The development trend of ETFs shows the strong getting stronger, with the top five ETFs totaling 947.002 billion yuan, accounting for 44% of the total equity ETF scale. Individual ETF scales have reached a new level. Recently, Huatai-Pine300 ETF’s scale has broken through 300 billion yuan, becoming the first ETF in the public offering industry to exceed 300 billion yuan in scale. Currently, there are 5 broad-based ETFs with a scale over 100 billion yuan. Despite the strong development trend of ETFs, many fund companies are still actively deploying in the broad-based ETF track, trying to get a share of the market.
The ‘giant’ ETFs have grown even larger. According to the Shanghai Stock Exchange’s closing data on September 24, Huatai-Pine300 ETF’s shares are 90.944 billion, with a net value of 3.4238 yuan, and the total scale reaches 311.374 billion yuan. This is the first ETF in the public offering industry to break through the 300 billion yuan scale. According to Choice’s calculation, as of the closing on September 25, the scale of Yifangda300 ETF also reached 216.
556 billion yuan, making it the second ETF to break through the 200 billion yuan scale. The scales of Huaxia300 ETF, Huaxia Shanghai 50 ETF, and Harvest300 ETF are all over 130 billion yuan, while Nanfang Zhongzheng 500 ETF’s scale has reached 91.999 billion yuan, expected to become the sixth 100 billion yuan level ETF. The total scale of the aforementioned 5 100 billion yuan level ETFs reaches 947. 002 billion yuan, accounting for 44% of the total equity ETF scale.Looking at the development of these ‘giant’ ETFs this year, they have mainly experienced two rounds of strong capital inflows. The first round occurred in February. According to Choice’s calculation, the net subscription amount of ETFs in February reached 173.404 billion yuan, among which the net subscription amounts of Nanfang Zhongzheng 500 ETF, Huaxia300 ETF, Yifangda300 ETF, Harvest300 ETF, and Huatai-Pine300 ETF were all over 20 billion yuan.
With the influx of a large amount of capital, the scales of several ETFs successively broke through 100 billion yuan. On February 6, Huaxia Shanghai 50 ETF’s scale broke through 100 billion yuan, becoming the second equity ETF in the industry to reach the 100 billion yuan level. On February 7, Yifangda300 ETF followed closely, and its scale broke through 100 billion yuan. On February 22, Harvest300 ETF broke through 100 billion yuan, becoming the fourth equity ETF to break through the 100 billion yuan scale. On March 11, Huaxia300 ETF’s scale was 100.635 billion yuan, becoming the fifth equity ETF to break through the 100 billion yuan scale. On March 12, Huatai-Pine300 ETF’s scale broke through 200 billion yuan.Since July, funds have accelerated their inflow into ETFs once again. It is this round of accelerated fund inflows that has led to the continuous climb in the scale of “giant” ETFs, giving birth to ETFs in the 300-billion-yuan level.
Specifically, as of September 25, the net subscriptions of Huatai-PineBridge CSI 300 ETF since July amounted to 107.353 billion yuan. The net subscriptions of E Fund CSI 300 ETF exceeded 70 billion yuan, and the net subscriptions of Cathay CSI 300 ETF and Harvest CSI 300 ETF exceeded 30 billion yuan.
In addition, the net subscriptions of Southern China Securities 1000 ETF, Southern China Securities 500 ETF, and Cathay Shanghai 50 ETF were all above 20 billion yuan.
Looking at the top ten holders of these multi-hundred-billion-level broad-based ETFs, Central Huijin is an important buyer. According to statistics from Guosen Securities, as of the end of June, Central Huijin held over 120 billion yuan of Huatai-PineBridge CSI 300 ETF, over 90 billion yuan of E Fund CSI 300 ETF, and over 70 billion yuan each of Cathay Shanghai 50 ETF, Cathay CSI 300 ETF, and Harvest CSI 300 ETF.
The development of the ETF industry shows a situation where the strong get stronger. Only the leading broad-based ETFs can attract funds strongly. Taking CSI 300 ETF as an example, according to Choice’s calculations, as of September 25, there were 22 CSI 300 ETFs in total, among which 4 CSI 300 ETFs had a scale of over 130 billion yuan.
In contrast, 10 CSI 300 ETFs had a scale of less than 1 billion yuan, and 3 of them had a scale of only tens of millions of yuan.
Despite the significant Matthew effect, fund companies’ competition for the broad-based ETF market has not stopped, and many fund companies are still persevering in their investment. In May, Fullgoal CSI 300 ETF was established; in August, Dongcai CSI 300 ETF was established; in September, China Merchants CSI 300 ETF was established.
In the view of industry insiders, with advantages such as transparency, low fees, and convenient trading, ETFs have become an important tool for residents’ asset allocation, and more and more long-term funds are also entering the market through ETFs. Although the competition is already fierce, the development space is still very broad, so fund companies are still actively deploying.
The “ETF Investment and Trading White Paper (First Half of 2024)” released by the Shanghai Stock Exchange shows that as of the end of June 2024, the number of ETF holders in the Shanghai market reached 6.58 million, a 61% increase compared to the end of 2020. Among them, the positions held by institutional investors in the Shanghai ETF market reached 1. 3 trillion yuan, accounting for more than 70%. The holding proportion increased by 7 percentage points compared to the end of 2023, and the holding scale increased by 31.
8%. Zhang Wei, Chairman of Rongtong Fund, said that currently the public offering industry is moving from the era of star fund managers in “1.0” to the instrumental era of “2.0” and the active index instrumental era of “3.0”. As an instrumental product, index funds have advantages such as low fees, transparent positions, and high convenience. Moreover, with the continuous maturity of the capital market and the continuous improvement of market efficiency, it is becoming more and more difficult for active funds to outperform the index in the long term and stably. This further highlights the investment value of excellent indexes. Judging from the development of overseas markets, the scale of passive investment management has exceeded that of active equity investment.
