BBH Greater China ETF Investor Survey reveals that the region continues to outpace global ETF growth as investors manage market risk and volatility

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Brown Brothers Harriman

21 May, 2025, 14:07 CST

Demand grows for active ETFs as well as for ETFs offering downside protection

HONG KONG, May 21, 2025 /PRNewswire/ -- Exchange Traded Funds (ETFs) continue to grow in Greater China in 2025, with the region accounting for 71% of the overall record-breaking inflows of $347 billion in Asia-Pacific in 2024[1]. The findings of the 8th Annual Greater China ETF Investor Survey from Brown Brothers Harriman & Co. (BBH), a global leading ETF custodian and administrator, show that during a time of unprecedented market dislocation and uncertainty, investor appetite for ETFs offering downside protection, such as buffered ETFs, is trending upwards. The region's allocators are also registering increased demand for active ETFs.

The Annual Greater China ETF Investor Survey, which is a subset of its Global ETF Investor Survey, represents the opinions of 100 ETF investors from mainland China, Hong Kong, and Taiwan, where 53% of respondents manage over USD$1 billion in assets and of which, 29% have more than 50% of their portfolio invested in ETFs (compared with 24% globally).

"The outsized growth in Greater China demonstrates the strength and depth of the market. As the regional ETF markets have matured and developed, investors are deploying an increasing amount of capital to ETFs. While local ETF issuers have a strong position across Greater China, there are opportunities for international ETF issuers too. To thrive in Greater China, international ETF issuers need to understand the local market nuances," said Chris Pigott, Asia Head of ETF Services at BBH.

Key findings:

Greater China – The region leads the overall Asia-Pacific ETF growth

  • Outsized growth of ETFs in Greater China vs global growth: Appetite for ETFs is particularly pronounced in Taiwan and Hong Kong, where 27% and 23% of allocators respectively have ramped up their ETF holdings by more than 25% in the last five years.
  • Active ETFs gaining traction: All respondents plan to increase their exposures to active ETFs in the next 12 months, 40% of investors in both Hong Kong and Taiwan are planning to bolster their active ETF holdings by more than 25%.
  • Reallocations to fund active ETFs: 22% of ETF investors said they would reduce their exposures to index-based ETFs, followed by actively managed mutual funds (19%) and actively managed SMAs (15%).
  • Reasons for adopting ETFs: 35% of ETF investors are looking for long-term portfolio growth through core exposures. 32% want to provide portfolio outperformance through tactical, niche or narrow/sectors of the market. 20% are looking to manage risks, volatility, and downside protection. Just 13% are buying ETFs in order to generate income.
  • Defined outcome leads the way: 29% of Greater China ETF investors plan to invest in defined outcome – or buffered ETFs – over the next 12 months, rising to 34% in mainland China. 27% plan to invest in fixed income.
  • Increased focus on cryptocurrency ETFs: 26% of investors intend to buy cryptocurrency focused ETFs in 2025, with Taiwan (40%) and Hong Kong (23%) leading the way.

Mainland China – Investors are positive on increasing exposure to ETFs

  • Demand for offshore assets remains strong, with mainland China investors being net buyers of Hong Kong listed ETFs through the Southbound channel in 2024 [2].
  • Mainland investors are most interested in buffered ETFs (34%) and ESG products (20%) if they are going to buy ETFs listed on HKEX in the next 12 months.
  • 40% of investors plan to fund new ETF purchases by redeploying capital from other ETFs.

Hong Kong – Tax efficiency is an important component of the total cost of ownership that investors are increasingly evaluating

  • Hong Kong is one of the most diverse ETF markets in Asia, with flows driven by product innovation, both from the local regulator and the stock exchange.
  • While demand for fixed income is on the rise, it is much more sought after in Hong Kong, where 34% of allocators plan to invest in the strategy.
  • 34% of investors expect the dominance of the Magnificent Seven stocks to continue – this is above the overall response of 26% for Greater China.
  • Tax efficiency is the most important consideration for ETF investors (26%) in Hong Kong.

Taiwan – One of the fastest growing ETF markets in the world, the launch of active ETFs paves opportunities to asset managers

  • 23% of ETF investors in Taiwan are reallocating from active mutual funds in order to grow their ETF allocations.
  • Demand for the launch of active ETFs is high, with 37% and 27% of investors planning to allocate to equity and liquid alternative active ETFs respectively.
  • Structured products, i.e. Collateralised Loan Obligations (CLOs) are popular, with 23% of allocators planning to gain exposure to the asset class in 2025.
  • Taiwan leads the way for cryptocurrency, with 40% of ETF investors intending to buy cryptocurrency focused ETFs in 2025.
  • Greater China allocators are incredibly bullish on Artificial Intelligence (AI), with 31% saying it will be major investment trend for 2025. This rises to a staggering 60% in Taiwan.

Read the full report here: 2025 Greater China ETF Investor Survey.

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