Covering the "Ningmao" leader, the 10 billion A50 ETF connection was approved

In the context of the acceleration of the internationalization of A-shares, the first batch of ETFs that track the MSCI China A50 Interconnection Index quickly became the focus of the market after its listing on November 8. Choice data shows that in terms of scale, turnover, and net subscription, the Huaxia MSCI China A50 Interconnect ETF (code: 159601, abbreviation: A50 ETF), which ranks first in the same index ETF, has also rapidly climbed to more than 10 billion yuan in product scale, with a total turnover of more than 60 billion yuan in less than a month since its listing, ranking first in liquidity in equity ETFs. Recently, the ETF's connected fund has been officially approved, which will soon provide a new weapon for over-the-counter investors to lay out the MSCI China A50 Interconnection Index.

Covering the "Ningmao" leader, the ROE of the top ten weighted stocks exceeds 20%

The MSCI China A50 Interconnection Index, tracked by the A50 ETF (159601), is based on the MSCI China A-share Index and incorporates 50 A-shares in the range of the Mainland Stock Connect, thus providing an index tool for international investors to bet on China's highest quality core assets. Thanks to the innovative method of sampling methods, the index covers core leading stocks with large market capitalization such as CATL, Guizhou Moutai and LONGi shares. Wind data shows that although the number of constituents of the index accounts for only 1% of the market, the market capitalization, revenue and attributable net profit account for 24%, 22% and 34% of the market, respectively. According to the statistics of the 2020 annual report, the average operating income and net profit compound annual growth rate of the top ten weighted stocks of the index in the past five years have reached 31.41% and 36.10%, and the average weighted return on net assets (ROE) has reached 21.7%, which can be described as the essence of the highest gold content in A-shares.

With the support of these high-quality core assets, the LONG-term performance of the MSCI China A50 Interconnection Index is also very good. Wind data as of October 31 shows that the index has increased by 246.1% since the base day (2012-11-30), which is significantly better than the cumulative increase of the CSI 300 index (178.3%) in the same period. In addition, in the short, medium and long-term dimensions of the past year, two years, three years and five years, the yield of the MSCI China A50 Interconnection Index is significantly superior.

Attracting gold and eye-catching, the listing set a record

As soon as such an excellent index was launched, it immediately became the focus of the market. On November 8, huaxia fund and other four first batch of A50 ETFs that tracked the index were successfully listed, and the total turnover on the first day exceeded 10 billion yuan. Among them, the A50 ETF under Huaxia Fund not only traded 3.617 billion yuan on the same day, ranking first in the turnover of equity ETFs, but also broke the highest historical record of 3.286 billion yuan on the first day of the listing of ETFs.

After the listing, several ETF products also continued to receive market attention, with funds constantly flowing in and transactions very active. Choice data shows that as of December 3, the total share of the four products has exceeded 33 billion, and the cumulative turnover after listing has reached 171.1 billion yuan. In terms of scale, turnover and net subscription share in the market, Huaxia A50 ETF firmly occupies the first place in the ETFs that track the same index, becoming the champion in liquidity. In fact, there are only 10 ETFs with a circulating share of more than 10 billion, of which the Huaxia A50 ETF has soon become a new 10 billion-level product this year. As of December 3, the product ranked 10th among all ETFs in the market based on the latest share of on-market circulation, ranked 8th in terms of cumulative turnover, and 5th in terms of net subscription share.

Help share the long-term opportunities of China's economic development

For ETF products, only products with large scale and good liquidity are more conducive to accurately copying the underlying index. The advantages of A50ET in terms of scale and liquidity are undoubtedly inseparable from the strong strength of Huaxia Fund in the field of ETFs. At present, the equity ETFs in the whole market have officially exceeded the trillion mark, of which the management scale of Huaxia Fund is 227.6 billion yuan, ranking first among 51 public offerings. In addition, Huaxia Fund is also the only fund company in China that has been awarded the "Passive Investment Golden Bull Fund Company" award for six consecutive years.

Recently, foreign investment banks such as Morgan Stanley and Goldman Sachs have released their investment strategies for 2022. Goldman Sachs said that it will maintain the proposal for the high allocation of the A-share market in 2022, and it is expected that the valuation of A-shares will rebound significantly in 2022. Morgan Stanley Analysis believes that the launch of the MSCI China A50 Index and related derivatives has enriched the A-share risk management tools in the offshore market and is also conducive to further increasing the allocation of A-shares by foreign investors.

Among the related products, the A50 ETF undoubtedly has significant advantages and lays a solid foundation for the newly approved A50 ETF connection. For those investors who are accustomed to buying funds in banks and other channels, ETF-linked funds are not only more familiar with subscription, redemption, etc., but also more convenient for fixed investment, conversion and other operations. The approval of the A50 ETF Linked Fund will undoubtedly give these investors the opportunity to use this excellent index to easily share the long-term opportunities of China's economic development.