With the disclosure of the first quarterly report of the public offering, the latest scale of equity ETFs (exchange-traded funds) has also surfaced. In the first quarter of this year, the most favored ETF was the broad-based category, and many CSI 300 ETFs grew in scale, with three of them exceeding 100 billion yuan.
Among other types of broad-based ETFs, there are also products with the highest share growth such as the SSE 50, the Science and Technology Innovation 50, and the ChiNext Board. In addition, the share growth of many dividend ETFs has outpaced that of many industry-themed ETFs.
Sector-themed ETFs were stolen by broad-based ETFs, perhaps due to the sharp market volatility at the beginning of the year, with low-valued large-cap blue-chip stocks being more cost-effective than overvalued growth stocks. Combined with last year's annual report and this year's quarterly report data, Central Huijin Company may have subscribed for a large share of the relevant broad-based ETFs in the first quarter of this year. Does this mean that the current market style is still skewed towards large-cap blue chips?
Broad-based ETFs have surged
CSI 300 ETF has become the most sought-after ETF product in the market. According to the data of the first quarterly report of the public offering, the scale of the CSI 300 ETF under Huatai Berry, E Fund and Harvest all exceeded 100 billion yuan, and the scale of the CSI 300 ETF under Huaxia was also close to 100 billion. From the perspective of share growth, the share growth of the CSI 300 ETF under the four public offerings exceeded 10 billion yuan in the first quarter, and the share growth of the SSE 50 ETF under China AMC Fund also exceeded 10 billion.
Both the CSI 300 Index and the SSE 50 Index represent large-cap blue-chip stocks in the market. When the market fluctuated sharply at the beginning of the year, large-cap blue-chip stocks were the first to pour in, and then the index representing the small and mid-cap also gained funding. In the first quarter, the shares of many CSI 1000 ETFs and CSI 500 ETFs increased by more than 2 billion. The STAR 50 ETF and ChiNext ETF, which represent the growth sector, also received a large share of growth, second only to the SSE 50 ETF.
The share growth of a number of dividend-themed ETFs in the first quarter ranked behind the above-mentioned broad-based ETFs, and the dividend index corresponds to stocks with high dividends and high dividends, usually including some listed companies of central state-owned enterprises.
In contrast, growth-themed ETFs that have previously attracted the attention of investors have become a "hot potato". The data shows that semiconductors, wine, chips, pharmaceuticals, military industry, new energy vehicles and other industry theme ETFs decreased the most in the first quarter, most of these ETFs track growth industries, but the performance of related industries in the first quarter is average, and the stock prices of many constituent stocks fell sharply.
From the perspective of performance, ETFs such as resource stocks, central enterprises, state-owned enterprises, and banks rose first in the first quarter, while thematic ETFs such as biomedicine, as well as broad-based ETFs related to the Science and Technology Innovation Board, rose last.
It is continuously bought by large funds
Broad-based ETFs have been bought by a large number of funds when the market has plummeted, and the main funds behind them include Central Huijin. Central Huijin announced its purchase of the ETF on October 23, 2023, and will continue to increase its holdings in the future. On February 6, 2024, it once again announced that it fully recognized the allocation value of A-shares at that time, and had recently expanded the scope of ETF holdings and continued to expand the intensity and scale of its holdings.
According to the data of the first quarterly report of the public offering, at the end of the first quarter of Huatai Pineapple CSI 300 ETF, there was a case of institutional investors in the queue of a single investor holding more than 20%. The institution held 6.247 billion shares at the beginning of the first quarter. Combined with the ETF's annual report data last year, Central Huijin Company happened to hold 6.247 billion shares, ranking first among the top ten listed fund holders. It can be inferred that the institution may be Central Huijin Company, which subscribed for 26.356 billion shares of Huatai Berry CSI 300 ETF in the first quarter and held 32.603 billion shares at the end of the quarter.
According to the data of the above-mentioned CSI 300 ETF, the other 3 CSI 300 ETFs and 1 SSE 50 ETF can be subscribed in the first quarter. According to the statistics of the reporter of "International Financial News", the "institutions" that may be Central Huijin Company subscribed for 15.604 billion shares of Harvest CSI 300 ETF, 16.993 billion shares of ChinaAMC CSI 300 ETF, 45.706 billion shares of E Fund CSI 300 ETF and 15.867 billion shares of ChinaAMC SSE 50 ETF in the first quarter. In the first quarter, the single institution only subscribed and did not redeem many of the above-mentioned CSI 300 ETFs and SSE 50 ETFs.
In the context of the continuous inflow of large funds into broad-based ETFs, broad-based ETFs have become the main force of equity market issuance this year. According to Choice data, as of April 22, a total of 48 ETFs were issued during the year, with a total issuance scale of 31.07 billion yuan except for QDII funds, while the total issuance scale of equity funds was only 37.376 billion yuan. Among them, the ETFs that attract the most attention from investors are CSI A50 ETF and dividend theme ETF. The issuance scale of the former exceeded 1 billion yuan, and the number of issuance of the latter accounted for a relatively high proportion of industry-themed ETFs.
Where the market style is headed
At present, the market situation has changed from a rebound at the beginning of the year to a stable shock, and in the view of some industry insiders, ETFs tracking large-cap stocks are still relatively more popular, and ETFs in growth industries need to wait patiently for relevant policy catalysts.
In an interview with the International Financial News, a fund manager said that when choosing ETFs, he will focus on large-cap or growth-style products, and will allocate some small- and medium-cap products as supplements.
A recent research report by Huabao Securities pointed out that it is more optimistic about large-cap stocks. Historically, there is a strong seasonal pattern in the April earnings season, with the large market having a significant advantage over the small market. From the perspective of capital flow, the composite index of industrial capital and northbound capital construction shows that capital flow is more biased towards the broader market.
Regarding the investment opportunities of industry-themed ETFs, the research report also pointed out that as the "trade-in" related policies are advancing, we can pay attention to the investment opportunities in the corresponding industry chain.
Jiang Han, a senior researcher at Pangu Think Tank, told the International Financial News that broad-based ETFs received a large amount of capital inflows in the first quarter of this year, which usually reflects investors' optimistic expectations for the overall recovery of the market and the repair of valuations. As for the industry-themed ETFs that have undergone adjustments, he believes that the specific situation of each industry needs to be analyzed on a case-by-case basis. Generally speaking, when an industry has undergone a period of correction, if the fundamentals remain healthy and there are no fundamentally negative changes, then the adjusted price may provide a better buying opportunity. However, this does not mean that all adjusted industries are worth investing in, as each industry has different reasons for adjustment and future development prospects.