FINANCE

China’s Offshore Investment Curbs Push QDII ETF Premiums Higher

Published: May. 26, 2026 10:35 p.m. GMT+8

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The Guotai Nasdaq 100 ETF (QDII-ETF) is one of China’s earliest funds tracking the Nasdaq 100 index. Photo: VCG

Premiums on Chinese exchange-traded funds investing overseas have surged as qualified domestic institutional investor (QDII) quotas tighten and regulators move to curb noncompliant cross-border brokerage services.

The tightening is making it increasingly difficult for mainland investors to access overseas markets through approved channels, funneling demand into exchange-listed QDII funds and driving market prices well above underlying portfolio values.

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China's QDII quota tightening and regulatory crackdown on cross-border brokerages (including fines of 2.3 billion yuan) are driving demand into listed QDII ETFs, causing premiums to surge.
As of May 26, some Nasdaq 100 ETFs traded at over 5% premiums, with Guotai Nasdaq-linked fund near 9%; Global Chip LOF reached a 47.7% premium.
Market participants warn investors to be wary when ETF premiums exceed 5%, citing risks of sharp reversals, arbitrage selling, and increased liquidity risks.

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Who’s Who

Guotai Asset Management Co., Ltd.: Guotai Asset Management Co., Ltd. manages the Guotai Nasdaq 100 ETF (QDII-ETF), one of China's earliest Nasdaq 100-tracking funds. The ETF reopened subscriptions on May 20 with a 300 yuan daily limit, later reduced to 100 yuan. By May 26, it traded at nearly a 9% premium due to QDII quota tightening and regulatory pressures.

UP Fintech Holding Ltd.: UP Fintech Holding Ltd., along with Futu and Long Bridge HK, was ordered by Chinese regulators to have mainland clients submit sell-only orders and complete rectification within two years. The two brokerages were previously fined a combined 2.3 billion yuan for unauthorized cross-border securities activities.

Futu Holdings Ltd.: Futu Holdings Ltd., a major Chinese cross-border brokerage, faced regulatory actions in 2024. It was ordered to have mainland clients submit sell-only orders and complete rectification within two years. Along with UP Fintech, Futu was fined a combined 2.3 billion yuan for unauthorized cross-border securities activities.

Long Bridge HK Ltd.: Long Bridge HK Ltd. is a cross-border brokerage serving mainland Chinese investors. In May 2025, Chinese regulators ordered the firm to have its mainland clients submit sell-only orders and complete rectification within two years, as part of a crackdown on noncompliant overseas investment services.

Huatai-PineBridge Fund Management Co., Ltd.: Huatai-PineBridge Fund Management Co., Ltd. issued the China-Korea Semiconductor ETF, which traded at a premium of 21.6% as of late May, remaining among the most elevated overseas-themed ETFs amid tightening QDII quotas and regulatory pressures.

Hwabao Fund Management Co., Ltd.: Hwabao Fund Management Co., Ltd. manages the Hwabao WP Overseas Technology Equity Fund. According to the article, this fund traded at a premium exceeding 21% above its underlying value as of May 26, reflecting strong demand amid tightened QDII quotas and regulatory actions on cross-border brokerages.

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What Happened When

May 20, 2026：: Guotai Nasdaq 100 ETF reopened subscriptions after a lengthy suspension, setting a daily purchase limit of 300 yuan.

May 22, 2026：: Eight Chinese government agencies, including the China Securities Regulatory Commission, announced they would strengthen oversight of noncompliant overseas investment services and ordered clients of UP Fintech, Futu Holdings, and Long Bridge HK to submit sell-only orders and complete rectification within two years.