simultaneously. Over the January-to-July period, southbound funds recorded cumulative net outflows of 31.27 million yuan, down 4.6%.

Cross-border mutual recognition funds first launched in July 2015, marking their 11th year. The persistent pattern of "north-hot, south-cold" has now endured for over a decade, with northbound funds currently holding a lead of 107.76 billion yuan over their southbound counterparts. According to the CSRC annual report, as of March 31, 46 Hong Kong funds had been approved by Chinese regulators for northbound distribution, while 40 mainland funds had received Hong Kong SFC recognition for southbound sales.

Looking ahead, market expectations point to continued weakness for northbound funds through August and September, primarily due to the extraordinary heat in mainland's new stock market. Data shows that since the third quarter of 2026, 30 companies have listed across the Shanghai, Shenzhen, and Beijing exchanges, raising a combined 119.4 billion yuan - the largest quarterly fundraising total since the second quarter of 2023, marking a three-year record. Leading the charge is domestic storage chip giant CXMT Corporation (688825.SH), which raised 66.607 billion yuan, ranking first in fundraising volume.

Morningstar Rankings: Pictet Retains Crown as July's Top Fund Raiser

According to the July "Hong Kong Mutual Recognition Fund Monthly Report" by Morningstar China research analyst Wu Yuening, capital continued flowing toward equity and multi-asset strategies. Among the 17 northbound fund companies tracked in July, six recorded net inflows. Pictet led with 3.961 billion yuan, followed by Morgan with 3.08 billion yuan, Schroders with 1.325 billion yuan, Eastspring with 550 million yuan, Gaoteng with 181 million yuan, and BOC-Prudential with 113 million yuan. CCB International recorded zero flows. Nine companies posted net outflows, with ChinaAMC leading the declines at 1.303 billion yuan, followed by HSBC at 590 million yuan, BOC Hong Kong at 238 million yuan (as of end-June), Haitong at 162 million yuan, Value Partners at 116 million yuan, Amundi at 60 million yuan, Fidelity at 9 million yuan, Hang Seng at 7 million yuan, and UBS at 5 million yuan.

Mega IPOs Arrive in Succession, Siphoning Mutual Recognition Fund Capital

The heavyweight debut leading mainland's third quarter was domestic storage chip leader CXMT Corporation, which opened its subscription on July 16, attracting 7 trillion yuan in bids predominantly from retail investors. The oversubscription ratio for retail tranches reached an extraordinary 212 times, with approximately 9.4 million accounts participating and total subscription demand hitting 7.07 trillion yuan. Including full exercise of the over-allotment option, total fundraising reached 66.6 billion yuan. Within just two weeks of listing, by mid-August, this storage chip giant had surged over fivefold, reaching a market capitalization of approximately 3.54 trillion yuan - briefly surpassing TENCENT (00700) to claim the top spot among China's listed companies by market value.

September brings another blockbuster: Shanghai Enflame Technology Co.,Ltd. (688801.SH), a Tencent-backed member of the "Four Little Dragons of Domestic GPU," debuts on the STAR Market. The stock closed its first day at 397 yuan, up 179% from its IPO price of 142.18 yuan, with a total market value of approximately 170.8 billion yuan. The offering raised 6.12 billion yuan, with an online final allocation rate of 0.02455%, attracting roughly 7.032 million valid subscription accounts and an oversubscription multiple of approximately 6,109 times.

August saw one of the "Six Little Dragons of Hangzhou" - Yushu Technology Co.,Ltd. (688836.SH) - make history as the "first humanoid robot stock" on A-shares. The stock debuted on Shanghai's STAR Market with remarkable strength, opening at 1,100 yuan, which also marked its intraday high, representing a 629.5% surge from its IPO price of 150.8 yuan. At the opening price, investors who secured allocations saw paper gains of approximately 474,600 yuan per board lot (500 shares) - making it the most profitable first-day debut on both Shanghai and Shenzhen exchanges since the full implementation of the registration-based IPO system. The stock's surge propelled founder Wang Xingxing's personal wealth beyond 100 billion yuan, crowning him the new richest person among the post-1990 generation. Additionally, DeepSeek founder Liang Wenfeng, through strategic placement and offline subscription, secured approximately 1.1916 million shares, with paper gains exceeding 800 million yuan at first-day closing prices. Xiaomi (01810) chairman Lei Jun's Shunwei Capital and Meituan (03690)-affiliated shareholders hold approximately 16.106 million and 35.1236 million shares in Yushu respectively, with paper gains exceeding 11 billion yuan and 24 billion yuan at yesterday's closing prices.

Most recently, mainland saw its highest-priced IPO of the year - Shanghai Frequency Precision Laser (688826.SH) - debut on the STAR Market at an issue price of 186.88 yuan per share. The stock opened at 1,100 yuan, up 489%, and touched a high of 1,300 yuan, representing a 596% gain. At midday, shares were trading at 1,186 yuan, up 534%. One board lot (500 shares) currently shows paper gains of 499,500 yuan, breaking Yushu Technology's record.