Chinese retail investors are back at it! Believing that "a pullback is a buying opportunity," they have net purchased 1.25 trillion since March.

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Cailian News

Cailian News April 4, 2026 (Cailian News reporter Wang Chen) In March just ended, the A-share market suffered a sharp pullback under the combined pressure of the U.S.-Iran conflict and swings in overseas sentiment. The Shanghai Composite Index once dipped from the monthly high of 4,197 points at the start of the month down to 3,794 points, with the full-month cumulative decline nearing 6%. Although early April brought a brief “open-the-gate” positive start, over the following two days, geopolitical tensions kept flaring up and the Shanghai Composite Index again fell below the round-number 3,900-point level.

However, just as panic sentiment spread across the market and Northbound capital recorded a record outflow, a “countercurrent” from Chinese retail investors quietly emerged, becoming the most difficult-to-ignore market force in this volatile month.

After reviewing Cailian News reporters’ analysis of the flow of funds since March, account opening data, and changes in margin trading accounts, it was found that individual investors not only did not flee in panic during the decline, but instead “bought more the lower it went.”

The data show that small-lot funds recorded cumulative net inflows of up to 1.25 trillion yuan over the past month, and remained positive on every trading day. The deeper the market fell, the more aggressively retail investors bought. Meanwhile, in March, the number of newly opened A-share accounts reached 4.60 million, up 50% year over year and up 82% month over month, breaking the “positive correlation between account openings and profitability” pattern. Frontline brokerage business staff reported that many customers clearly said, “A pullback is an opportunity to get in.”

For a long time, retail investors have been labeled as “chasing rallies and selling at lows,” “emotion-driven trading,” and “lacking rationality.” However, over the past two years of multiple market volatilities, the behavior of retail investors has been quietly changing.

Judging from several major bouts of turbulence since 2024, retail investors’ ability to take contrarian moves has improved markedly. Whether it was last April’s tariff shock or this March’s geopolitical disruptions, retail investors did not become an amplifier of panic. Instead, at critical moments they played the role of a “stabilizer.”

Retail investors, represented by small-lot funds, recorded net inflows for 25 consecutive days

March’s A-shares could be described as a roller coaster ride for sentiment. Driven by the escalation of the U.S.-Iran conflict and spillover of geopolitical risk, global capital markets’ risk-aversion sentiment surged rapidly. In mid-March, the A-share market briefly experienced extreme “sentiment stampedes.” On March 23, nearly 5,200 individual stocks fell in a single day, and Northbound capital recorded the biggest single-day net outflow in history. On a full-month basis, the Shenzhen Component Index and the ChiNext Index fell by more than 7% and 8%, respectively. Small-cap growth indices such as the STAR Market 50 and the Beijing Stock 50 saw even larger declines, exceeding 10%.

However, just when institutional funds were withdrawing one after another and the market was engulfed in pessimism, retail investors’ funds chose a completely different direction.

Based on Cailian News reporters’ statistics using the flow-of-funds data from March 1 to April 3, it was found that small-lot funds (a representative indicator of ordinary retail investors’ trading activity) accumulated net inflows of up to 1.25 trillion yuan during this period.

Small-lot funds are mainly used to measure the trading behavior and market sentiment of ordinary retail investors. These orders are numerous and widely distributed, and essentially correspond to individuals’ daily buying and selling. By looking at whether small-lot funds post net inflows or net outflows, it is possible to directly judge whether retail investors are chasing high prices or panic-selling and exiting. As a result, they are often regarded as a “thermometer” for market sentiment.

In contrast, large-lot and ultra-large-lot funds, which represent institutional behavior, recorded net outflows of 742.32 billion yuan and 12.5k yuan, respectively. It cannot be denied that many institutions need to sell to manage position sizes in response to market adjustments—selling is understandable—but at the same time, this also shows the investment resolve of general investors. Mid-lot funds were net inflows, with a scale of 12.5k yuan.

Even more worth noting is that the inflow timing of retail investors’ funds has stronger “contrarian” characteristics. From the day-by-day flow of funds, since March, the net buy amounts of small-lot funds have been positive every single trading day. The more the market fell, the higher the net buy amount for small-lot funds became; when the market saw a brief rebound, the net buy amount for small-lot funds actually narrowed. This “buy more when it falls” behavior model creates a sharp contrast with the traditional stereotype that retail investors “chase rallies and sell at lows.”

New account opening data grow against the trend

Beyond fund flows, new investor data also confirm that retail investors’ enthusiasm for entering the market has increased.

