On January 12, the scale of Huaxia Shanghai Stock Exchange 50ETF (510050) exceeded 70 billion yuan, a record high, and firmly ranked first in the scale of stock ETF. Over the past month, other broad-based ETFs have also ushered in scale growth, and more than 33 billion yuan of funds have “fattened” the main wide-based ETFs. Fund sources said that the frequent inflow of funds into broad-based ETFs represents the warming of investors\’ willingness to layout value blue chips.
the scale of main broad-based ETFs increased
On January 12, the net inflow of Huaxia SSE 50ETF in a single day was 936 million yuan, and the net inflow in the last week was 2.017 billion yuan. As of the same day, the unit net value of Huaxia Shanghai Stock Exchange 50ETF was 3.22 yuan / share, with a scale of more than 70 billion yuan, a record high.
Huaxia SSE 50ETF was established at the end of 2004 and is one of the longest established broad-based ETFs. Huaxia Shanghai Stock Exchange 50ETF adopts the complete replication strategy to track the Shanghai Stock Exchange 50 index. Its constituent stocks include the 50 most representative stocks of Shanghai Stock Exchange, ranking first in the scale of stock ETF for a long time. However, due to the unsatisfactory trend of value blue chips in 2021, Huaxia Shanghai 50ETF fell 9.38% last year. Looking at the extension of time, Huaxia Shanghai Stock Exchange 50ETF has increased by more than 40% in the last three years of 2019, 2020 and 2021.
Recently, the scale of many broad-based ETFs has continued to rise. As of January 11, Huatai Bairui CSI 300 ETF had 11.719 billion fund shares, with a scale of 57.102 billion yuan, close to the highest level in three years; China Southern Securities 500 ETF has 6.475 billion fund shares, with a scale of 51.925 billion yuan, which is also at a high level in the past year.
Behind the scale growth is the continuous influx of funds. Data show that as of January 12, in the past month, the main broad-based index has received a net inflow of more than 33 billion yuan. Among them, Huatai Bairui Shanghai and Shenzhen 300etf received a net inflow of RMB 13.942 billion, Huaxia Shanghai Stock Exchange 50ETF received a net inflow of RMB 10.621 billion, and Nanfang Shanghai Stock Exchange 500etf received a net inflow of RMB 9.024 billion. Huaxia Kechuang 50ETF and harvest CSI 300etf received a net inflow of more than 3 billion yuan.
institutional bottom reading tool
For the massive inflow of funds into major broad-based ETFs, Lu Yayun, vice president of Huaxia Fund quantity investment department, explained: “this shows that investors\’ willingness to layout value blue chips has increased, and the expectation of stabilization and rebound of value blue chips has increased. When it is difficult to accurately judge the short-term industry rotation, the layout of wide-based ETF can not only capture the periodic market situation of the market, but also avoid the trouble of selecting the industry, so it often becomes the first choice for institutions.” He said that institutional funds have the characteristics of long term and large amount of funds. When configuring ETFs, they have high requirements for liquidity and scale. Wide base ETFs with good liquidity are one of the sharp tools for institutions to copy the bottom of the market.
So, does the inflow of funds mean that investors are optimistic about the allocation value of large cap value stocks, or the short-term band operation of institutions? Lu Yayun believes that at the current time node, there are investment opportunities at the level of Shanghai Stock Exchange 50 and Shanghai and Shenzhen 300 indexes. Since the CSI 500 index rose more in 2021, more funds chose to flow into the Shanghai 50 index, which has more opportunities to stabilize and rebound. “The constituent stocks of Shanghai Stock Exchange 50 index are mainly partial value targets such as food and beverage, banks and non banks, and there is expected to be a short-term switch between high and low funds.” Lu Yayun said.
Insiders said: “the oversold of blue chips in the market has brought opportunities for valuation repair, but we can\’t rule out the transaction attribute of some institutional funds.” This requires observing the changes in the scale of wide-based ETF. If there is no significant fluctuation in the follow-up, it means that the institution intends to make a long-term layout. From experience, compared with industry themed ETFs, many investors prefer strategic allocation when laying out wide-based ETFs.
