MSCI Global Index has massively added Chinese companies, will passive funds start a new round of

# By Xu Chao

Largest-scale Inclusion in Nearly Three Years! MSCI Substantially Adds Chinese Stocks, with 21 Net New Companies; Tech Stocks Take the Lead.

The move not only opens a window for passive fund inflows but also forces global funds to revalue Chinese assets. With rising weights for AI and innovative enterprises, China’s stock market is at a critical juncture of a new round of capital inflows and structural transformation.

Chinese stocks are set for the largest MSCI index inclusion in nearly three years. The adjustment will not only bring direct capital inflows but also likely prompt global active funds to re-examine the allocation value of the Chinese market.

MSCI announced on Tuesday that it would add 37 Chinese companies to its Global Standard Indexes in the latest review, while removing 16, representing a **net increase of 21**.

This marks the largest expansion of Chinese stocks by the index provider since May 2023.

The adjustment provides fresh support for China’s equity market, which has staged an unexpected rebound since last year.

A higher index weighting means passive investors will mechanically increase their holdings of Chinese stocks, and active funds may also reassess their exposure to the world’s second-largest stock market.

Notably, **technology companies dominated the new additions**, while multiple consumer names were removed.

This highlights investors’ sustained focus on artificial intelligence and innovation-related firms, as well as the ongoing structural shift in China’s market.

## Largest Inclusion in Nearly Three Years

According to data compiled by Bloomberg, the net addition of 21 Chinese companies marks a three-year high for MSCI, with the last comparable wave dating back to May 2023.

The shift will directly affect passive funds tracking MSCI indexes.

“This increase in weighting could be the start of a trend for some time to come,” said Jun Bei Liu, co-founder and chief portfolio manager at Ten Cap Investment.

She added that it could “trigger more buying of Chinese equities.”

The appeal of China’s stock market is strengthening.

Against a backdrop of cooling enthusiasm for U.S. assets, China’s technological progress and trade resilience are drawing renewed attention from global investors.

A higher index weighting may push active fund managers to revisit their China positioning.

## Tech Stocks Lead New Additions

Technology firms took center stage among the newly included companies.

The list features semiconductor product manufacturer **AMEC (Advanced Micro-Fabrication Equipment Inc. China)**, autonomous driving technology provider **Pony AI**, and quantum information products manufacturer **Quantum CTIC**.

Meanwhile, several consumer companies were removed from the indexes.

The shift reflects the current focus of investor interest: artificial intelligence and innovation-related sectors remain the primary targets for capital.

Hao Hong, Chief Investment Officer at Lotus Asset Management, noted that more companies will be included going forward, as “new growth comes from emerging industries.”

“Global investors should increasingly look to the mainland Chinese market for genuine growth opportunities,” he said.

Source: Wallstreetcn

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