Investors poured £3bn into China funds in week before plunge

Chinese funds saw the largest weekly inflows since 2008 this week, with hot money flowing into Chinese A-shares ETFs, before the 6.5% correction seen in the market yesterday.

China equity funds attracted $4.5bn (£2.9bn) in the week ending 28 May, according to a report by Bank of America Merrill Lynch, marking the largest weekly inflows since April 2008. The flows follow on from the huge rally in the mainland market seen over the past 12 months - a rally which suffered a significant setback yesterday. Having risen 50% year to date, the runaway Shanghai market suffered a 6.5% drop on Thursday, with Hong Kong's Hang Seng dropping 2%. The Shanghai Composite is still on a downward trajectory today, trading 0.2% down at 4,612. However, over 12 months the inde...