THREE more mutual funds that China set up to boost battered shares during a 2015 market crash sold their stock and bond holdings in the third quarter.

China AMC New Economy Flexible Allocation Mixed Launched Fund, Harvest New Opportunity Flexible Allocation Mixed Launched Fund and China Southern Consumption Power Flexible Allocation Mixed Launched Fund saw their combined net assets shrink to 252.5 million yuan (US$36.3 million) at the end of September, quarterly statements dated Friday show. The figure at the end of June was 39.3 billion yuan.

The liquidations come after two similar funds linked to the government said Wednesday that they had done so in the third quarter without explaining why. The five mutual funds were described by domestic media as vehicles for China’s 2015 stock rescue.

Some or all of the funds could have been moved to other vehicles. The “National Team” of State investors has recently been buying stocks in a targeted manner, people familiar with the matter said.

Some of the money may have flowed into exchange-traded funds (ETFs), said Dai Ming, a Shanghai-based fund manager at Hengsheng Asset Management Co. The Shanghai-listed China 50 ETF, which tracks large-cap stocks, has attracted about US$1.19 billion in net inflows so far in October, on course for the biggest monthly influx since mid-2015.

“It’s likely the National Team will switch from active funds to ETF funds,” Dai said. With low management costs and high liquidity, ETFs would be an efficient way for State funds to smooth market swings.

Volatility in China’s stock market surged toward three-year highs this month amid U.S.-China trade tensions, weakening economic growth and concerns over pledged shares. The Shanghai Composite Index has lost more than 21 percent this year, making it the worst-performing benchmark globally. (SD-Agencies)