In the recent rapid rebound of the A-share market, as an investment tool for a "basket of stocks," ETFs have gained favor with investors due to their effective capture of market trends. Coupled with word-of-mouth recommendations from various market participants, ETFs have swiftly "flown into ordinary households." Whether it's trading indicators such as transaction volume and net inflow, or discussions and attention on social platforms about ETFs, they have reached unprecedented levels.
The current popularity of index funds represented by ETFs has led industry insiders to believe that, in addition to the many advantages of ETFs such as low cost, diversified investment, real-time strength, high liquidity, good transparency, easy operation, and savings on individual stock learning costs, on one hand, the dramatic changes in the equity market have increased the value of passive product allocation; on the other hand, the regulatory authorities have placed great emphasis on index investments represented by ETFs, and fund companies have comprehensively enhanced investors' sense of experience and gain.
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With the maturation of the capital market and the improvement of regulatory systems, market efficiency has been enhanced, and information transparency has been strengthened. Industry insiders have noticed that institutional investors are gradually recognizing the advantages of ETFs and viewing them as an important tool for optimizing asset allocation. Against the backdrop of strong market performance and increased financial awareness, individual investors' interest in ETFs is also on the rise. The continuous growth and development of the ETF market in the future, with more and more investors and long-term funds entering the market, will help improve market stability and maturity.
The "one-click investment" feature has attracted a lot of attention. Since the release of a series of significant favorable policies on September 24, the A-share market has rebounded sharply. Wind data shows that as of October 10, mainstream broad-based indices in the A-share market have generally risen by more than 20%. In this round of the market, ETFs have become a popular investment tool for a large amount of capital to enter the market. As of October 9, the net inflow of stock ETFs has exceeded 280 billion yuan, with the number of new fund shares reaching as many as 166.868 billion shares.
On the first trading day after the National Day holiday (October 8), the trading enthusiasm in the A-share market was high, and the cumulative transaction volume of the top twenty ETFs on that day exceeded 350 billion yuan, even surpassing the total transaction volume of the top twenty stocks on that day. Among them, ETFs such as Yifangda ChiNext ETF, Huatai-Perry CSI 300 ETF, Yifangda SSE STAR 50 ETF, Southern Zhongzheng 500 ETF, and Huaan ChiNext ETF all set new daily transaction volume records, with the daily transaction volume of Yifangda ChiNext ETF even rarely breaking through 40 billion yuan.
On a single trading day of October 8, the net inflow of funds into stock ETFs reached over 100 billion yuan, and the total asset scale of stock ETFs also increased sharply from 2.03 trillion yuan on September 23 to 3.08 trillion yuan, with a scale increase of over one trillion yuan. The "double innovation" theme ETFs that have rebounded sharply recently have attracted market attention. The leading product, Yifangda ChiNext ETF, received a net inflow of funds of 26.61 billion yuan on that day, ranking first among ETFs, and the fund scale broke through the 100 billion yuan mark in one fell swoop; Huaxia SSE STAR 50 ETF also joined the "100 billion ETF" camp on the same day.
To seize the important opportunity of the market rebound, many public institutions, securities firms, and third-party internet sales channels are also actively carrying out ETF investment education services. There is an endless stream of ETF investment education content, such as "What is ETF, why is it sought after by the market," "How to buy ETFs after opening an account overnight," "How to use ETFs to 'overtake on the inside lane,'" "How to play with ETFs in a bull market," "Continuously rising, which ETFs are not overheated," and so on.
On many social platforms, investors' discussions about index products represented by ETFs are also very enthusiastic. There are a large number of posts such as "I am a pure novice, seeking advice on ETFs," "Which one should beginners buy directly," "What are the differences between these ETFs," "Can ETFs with a high premium rate still be bought?" On the Oriental Fortune Fund Hot Search List on October 10 (the most searched number of people in the past 24 hours), among the top twenty fund products, nearly 90% are index products, including popular products such as "double innovation," Beijing Stock Exchange 50, Hang Seng Technology, chip, and securities that have rebounded sharply recently.
"Heaven, Earth, and People" all contribute to development.As the "vanguard" of the market rebound, ETFs, through their nearly full-allocation "basket of stocks," have swiftly captured the trend of this round of market movements. Wind data shows that from September 24 to October 9, among the 25 public funds with a return rate exceeding 60%, there were as many as 23 passive index-type products, with ETFs accounting for nearly 20 of them.
Hu Jie, Director of Index Investment at Huabao Fund and General Manager of the Index Research and Investment Department, introduced to China Securities Journal that the reason why index funds represented by ETFs can quickly capture the market trend in this round of market increases is mainly due to their high elasticity, high transparency, trading convenience, and diversified investment, which are characteristic of their tool-like product features.
