China's ETF market surges over 50% in 2025, hitting record high

China's exchange-traded fund (ETF) market has skyrocketed past 5.78 trillion yuan ($820 billion) in assets under management this year, fueled by strong retail participation and regulatory tailwinds.

Data from financial information provider Wind shows that as of December 19, the total scale of China's onshore ETFs surged by over 2 trillion yuan year-to-date, marking a growth rate exceeding 53 percent.

The pace of expansion was noteworthy, taking just four months in 2025 for ETFs to jump from 4 trillion to 5 trillion yuan. In stark contrast, the initial journey from zero to the first trillion took 14 years.

"For individual investors, ETFs provide one-click access to a basket of key stocks in a target sector, directly addressing the challenges of stock-picking and high research costs," said Yao Ziwei, chief analyst at China Securities.

On the policy front, China issued a sweeping nine-point guideline last year, outlining a blueprint for the long-term development of its capital markets, which included a fast-track approval channel for ETFs.

The boom isn't limited to ETFs. The market for Fund of Funds (FOFs) also had a breakout year. As of December 17, 79 new FOFs were launched in 2025, raising a combined 80.35 billion yuan. This single-year fundraising volume surpassed the aggregate total of the previous three years.

From an industry perspective, ETFs and FOFs have accelerated their strategic focus on the technology sector in 2025, channeling long-term capital into hard-tech fields to fuel innovation and industrial upgrading.

Analysts noted that sustained institutional inflows via these products help reduce market volatility and foster a more mature, rational investment environment.

Yao highlighted that products like the STAR 50 ETF offer retail investors access to hard-tech growth while also acting as a key stabilizer and source of long-term capital for the STAR Market.