Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **China Equity Strategy** and the performance of **A-shares** in the context of foreign fund flows and market liquidity in China and Hong Kong [1][12][13]. Core Insights and Arguments - **Foreign Inflows**: Foreign inflows into Chinese equities moderated to **US$2.2 billion** in October, down from **US$4.6 billion** in September. This was influenced by **US$3.2 billion** inflows from passive funds and **US$1.0 billion** outflows from active funds [1][12]. - **Year-to-Date Performance**: As of October 31, cumulative foreign long-only fund inflows improved to **US$8 billion**, a significant recovery from the **US$17 billion** outflow recorded in 2024. Passive inflows reached **US$21 billion**, surpassing the **US$7 billion** in 2024, while active outflows totaled **US$13 billion**, down from **US$24 billion** in 2024 [12]. - **Market Sentiment**: The report indicates a weakening retail participation in A-shares, with declines in new account openings and net inflows from small orders. Onshore mutual fund AUM growth for equity and hybrid funds sharply slowed, while money market fund AUM remained stable [12][21]. - **Sector and Company Adjustments**: Active fund managers increased their overweight positions in **Capital Goods**, **Insurance**, and **Materials**, while trimming positions in **Media & Entertainment** and **Consumer Services**. Notably, **CCB** and **Ping An Insurance** were added to portfolios, while **Alibaba** and **Tencent** saw reductions [12]. Additional Important Insights - **Retail Investor Activity**: Retail investor activity in A-shares weakened in October, with new SSE account openings dropping to **2.3 million** from **2.9 million** in September. The daily average net inflow of small A-share orders decreased to **Rmb29 billion** from **Rmb34 billion** in September [21][24]. - **Private Fund Growth**: Onshore private fund AUM growth normalized after a surge in July, with total AUM reaching **Rmb6.0 trillion**. The growth rate slowed to **Rmb36 billion** in September from **Rmb325 billion** in July [25][27]. - **Foreign Passive Fund Flows**: There was a notable outflow from foreign passive funds tracking the CSI 300 in October, reflecting ongoing uncertainties in US-China relations [33][12]. This summary encapsulates the key points from the conference call, highlighting the current state of the Chinese equity market, fund flows, and investor behavior.