Aerial view of Nanpu Bridge and Huangpu River in Shanghai Photo: VCG

Overseas China-focused equity funds or emerging market funds have significantly increased their holdings of Chinese companies since the start of 2026, according to media reports, casting a vote of confidence in Chinese assets and the world's second-largest economy in the first year of the 15th Five-Year Plan (2026-30) period.

In January, JP Morgan Asset Management's JP Morgan China Fund doubled its holdings of Chinese companies such as Alibaba, Tencent Holdings, Ping An Insurance and PDD Holdings. UBS Group's UBS China Opportunity Equity Fund increased its holdings of Chinese battery giant CATL by 82.38 percent in January and China Mobile by 7.69 percent, the Shanghai Securities News reported on Monday, citing market data provider Morningstar Data.

In addition, Fidelity International's China Focus Fund increased its holdings of Trip.com Group by 77.37 percent and China Oilfield Services by 74.07 percent in January, according to the report.

Aside from these moves, foreign financial institutions have voiced bullish views on Chinese assets and the nation's economy. 

"Historically, the correlation between A-shares and global stock indices has been among the lowest globally, a point further validated by recent global market volatility. Therefore, holding Chinese stocks, especially A-shares, can generate diversification benefits," Wang Zonghao, head of China equity strategy research at UBS, said in a note sent to the Global Times on Monday.

Various factors will continue to support the A-share market, including high trading volume, supportive policies released during the just-concluded "two sessions," as well as a sustained slowdown in household deposit growth, which may drive household savings into the capital market, Wang noted.

So far this year, portfolio rotation out of crowded trades in the US, Asia ex-Japan (AxJ) equities have outperformed developed markets. But despite the outperformance, AxJ still trades at a significant discount relative to developed market equities, given its superior earnings growth momentum, noted DBS Chief Investment Office Insights for the second quarter of 2026.

DBS analysts expect the outperformance of AxJ will continue, as investors seek to reduce their exposure to US assets and ride the boom in artificial intelligence (AI)-related capital expenditure in Asia.

Yang Delong, chief economist at Shenzhen-based First Seafront Fund, told the Global Times on Monday that the A-share market is gradually shaking off the impact of the crisis in the Middle East and may even continue the spring rally seen in early January.

"Currently, we are in the midst of the Fourth Technological Revolution, the most prominent feature of which is the widespread application of artificial intelligence. In China, local governments have intensively introduced corresponding supportive policies. It is expected that the 'AI+' initiative will become a key focus of policy support in the coming years and a hotspot for investment opportunities," Yang said.

Efforts will be made to comprehensively strengthen capital market risk monitoring this year, Wu Qing, chairman of the China Securities Regulatory Commission, said at a press conference on March 6 during the "two sessions."

Measures will be taken to prevent the transmission of risks across markets, across futures and spot markets, and across borders, and to consolidate and strengthen strategic resource reserves and market stabilization mechanisms, Wu said.