This week, A-shares fell sharply, but smart funds borrowed stock ETFs, and the net subscription of about 20 billion shares against the market, the corresponding amount was about 12.9 billion yuan!
With global inflation continuing to rise, the Russian-Ukrainian conflict exacerbated the rise in energy prices, and the A-share market ushered in a sharp decline this week. However, in the stock market plunge, all kinds of funds actively borrowed the stock ETF product bottom market, and all kinds of stock ETF products reproduced the trend of net inflow of funds: the net inflow of funds in the first 3 trading days of this week reached 12.9 billion yuan, and the ChiNext ETF and the Kechuang 50 ETF, which fell against the decline, the photovoltaic ETF and the semiconductor ETF were all sought after by funds against the market.
A number of investors said that in the stock market fluctuations or shocks in the downward market environment, investors should have "reverse thinking", it is not appropriate to blindly chase the rise and fall, through the fixed investment method, buy the fundamentals and prosperity of the investment target in batches, in order to improve the probability of profitability in the medium and long term.
"The more you fall, the more you buy"
Net subscriptions of approximately 20 billion shares were made in 3 trading days
Wind data shows that as of March 9, the Shanghai index fell by more than 5% in the first three trading days of the week, while the total share of 605 equity ETF products (statistical stock ETF + cross-border ETF) in the whole market increased by 19.667 billion in three trading days, and the net inflow of funds reached 12.887 billion yuan according to the average transaction price of the above product range.
Talking about the phenomenon of net inflow of funds in the stock market plunge, Lu Yayun, vice president of the investment department of Huaxia Fund, said that from an investment perspective, as the valuation of some sectors declines, investors' willingness to lay out related ETFs is gradually heating up. From the perspective of product characteristics, ETF as a tradable index fund, the biggest advantage is simple and transparent, from the product name can see its investment direction at a glance, while the position is transparent, trading like stocks as flexible, whether it is to grab the rebound or swing operation, compared to the selection of stocks, ETF is more worry-free and labor-saving; compared to the selection of active funds, ETFs are more accurate.
Lu Yayun believes that the current phenomenon of equity ETFs falling more and more buying has a certain similarity with 2018, after experiencing a decline, a large number of funds from October to January 2018 significantly subscribed to equity ETFs to participate in the bottom layout. In the future, if the stock market can stabilize and recover, the current selection of equity ETFs will gradually be laid out in batches or better choices.
"There is a more obvious phenomenon of 'falling more and more buying' in the ETF market, and the varieties with large net inflows of ETFs in recent times are basically in line with this characteristic." Lu Yayun said.
A stock ETF fund manager in Beijing also analyzed that stock ETF products do have the characteristics of "more and more falling and buying", as global inflation continues to rise this year, the Russian-Ukrainian conflict and other peripheral factors affected, the A-share market has fallen irrationally, some sectors and industry valuations have returned to a reasonable range, some sectors have short-term oversold or entered the undervalued area, will attract funds in the relative bottom area of the market "bottom", and stock ETFs are a good investment tool for capital layout market.
Net inflows of GEM and Kechuang 50 ETFs
The net outflow of the CSI 500 ETF was close to 4.5 billion
From the perspective of capital inflow structure, the GEM ETF E Fangda, the ChiNext 50 ETF, the Kechuang 50 ETF, the Hang Seng Internet ETF and other sectors that have fallen sharply in recent days have been bought by the funds more and more, and the net inflow of funds is relatively large; among them, the Gem ETF E Fangda and the ChiNext 50 ETF are two products, and the net inflow of funds in 3 trading days is 2 billion.
In addition, the performance of the opposite of the decline of photovoltaic ETFs, semiconductor ETFs are also favored by funds, the fund range fell by about 2%, but the net inflow of funds is more than 500 million yuan.
In the broad-based index, the Hang Seng Technology Index ETF, H-share ETF, China-wide Interconnection ETF and other index products with large declines fell by more than 8% in three trading days, but they also showed a net inflow of funds.
Huaxia Fund Lu Yayun said that ETF capital flow is like a daily northbound capital flow change, on the one hand, the incremental change of funds can be used as a bellwether of market sentiment, net inflow or net outflow data can truly reflect which industries the market is concerned about and which industries are optimistic.
On the other hand, Lu Yayun believes that the stock of funds is equally important, in recent years, new energy vehicle ETFs, carbon neutral ETFs, chip ETFs, science and technology 50 ETFs and other products focusing on the green economy, scientific and technological innovation areas of product scale expansion is more obvious, emerging industries have become the current economic growth of the new engine. Looking back, the investment direction with high market certainty is the industrial upgrading of China's economy, which is also in line with the current changes in the scale distribution of equity ETFs held by investors.
From the list of net outflows of funds, in the first three trading days of this week, in the big decline in the broad-cap index, the CSI 500 ETF, which fell more than 7%, was net redeemed by funds, and the net outflow of funds was close to 4.5 billion yuan; the CSI 300 ETF and the Shanghai 50 ETF also fell by more than 5% in the same period, and the net outflow of funds also exceeded 500 million.
In addition, wide-based index products such as S&P 500 ETF and MSCI China A50 ETF, as well as consumer ETFs and coal ETFs, have also experienced net outflows of funds.
Investors should have "reverse thinking"
It is recommended to accumulate chips at the bottom by means of fixed investment
In fact, from a historical point of view, whenever there is a large fluctuation in the market, the equity ETF products that are the "wind vane" of institutional funds have obvious operational characteristics of "big fall, big buy, big rise and big sale". This kind of investment operation behavior also has great inspiration for ordinary investors to do a good job in equity fund investment.
In the view of Huaxia Fund Lu Yayun, from the perspective of ETF transaction data, in addition to the allocation value based on medium- and long-term fundamentals, the market also has a part of the trading demand for ETFs, especially some highly elastic and high-volatility sub-industry theme ETFs, such ETFs are more flexible than the broad-based index, whether it is a fall layout, or a rebound, especially in the market environment of big rises and falls, it has enhanced the trading demand of ETFs.
"For ordinary investors, timing is important, but long-term holding is more important, and investing better is the rose of harvesting time." Lu Yayun said that although the short-term fluctuations of the market are difficult to predict, a better way to invest is to select a good prosperity index in the market environment of shock or shock decline, accumulate chips through the way of fixed investment, and grasp the long-term general direction through the layout of the fall in batches, which can help us improve the probability of obtaining positive returns.
The above-mentioned Beijing stock ETF fund manager also believes that with reference to the operational characteristics of equity ETFs "big fall, big buy, big rise and big sale", ordinary investors should also have reverse thinking in equity fund investment, look for investment targets with cheap valuations but long-term basic orientation in the market crash, and when the market is overheated, there must be a sense of risk, and cannot blindly follow the crowd to chase up and kill.
"In the second half of 2018, with the decline of A shares, stock ETFs have also become the 'artifact' of fund bottoming, and the scale of this type of product has also climbed all the way, and when the stock market rebounded rapidly in the first quarter of 2019, the funds involved in the fixed investment were quickly profitable." Ordinary investors can refer to this trading characteristic of stock ETFs, which can greatly improve the probability of winning investments. The fund manager said.
This article originated from China Fund News