ETFs
Large-Scale ETFs Open Up Investment Opportunities in China A-Shares Amid Market Recovery
GUANGZHOU, China, June 10, 2024 /PRNewswire/ — According to a recent market data report released by the Shenzhen Stock Exchange, there are a total of 379 ETF products with a combined market capitalization of US$83.8 billion and Trading volume for ETFs in April stood at US$63.6 billion as of end-April 2024. The three most traded ETFs (excluding money market funds) listed on the Shenzhen Stock Exchange were E Fund ChiNext ETF ( code: 159915), HuaAn ChinaBond. 1-5 Year CDB Bond Index ETF and Harvest CSI 300 Index ETF, with trading volumes of US$3,548 million, US$2,949 million and US$2,787 million, respectively.
(share of indices by market capitalization)
Significant net inflows into China’s A-share market, particularly in equity ETFs, reflect investors’ growing confidence in the domestic stock market’s potential and economic growth prospects. As of May 28, equity ETFs in China’s A-share market, including the Shanghai Stock Exchange and Shenzhen Stock Exchange, recorded a net inflow of $45.3 billion, while broad-based ETFs recorded a net inflow of more than $47.8 billion. Among them, the CSI 300 Index, CSI A50 Index, ChiNext Index and SSE STAR Market 50 Index are gaining ground.
Notably, E Fund Management (“E Fund”), as the largest fund manager in China, attracted a cumulative net inflow of US$13.6 billion into its expanded ETF offerings this year. At the same time, E Fund actively positioned new broad-spectrum products and launched the E Fund CSI A50 ETF two months after the publication of the index in January, which differentiated itself with its more balanced sector allocation and incorporated a strategy of ESG exclusion.
Although both the CSI 300 Index and the CSI A50 Index are representative of large-cap stocks, with an average market capitalization of US$18.5 billion and US$35 billion, the CSI A50 Index has released opportunities to invest in mega-caps of which 89% of its constituents have a market capitalization greater than 100 billion RMB (13.8 billion US dollars).
Some other broad indices, such as the ChiNext Index and the SSE STAR Market 50 Index, are comprised of mid- to large-cap companies with high growth potential. The ChiNext Index is comprised of 100 stocks listed on the ChiNext board with an average market capitalization of US$6.5 billion, most of which prioritize sectors such as new energy and healthcare. While the SSE STAR Market 50 Index is composed of 50 large and liquid stocks from the STAR Market, with an average market capitalization of US$6 billion, and is more oriented towards the semiconductor sector.
About Fund E
Established in 2001, E Fund Management Co., Ltd. (“E Fund”) is a leading comprehensive fund manager in China, with nearly RMB 3.2 trillion ($450 billion) under management.* E Fund’s clients include both individuals and institutions, ranging from central banks, sovereign wealth funds, social security funds, pension funds, insurance and reinsurance companies, to corporations and banks. Long-term oriented, it has focused on investment management activities since its inception and believes in the power of in-depth research and dedicated time for investing.
* Assets under management include subsidiaries. The exchange rate comes from the PBoC.
Fund Management SOURCE E