Medium- and long-term funds will continue to flow into the capital market in the second half of the year (H2), as social security funds and qualified foreign institutional investors are ramping up their investments in A-shares, according to experts.

Industry experts suggest that the recent surge in long-term capital entering the market is driven by a combination of supportive policies, an improved market environment, and ongoing industrial upgrades and transformations.

"In January this year, six government departments jointly released a plan for promoting medium- and long-term funds into the capital market. This plan not only encourages five key categories of medium- and long-term funds to boost their equity investments but also establishes a long-term evaluation mechanism that facilitates investment. From a global perspective, A-shares continue to show a notable advantage compared with peers in major markets, creating a 'magnetic effect' that attracts cross-border capital back," said Chen Yanbing, senior strategy analyst with China Asset Management Company Limited.

Experts expected that medium- and long-term capital will continue to flow in, providing vital support for the market.
"Key layouts should be focused on premium technology assets and dividend-generating assets. The biggest opportunities ahead will stem from China's economic transformation and the global advancements in technology. Quality tech assets are likely to demonstrate strong and sustainable profitability, serving as a key source of our investment returns. Therefore, it's essential to focus our allocations on these assets," said Cheng Yu, a manager at Allianz Global Investors Fund Management Company.