Retail investors are scooping up funds that track Chinese stocks after sharp falls in recent weeks, marking a contrast to institutions that have remained more cautious as Beijing cracks down on key sectors.

A US listed exchange traded fund, which holds big names such as Alibaba, Tencent, JD.com and Meituan, has attracted more than $2bn of new money since the start of July, CFRA data show. The $5.3bn KraneShares CSI China Internet ETF has garnered record daily inflows from retail traders at a time when many institutional investors have backed away from sectors that are deemed vulnerable to tougher scrutiny from Chinese authorities.

The strong inflows come after a harrowing few weeks for Chinese stocks traded in international financial centres such as Hong Kong and New York. A crackdown on the country’s education sector sparked a crash in a trio of Wall Street listed companies in that industry, while a Nasdaq index of big Chinese tech companies lost more than a fifth of its value last month. The KraneShares fund has tumbled by a third so far in 2021.