“The baton appears to be getting handed over,” mentioned Cameron Brandt, director of analysis at EPFR, in an interview Friday. “Numerous buyers assume the brief time period play is the U.S., the place the stimulus is ramping up, versus China, the place there are alerts a extra prudent take will likely be taken, particularly within the second half of the yr.”

U.S. shares plunged in March 2020 as worries concerning the coronavirus pandemic’s influence on financial progress gripped the markets. By that point, China was on its technique to controlling the home unfold of the virus and the economic system returned to progress within the second quarter.

Now, roughly a yr out, world buyers are reassessing their outlook on each nations.

“Each fund teams have seen a big leap in curiosity for the reason that center of final yr,” he mentioned. “China funds bought the preliminary leap however U.S. got here roaring again.”

In distinction, Chinese language inventory funds noticed web constructive cumulative flows for a lot of final yr that exceeded U.S. ranges — till December. Web cumulative flows to Chinese language inventory funds as of the week ended April 7 have been simply $29.78 billion, based on EPFR.

The information firm is a subsidiary of Informa Monetary Intelligence and claims to tracks over 100,100 funding funds worldwide with greater than $34 trillion in whole belongings.

Whereas U.S. shares have climbed to recent data this yr, the Shanghai composite is little modified since December. Tens of millions of latest buyers piled into the mainland inventory market final yr amid a surge in native shares, stirring considerations of extreme hypothesis.

Within the final a number of weeks, Chinese language authorities have warned repeatedly of monetary market dangers.

Analysts have mentioned Beijing’s 6% GDP progress goal for the yr and different financial indicators sign that slightly than specializing in high-speed progress, policymakers are intent on cracking down on long-term issues similar to excessive reliance on debt.

“We’ve seen flows to China funds tail off not too long ago,” Brandt mentioned. “It appears there’s a certain quantity of skepticism despite the fact that headline progress numbers appear fairly spectacular in comparison with in all places else, China continues to be seen as weak (if) financial circumstances tighten earlier than the top of the yr.”

Nonetheless, he expects funds will proceed shopping for Chinese language belongings given sturdy demand from retail buyers for the reason that center of final yr.

Historical past signifies it might take an excessive occasion to dent that retail curiosity. Brandt mentioned the final time there was such a surge in retail shopping for, it did not finish till the mainland Chinese language inventory market crashed in 2015.

The Chinese language authorities would additionally like to spice up investor participation within the native inventory market by making it simpler for corporations to go public, and inspiring overseas establishments to take a position.

— CNBC’s Yen Nee Lee contributed to this report.