Chinese ADRs and ETFs jumped on Monday. Pony AI up 8%; CWEB, YINN, Alibaba up around 5%; Bilibili, CHAU up over 4%; JD.com, Li Auto, PDD up over 2%.

Goldman Sachs Group Inc. said global hedge funds were last month the most active in onshore equities in recent years — a stark contrast to 2021, when some clients had deemed the market “uninvestable.” Pacific Investment Management Co. said investors are now more concerned about missing out than risks. Official data show foreign inflows rising across asset classes, a coordinated advance that’s only happened in three of the past 10 years.

Taken together, these are signs of a turnaround for a market that had fallen out of favor with global investors amid prolonged regulatory crackdowns and a spiraling property crisis. This year’s $2.7 trillion equity rally onshore has proven too compelling to ignore, and global funds’ still-underweight positioning suggests ample room to build exposure.

“Global investors have been growing notably more interested in Chinese assets,” said Joseph Zhang, a portfolio manager for Fidelity International, who has been increasing holdings in the market. “This year is different in the sense that the revaluation of Chinese assets is no longer a policy-fueled frenzy but driven by better fundamentals. Investor confidence will likely grow stronger.”