China just unlocked a new level for its ETF market. The China Securities Regulatory Commission has greenlit actively managed exchange-traded funds, a product category that has reshaped investing in the US and Europe but was previously off-limits in mainland China.
Until now, Chinese ETF providers were restricted to enhanced index ETFs, which allow a maximum deviation of only 20% from their benchmark indices.
From enhanced index to full active: what actually changes
Actively managed ETFs break that leash entirely. Portfolio managers can construct holdings based on their own research, convictions, and market views without being anchored to any specific index. In the US, actively managed ETFs have exploded in popularity, with firms like JPMorgan and Dimensional Fund Advisors building massive franchises around the format.
JPMorgan Asset Management had been publicly anticipating this moment. CEO George Gatch projected earlier in 2026 that the CSRC would grant permission for actively managed ETFs within the year. State Street similarly flagged in its 2026 ETF outlook that policy support for full actively managed ETFs, the kind not reliant on benchmarks, was on the horizon.
China’s ETF market has been on a tear
The commission has approved as many as 17 ETFs in a single day. Alongside the volume push, the regulator instituted significant fee reforms, with reductions reaching up to 70%. Lower fees make ETFs more competitive against traditional mutual funds and help attract retail investors who are price-sensitive.
What this means for investors
For international asset managers, firms like JPMorgan and State Street have deep active management capabilities that were essentially unusable in mainland China’s ETF format. Now those capabilities have a distribution channel.