Beijing Stock Exchange 50 Index, which tracks early-stage innovative companies listed in the capital, has shown signs of entering a bull market, despite a broader downturn in local equities. The index rose 3.1% on Monday and has gained over 19% since October, outperforming its larger, tech-heavy peer by 12 percentage points and the benchmark CSI 300 Index by 16 percentage points.

The strong rebound on the Beijing board can be attributed to several factors. The wider fluctuation range of 30% allowed for its constituents in either direction, compared to a span of as much as 20% for the Shanghai and Shenzhen gauges, indicates that investors are more willing to take risks in these smaller firms. Additionally, regulators’ consideration to include eligible securities into the CSI cross-market index system has made it easier for these companies to access funding from both domestic and foreign investors.

The Beijing exchange was launched two years ago with the goal of helping small firms raise funds and make the nation’s financial markets more multifaceted. While some of the largest exchange-traded funds tracking the index have assets of about $31.9 million, indicating moderate investment compared to other options, this outperformance is notable as it highlights a bright spot in China this quarter amidst a broader downturn in local equities.