Southbound funds refer to the funds flowing from A shares into the Hong Kong Stock Exchange and flowing out through the Hong Kong Stock Connect business. It is called southbound capital because the mainland stock exchange is in the north of the Hong Kong Stock Exchange, and the capital is from north to south, so it is called southbound capital. Northern capital corresponds to southern capital and represents the capital flowing into the A-share market from the Hong Kong Stock Exchange. Southbound capital usually refers to the capital flowing into A shares through the Hong Kong market, which is the so-called foreign capital. Southbound capital is a natural capital flowing southward into the Hong Kong market.

1. In the stock market, "South" stands for China and Hongkong, and "North" stands for Chinese mainland. This concept originated from Shanghai-Hong Kong Stock Connect. Buying Hong Kong from Shanghai is called going north, and buying Hong Kong from Shanghai is called going south. On August 65, 2065, 438+09,65,438+09, the net inflow of northbound funds was 8.483 billion yuan, ranking sixth in a single day this year. At the same time, the data recently released by the central bank shows that the proportion of northbound funds in foreign capital holdings reaches 63.75438+0%. It is worth noting that at the end of the second quarter, overseas institutions and individuals held domestic stocks of164.73 billion yuan, a decrease of 36.588 billion yuan compared with168.388 billion yuan at the end of the first quarter.

2. In addition, the market showed a downward trend in the second quarter, and there was a net outflow of funds from the north as a whole. However, the value of holding the stock market has risen instead of falling, which also reflects the stock selection ability of Northbound Fund to some extent. Chinese mainland's capital flow is controlled, not free, but Hong Kong's capital flow is free. During the period of RMB appreciation, a large amount of Hong Kong and international funds will enter the mainland through various channels to strive for RMB appreciation. In the second quarter, the market showed a downward trend, and there was a net outflow of funds from the north. However, the value of the stock market has not fallen, but has risen, which also reflects the stock selection ability of Northbound Fund to some extent.

3. Difference between North and South Funds: Unlike southern fund, investors mainly invest in domestic individual investors and institutional investors, while investors in North Funds mainly come from Hongkong or international investors. Different southward capital flows refer to the funds that mainland investors buy stocks on the Hong Kong Stock Exchange through Shanghai-Shenzhen-Hong Kong Stock Connect, that is, the funds enter the Hong Kong stock market from north to south. Northbound capital usually refers to the capital flowing into the A-share market from the Hong Kong market through Shanghai-Shenzhen-Hong Kong Stock Connect, that is, the capital enters the A-share market from south to north. Different restrictions on southward funds every day include funds entering Hong Kong through Shanghai Stock Exchange and Shenzhen Stock Exchange. The daily limit of Shanghai-Hong Kong Stock Connect is 42 billion yuan, and that of Shenzhen-Hong Kong Stock Connect is 42 billion yuan. Northbound funds include funds entering A shares through the Hong Kong Stock Exchange. The daily quota of Shanghai and Shenzhen Stock Connect is 52 billion yuan respectively.