"Firstly, ETFs operate with a high position, which gives them stronger offensive capabilities in a bull market; secondly, ETFs use a 'physical redemption' mechanism, which ensures that they maintain a high position throughout the exchange process between 'a basket of stocks' and ETF shares; thirdly, ETFs reflect the overall market trend or the performance of a specific industry or sector, allowing investors to quickly judge the ETF's holding combination based on the index it tracks, facilitating the capture of industry opportunities or market beta returns; fourthly, investors can directly trade ETFs in the secondary market, buying and selling based on real-time market conditions, with low transaction costs and good liquidity." In Hu Jie's view, ETFs can be said to be a product of a bull market.
The current popularity of index funds represented by ETFs, a person in charge of the index investment department of a large public institution in Beijing frankly stated, can be described as "heavenly timing, geographical advantage, and harmonious people." On one hand, the equity market is changing rapidly, making it more difficult for active products to achieve excess returns, while the value of passive products in asset allocation is increasing; on the other hand, the regulatory authorities have attached great importance to index investments represented by ETFs, promoting the continuous expansion of ETF targets, enriching investment choices, while fund companies comprehensively enhance investor experience and satisfaction in product layout, investment companionship, and product fee reduction.
Considering the product's own characteristics, the person mentioned that compared to investing in individual stocks, investing in ETFs, which "package" a portfolio of high-performing stocks, has many advantages such as low cost, diversified investment, strong timeliness, high liquidity, good transparency, and simple operation, saving the learning cost of researching individual stocks. Therefore, more and more investors are beginning to recognize the investment value of ETFs.
Improving the Market Institutionalization Level
Xu Zheyuan, Assistant General Manager of Huaan Fund, told China Securities Journal that as the capital market becomes more mature and regulatory systems become more perfect, market efficiency is improved, and information transparency is enhanced, both domestic and foreign markets have observed an increase in the difficulty for actively managed funds to achieve excess returns. The A-share market is no exception, with the gap between the performance of benchmark indices and the performance of actively managed funds gradually narrowing.
"In recent years, institutional investors have gradually realized the advantages of ETFs and have regarded them as an important tool for optimizing asset allocation. Large institutional investors represented by Central Huijin have significantly increased their investment in ETFs over the past year. At the same time, against the backdrop of strong market performance and enhanced financial awareness, individual investors' interest in ETFs is also on the rise, making ETFs a preferred tool for many new and old investors to capture market opportunities." Xu Zheyuan summarized.
In this market's rapid rebound, investors using traditional individual stock investment methods may "miss the boat," failing to keep up with the index rebound in time. Index funds represented by broad-based ETFs provide investors with a simpler and more direct investment tool. Zhang Yun, General Manager of Yongying Fund's Index and Quantitative Investment Department, expects that in the future, more and more investors may tend to choose ETFs as a means of asset allocation. The situation of incorrect pricing of individual stocks may decrease, thereby enhancing the overall market's effectiveness.
In Hu Jie's view, the advantages of ETFs may have a very profound impact on the investment ecosystem of A-shares. For individual investors, as a collective investment tool, ETFs can greatly diversify risks. The diversity and professionalism of their investment portfolios can provide more stable investment options. Moreover, by investing in a "basket of stocks," ETFs can spread risks across multiple targets, thereby reducing the impact of fluctuations in a single stock on the investment portfolio.For institutional investors, Hu Jie stated that, on one hand, industry and thematic ETFs can to a certain extent replace individual stock research, greatly enhancing the investment efficiency of institutions and facilitating rapid investment deployment in specific industries or themes. On the other hand, broad-based ETFs are excellent asset allocation tools, covering leading companies across multiple industries and sectors, with high liquidity and stability, providing great convenience for asset allocation of institutional investors to achieve a balance between risk diversification and maximizing returns.
"From the perspective of industry ecology, the status of ETFs in the A-share market is gradually increasing, which will inevitably be accompanied by a continuous improvement in the institutionalization of A-shares. As the ETF market continues to grow and develop, more and more institutional investors and long-term funds will enter the market, which will help to enhance the stability and maturity of the market. Institutional investors usually have more professional investment concepts and risk control capabilities, and their participation will promote a more rational and standardized market," Hu Jie believes that ETFs, as a tool suitable for long-term investment, can attract more long-term funds into the market, reduce short-term fluctuations, promote healthy market development, and at the same time, will drive market innovation and reform, improve market efficiency and competitiveness, and lay a solid foundation for the long-term stable development of the A-share market.