U.S. stock QDII quota rarely relaxed! After a one-day "flash" increase, it was tightened again—what just happened?

Against the backdrop of limited quotas for US stock QDII mutual funds in the Chinese market, a public fund in North China unusually relaxed its single-day subscription limit for a Nasdaq index fund managed by it, but only for one day before tightening it again.

Some analysts suggest that this quota relaxation may be a response to regulatory policies promoting inclusive finance, aiming to alleviate issues such as subscription restrictions or premiums caused by quota shortages in public QDII products; the subsequent tightening is because the quota remains scarce and can be sold out in a day.

US stock QDII quota “flash” for one day

On February 25, China Jianxin Fund announced that starting February 26, 2026, it would suspend large subscription and fixed-amount regular investment services for the China Jianxin Nasdaq 100 Index Securities Investment Fund (QDII). The restrictions apply to all RMB and USD share classes, with specific limits of RMB 100,000 and USD 14,410.

This was the first time the fund eased its subscription threshold recently; previously, the single-day subscription limit was RMB 50 or USD 7.

Some analysts believe this quota increase may be due to internal QDII quotas being partially allocated to the public. It is understood that the industry-standard ratio for QDII between public mutual funds and segregated accounts is generally 8:2, though some fund companies allocate a higher proportion to segregated accounts.

According to regulatory guidance, fund companies are required to optimize the allocation of QDII quotas between public and segregated products, with a general tilt toward public funds. It is understood that the share of segregated accounts should be reduced to below 20% by the end of 2027, with at least half of the adjustment completed by the end of 2026.

The aforementioned source believes that this quota relaxation may be a response to regulatory directives emphasizing the importance of “five major articles,” especially the deployment of inclusive finance, aiming to ease subscription restrictions or premiums caused by quota tightness in public QDII products, and to meet investors’ needs for diversified global asset allocation. If during the transition period the proportion of segregated-account QDII does not decrease but instead increases, it could impact fund companies’ filings for new segregated accounts and classification assessments.

Notably, on the day after this quota relaxation announcement, February 26, China Jianxin Nasdaq 100 Index Securities Investment Fund (QDII) announced that its single-day subscription limit was tightened again to RMB 100 or USD 14. Some public fund practitioners commented, “The quota is still scarce—sold out in a day.” Data shows that since its inception, the fund’s assets and share count have grown each quarter. At the end of Q3 2021, the fund’s size was only RMB 24 million, but by the end of last year, it had risen to RMB 2.345 billion.

US stock QDII fund premiums remain high

A similar “flash” of quota easing for QDII funds is not an isolated case. On December 9 last year, Morgan Fund’s Morgan S&P 500 Index (QDII) RMB and Morgan Nasdaq 100 Index (QDII) RMB announced that they would raise the large subscription threshold to RMB 100,000.

Just one day later, on December 10, the thresholds for these two QDII products were lowered to RMB 10,000, and on December 11, further reduced to RMB 100.

Despite recent fluctuations, investor demand for QDII funds remains strong, and US stock QDII funds continue to be a key area under subscription restrictions.

As of February 26, the single-day subscription limit for E Fund Global Growth Select, which holds a concentrated position in the US market, is RMB 500. Funds such as GuoFu Global Technology Connectivity (RMB) have a limit of RMB 100 per day. Several Nasdaq index funds under companies like E Fund, Morgan Fund, and Player Fund have limits as low as RMB 10 per day.

Regarding ETFs, premiums remain elevated. As of February 26, the premium for Invesco Great Wall Nasdaq Technology Market Cap Weighted ETF reached 15.76%. Other products such as Cathay S&P 500 ETF, Cathay Nasdaq 100 ETF, and Southern S&P 500 ETF also show premiums exceeding 4%. Fund companies have issued risk warnings, repeatedly stating: “The secondary market trading price is significantly higher than the fund’s net asset value per share, resulting in a large premium.”

“Under normal circumstances, market maker mechanisms can generally keep ETF and LOF premiums and discounts within a relatively narrow range. However, for QDII products, because foreign exchange quotas are regulated, if their secondary market trading is highly active, it may lead to situations where primary market subscriptions cannot effectively supply shares to the secondary market, potentially causing supply-demand imbalances and high premiums,” explained Cui Yue, an analyst at Morningstar (China) Fund Research Center.

Market outlook may show divergence

Recently, US stocks have continued to fluctuate at high levels, but many fund companies agree that: 2026 still offers opportunities, though the market is shifting from a “broad rally” to “selective opportunities.”

Regarding recent sideways movements, Franklin Templeton Fund stated that, from a fundamental perspective, over 70% of US companies that have reported earnings exceeded expectations, and over 50% beat both earnings and revenue forecasts, indicating an overall improvement in corporate fundamentals. However, the Nasdaq and S&P 500 indices have not yet broken out of their range-bound pattern, showing signs of stagnation at high levels. This may reflect that, amid high valuations and the AI revolution, the market is highly sensitive to tech earnings and increasingly cautious about ROI prospects.

“Future earnings reports for tech stocks will remain a focus—pay attention to forward-looking guidance from upstream hardware, cloud providers, and related sectors. As earnings recovery broadens, the growth gap between other sectors and the MAG7 may narrow, and cyclically sensitive, small- and mid-cap stocks could outperform,” Franklin Templeton said.

Over the past six months, although AI technology investment has become a global focus, US stock gains have been limited. Fund manager Li Bohan from China Jianxin Fund explained that AI is reshaping the US industrial chain, and the moat of traditional software companies may be eroded by large AI models, which could lead to a decline in their valuations. Conversely, the competitive landscape for AI hardware remains relatively stable.

Li Bohan believes that the market’s structural differentiation may continue. Data centers are a core infrastructure for AI, mainly including computing power, storage, communications, and equipment manufacturers. Q4 2025 earnings reports suggest that global demand for AI data centers is expected to persist through 2030, but the stock prices of leading computing power companies are not rising—in fact, they are falling. He notes that data centers require substantial capital expenditure, and concerns exist that short-term AI applications may not generate enough cash flow to support data center expansion, leading to differing views on the growth prospects of these companies.

Li Bohan also sees storage and communications as relatively advantageous, given their lower unit prices and limited historical profit margins. Improving computing efficiency, overcoming the “memory wall” bottleneck, and accelerating bandwidth expansion are key. Their growth may surpass that of compute units. Sub-sectors like networking are likely to benefit early from AI development because model and application iterations do not affect underlying demand for storage and power. Although these segments face cyclical fluctuations driven by capital expenditure timing and supply-demand mismatches, they tend to have stronger performance verification.

The application layer offers vast potential but may also show more pronounced differentiation. High-quality application companies create value by solving real problems, improving efficiency, and enhancing user experience, rather than merely using AI as a marketing gimmick. Li Bohan warns that the application sector may experience “short-term hype with unstable long-term delivery.” Some scenarios have high entry barriers, strong customer loyalty, and high switching costs; others are characterized by low barriers, rapid homogenization, and fierce price competition. Investors should carefully distinguish between “hype” and “value.”

Hua Bao Fund manager Zhou Jing pointed out that, from the overall market perspective, the forward P/E ratio has fallen from the 28–29x range in October/November 2025 to around 24–25x, approaching the long-term average. He explained that this is due to the strong earnings growth of constituent companies, especially driven by AI. Overall, the US stock market remains one of the fastest-growing in earnings, providing solid support for the stock market.