- The report focuses on the allocation of Northbound funds in the banking sector for Q2 2025, highlighting that the total market value of A-shares held by Northbound funds is approximately 2.29 trillion yuan, an increase of about 53.178 billion yuan compared to Q1 2025[2][4][14] - Northbound funds are underweight in the banking sector relative to the CSI 300 Index, with a configuration ratio of about 11.09% in banks compared to 15.71% in the CSI 300, resulting in an underweight of approximately 4.62%[2][4][16] - After stripping out the impact of industry price changes from Q1 to Q2 2025, the net inflow of Northbound funds into secondary banking sectors was calculated, showing that the most held were joint-stock banks, followed by state-owned banks, with the highest net inflow into city commercial banks[4][19][20] - The top five secondary industries with the highest net inflows of Northbound funds in Q2 2025 were semiconductors, securities and futures, new energy vehicle equipment, pharmaceuticals, and communication equipment[5][20][22] - Conversely, the top five secondary industries with the highest net outflows were home appliances, liquor, components and parts, industrial control and automation, and display devices[5][22][24] - The report concludes that Northbound funds did not show a significant trend of chasing high-performing industries during Q2 2025[5][26][27]