300 billion large increase in A-share ETF What did Central Huijin buy?

Since the beginning of this year, as an important part of the "national team", Central Huijin Investment Co., Ltd. (hereinafter referred to as "Central Huijin") has invested in the scale of "real money" to stabilize the A-share market, which has been a topic of great concern to the market.

Recently, a number of public fund ETF products released a quarterly report, which made Central Huijin's market entry and position increase "surface".

According to incomplete statistics from the 21st Century Business Herald reporter, in the first quarter of 2024, Central Huijin will have net purchases of 88.862 billion yuan, 75.031 billion yuan, 37.488 billion yuan, 54.326 billion yuan, and 58.162 billion yuan respectively in Huatai Barry CSI 300 ETF, E Fund CSI 300 ETF, ChinaAMC SSE 50 ETF, Harvest CSI 300 ETF, and ChinaAMC CSI 300 ETF, with a total net purchase of more than 300 billion yuan.

As more public ETF products release investor position data for the first quarter, it cannot be ruled out that Central Huijin's net buying will rise further.

A private equity fund person told reporters that the above five ETFs bought by Central Huijin in the first quarter of this year are index investment products with the largest asset management scale and relatively good trading liquidity in the A-share market, which can not only release Central Huijin's confidence in the future trend of the A-share market, but also meet their requirements for asset allocation liquidity, and Central Huijin may focus on long-term holding strategies.

A person from a multi-strategy private equity institution with a scale of 10 billion yuan bluntly said to reporters, "We and many of our peers have also followed the example of Central Huijin and increased the proportion of CSI 300 ETF and SSE 50 ETF in the process of A-share asset allocation." ”

The "whereabouts" of A-share ETFs

In February this year, Central Huijin announced that Central Huijin fully recognized the value of the current A-share market allocation, and has recently expanded the scope of exchange-traded funds (ETFs), and will continue to increase its holdings and expand the scale of its holdings, and resolutely maintain the smooth operation of the capital market. This has made the financial market particularly concerned about the trend of Central Huijin's position increase.

Recently, a number of public fund ETFs released their first-quarter financial reports, revealing the whereabouts of some of Central Huijin's ETF investments.

On April 22, Huatai Barry CSI 300 ETF released a quarterly report showing that in the first quarter of this year, "Institution 1" increased its holdings by 26.356 billion shares. Through comparison, the reporter found that at the end of last year, "Institution 1" and Central Huijin's Huatai Berry CSI 300 ETF held the same shares, both of which were 6.247 billion shares, which indicates that "Institution 1" is Central Huijin. If the average trading price of this ETF in the first quarter is 3.37 yuan, Central Huijin's net purchase in Huatai Pineapple CSI 300 ETF in the first quarter reached 88.862 billion yuan.

According to the above calculation method, in the first quarter, Central Huijin also increased its holdings of E Fund CSI 300 ETF, ChinaAMC SSE 50 ETF, Harvest CSI 300 ETF, and ChinaAMC CSI 300 ETF by 45.706 billion, 15.867 billion, 15.604 billion and 16.993 billion respectively. If calculated according to their average trading prices in the first quarter, Central Huijin's net increase in holdings of these four A-share ETF products reached 75.031 billion yuan, 37.488 billion yuan, 54.326 billion yuan and 58.162 billion yuan respectively.

According to the analysis of the above-mentioned private equity funds, the reason why Central Huijin Company bought the above-mentioned ETF products is because the index of such ETF products is highly representative, such as the CSI 300 Index almost includes the best performance in the A-share market. A group of listed companies with good fundamentals and growth can play a good role in stabilizing A-shares and bullish on the future trend of A-shares; second, these ETF products have a large asset management scale and good liquidity, which can meet the requirements of large funds such as Central Huijin for asset allocation liquidity; third, the lower rate of ETF products can significantly reduce the cost of entering the market and increasing positions of "national teams" such as Central Huijin.

"More importantly, Central Huijin's purchase of these A-share ETF products reflects the national team's high recognition of the low valuation of A-shares and the fact that the index is at the bottom of the range, which helps to enhance the confidence of various funds to enter the A-share market. He noted.

It is worth noting that due to the increased volatility of A-shares, Central Huijin has continued to increase its position in these ETF products to stabilize the market since the second half of last year.

"In the first quarter of this year, Central Huijin's A-share ETF products increased significantly stronger than in the second half of last year, indicating that the national team is more decisive in stabilizing the A-share market and boosting market confidence. The above-mentioned 10 billion scale multi-strategy private equity institutions said.

It is worth noting that the "national team" has increased its holdings of A-share ETFs, not only limited to broad-based ETF products such as CSI 300 and SSE 50, but also Guoxin Investment Co., Ltd., a subsidiary of China Guoxin Holdings Co., Ltd., has also increased its holdings in the CSI Guoxin Central Enterprises Technology Index Fund.

Some institutions have noticed that in the first quarter, E Fund Science and Technology Innovation 50 ETF received more than 11.8 billion shares from a large investment institution, and if it is estimated according to the net value at the end of the quarter, the cumulative purchase amount of this large investment institution in the first quarter reached about 10 billion yuan, and the market once thought that this large investment institution may be Central Huijin.

"Regardless of whether this large investment institution is Central Huijin or not, a significant trend is that the investment scope of the national team is no longer limited to broad-based ETFs, and science and technology ETFs are also their new investment targets, because this move can also share the dividends of the iterative upgrading of China's technology industry. The 10 billion multi-strategy private equity institution said bluntly.

Numerous capitals followed

It is worth noting that "national teams" such as Central Huijin continue to increase their holdings of A-share ETF products, which is boosting the confidence of more funds to invest in A-shares.

A number of private equity fund sources told reporters that as more and more public ETFs have disclosed the first-quarter increase data of the "national team" in recent days, their interest in the allocation of broad-based ETF products has also increased.

On the one hand, such ETF products include many high-dividend and high-dividend listed companies, which are in line with their high-dividend and high-dividend listed company allocation strategy, and on the other hand, such ETF products cover many high-performance listed companies, which can help subjective strategy private equity funds avoid the risk of stock selection errors. The above-mentioned private equity fund person pointed out. For quantitative strategy funds, they are studying the profit opportunities of statistical arbitrage strategies between the net value of ETFs and market prices, although such statistical arbitrage strategies have a relatively large workload, they can provide stable returns of 5%-7% per annum, which can enhance the overall return of quantitative strategy private equity funds.

A chief representative of the Asia-Pacific region of a European asset management institution told reporters that the "national teams" such as Central Huijin continue to increase their holdings of A-share ETF products, which also brings new inspiration to their allocation of A-shares. Specifically, in the A-share market, broad-based ETFs such as CSI 300 integer and SSE 50 index include many listed companies of central and state-owned enterprises, and the comprehensiveness and standardization of their social responsibility reports or ESG reports are often better than those of other A-share listed companies.

A multi-strategy private equity fund manager revealed to reporters that as the "national team" continues to increase its position in ETF products linked to the central enterprise innovation index and the central enterprise technology leading index, they will also aim at indexed investment products such as the Science and Technology Innovation 50 ETF.

"The country actively promotes the development of high-tech industries and emerging strategic industries, and such index products will continue to be increased by the national team, which can also generate higher investment security boundaries and potential high return space. He noted. Especially in the period of rapid change of investment styles in the A-share market, following the "national team" to invest in A-share ETF products may be able to obtain more stable investment returns in the medium and long term.

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