According to the latest account-opening data, in March 2026, the total number of new accounts opened on the A-share market reached 4.6014 million. Of that, the number of accounts opened by individual investors was 4.5882 million. This figure is not only up sharply 82% month over month from February this year’s 2.5230 million, but also up 50% year over year compared to last March’s 3.07 million.

From historical patterns, changes in A-share new account openings are typically highly positively correlated with the market’s profitability effect. When the market rises, it ignites enthusiasm to open accounts; when the profitability effect fades, the number of new accounts declines in step. However, in March, the market overall was in an adjustment channel with investor sentiment fluctuating repeatedly, yet the number of newly opened accounts surged against the trend—something rarely seen in recent years’ A-share market.

Even more worth highlighting is that in January this year, the number of new A-share account openings reached as high as 4.9158 million, when market sentiment was high and the index kept pushing higher. In February, due to the Spring Festival factor, it fell back to 2.5230 million. In March, despite persistent negative factors from overseas, it once again approached 4.6 million. This “V-shaped” rebound in the account-opening curve precisely reflects retail investors’ recognition of the long-term allocation value of A-shares, rather than blind follow-the-trend sentiment in the short term.

Not only for ordinary stock accounts, new data for margin trading and securities lending accounts also released positive signals.

The latest margin trading and securities lending (two-margin) account-opening data show that in March 2026, the whole market opened 190.5k margin trading and securities lending accounts, up 32% year over year from 144.5k in the same period last year, and up 63% month over month from 116.7k in February this year. This increase is clearly higher than the month-over-month growth rate of ordinary accounts. It indicates that not only are ordinary retail investors entering the market—two-margin investors with a certain risk tolerance and trading experience are also actively laying out positions.

Looking at a longer time horizon, the new account-opening data for two-margin accounts has remained at relatively high levels since August last year. In August 2025 and September 2025, respectively 183k and 205.4k accounts were newly opened. After that, there was some pullback in the fourth quarter, but after entering 2026, it rose again. In January, 190.5k accounts were opened, and in March it reached this level again, showing that leveraged capital’s confidence in the outlook has not wavered due to short-term fluctuations.

Frontline brokerage feedback: customers say plainly, “A pullback is an opportunity to get in”

Behind the data are real changes in investor behavior. Cailian News reporters recently learned from business staff at multiple brokerages that since March, there has been a clear increase in individual investors bringing in funds, rebalancing positions, and adding to positions.

“Some customers directly told us that the market had been rising too fast before, and they kept not daring to chase. But now that it has pulled back, they actually think it’s an opportunity.” A business office person at a leading East China brokerage told reporters that especially during the few days in mid-March when the market fell quickly, retail investors did not dump shares; instead, they added to positions.

Another wealth management professional at a brokerage in South China also expressed a similar sentiment: “Since the continuous upward trend began in the fourth quarter last year, many retail investors were actually left behind, or their positions were very light. It’s not that they don’t want to buy; they’re just afraid of buying at the peak. Now the market has fallen, releasing some risk—this has given them a chance to get in.”

This mindset of “a pullback is an opportunity” was fully validated in March’s small-lot fund flow. The data show that on March 23, the day when the market experienced an extreme行情 with nearly 5,200 stocks down, the small-lot net buy amount actually hit a stage high. Retail investors did not choose to cut losses in panic; they bought when others were fearful.

In fact, this contrarian entry phenomenon has not appeared for the first time. Cailian News reporters previously documented retail investors’ steadfast posture during the period of last April’s shock caused by Trump’s tariff policy in the report titled “There is a kind of power called ‘Chinese retail investors’: the investigation shows that retail investors buy more as prices fall, and that’s also how it becomes a stabilizer for A-shares.”

At that time too, the A-share market suffered an external shock that triggered a rapid selloff, and the market once fell into panic. But large numbers of retail investors did not choose to sell off and exit; instead, they actively bought at low levels, becoming an important force in stabilizing the market. Now, nearly a year later, a similar scenario is playing out again.

The difference is that this time the market environment is more complex. Geopolitical conflicts, expectations of tightening global liquidity, and multiple factors of risk-aversion sentiment intertwine, and the uncertainty facing A-shares is even higher than in April last year. However, retail investors’ investment behavior has shown stronger resolve and greater maturity.

Behind this are improvements across many areas, such as investor education, information channels, and trading tools. More and more retail investors are starting to accept the ideas of long-term investing and value investing, and learning to position themselves using contrarian indicators of market sentiment. Many investors also diversify risk through ETFs and systematic investment plans (定投), and no longer blindly chase hot themes or gamble on individual stocks.

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Responsible editor: Ling Chen