The Hong Kong Stock Connect Internet ETF, managed by E Fund (513040), has reported an impressive inflow of over 630 million yuan in the past week. This significant capital influx highlights the growing investor confidence in the technology sector, particularly as major internet companies show signs of recovery.

As of 10:49 AM, the CSI Hong Kong Stock Connect Internet Index (931637) experienced a slight decline of 0.8%. Notably, among the index's constituent stocks, Alibaba Group Holdings rose by 1.81%, while other tech giants like Kuaishou Technology and Tencent Holdings also posted gains. In contrast, some companies like China Ruiyi and Yixin Group faced substantial losses, with declines exceeding 9%.

Recent data indicates that the E Fund Internet ETF has been particularly favored by investors, recording a net inflow of 2.29 billion yuan on the previous trading day alone. Over the past week, the total net inflow reached 6.36 billion yuan, contributing to an impressive annual total of 96.89 billion yuan.

The surge in investment comes as the AI sector accelerates its development, with Tencent recently launching an upgraded version of its AI model. Furthermore, Kuaishou has unveiled a new framework for real-time video generation, showcasing the rapid advancements in AI applications.

Last week, southbound capital saw a net purchase of 39.055 billion Hong Kong dollars, marking the highest weekly net inflow since April. Investors primarily focused on increasing their stakes in major internet firms, with Alibaba receiving net purchases of 8.318 billion Hong Kong dollars, while Xiaomi faced net selling of 800 million Hong Kong dollars.

According to Citic Securities, the recent market performance suggests that the prolonged downturn may be coming to an end. With corporate earnings expectations stabilizing after a period of significant downward revisions, the Hang Seng Index's profit growth forecast has shown signs of bottoming out, fluctuating around 10% for the upcoming year.

The E Fund Internet ETF closely tracks the CSI Hong Kong Stock Connect Internet Index, which includes 30 publicly listed companies involved in internet-related businesses. The top five weighted stocks in the index—Alibaba, Tencent, Xiaomi, Meituan, and SenseTime—account for nearly 60% of its total weight, underscoring the dominance of tech giants in this sector.