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Amid the introduction of several significant favorable policies, a new benchmark for domestic broad-based index products—the first batch of ten CSI A500 ETFs—has been fully established, with an additional 20 billion yuan in funds about to enter the market "on the frontline."

Industry insiders believe that ETFs, characterized by their high position and high transparency, can effectively enhance market stability and efficiency, playing a positive role in serving the real economy, promoting long-term capital into the market, and assisting patient capital in laying out high-quality assets.

The first batch of CSI A500 ETFs has been fully established

On September 28, Taikang Fund announced that Taikang CSI A500 ETF was established, with the fund contract taking effect on September 27. The net subscription amount during the subscription period was 2 billion yuan, and the number of valid subscribing households was 10,473. So far, the first batch of ten CSI A500 ETFs has announced their establishment, all reaching the initial subscription scale limit of 2 billion yuan and triggering proportionate allocation. In the future, they will inject an additional 20 billion yuan into the market.

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Looking back, Harvest CSI A500 ETF was the first to be established on September 20, followed by the establishment of Morgan Asset Management and Jing Shun Great Wall Fund's CSI A500 ETFs on September 24. Hua Tai Bo Rui Fund, Fu Guo Fund, and Nan Fang Fund's CSI A500 ETFs were established on September 25, and Guo Tai Fund, Zhao Shang Fund, and Yin Hua Fund's CSI A500 ETFs were established on September 26.

Among the first batch of ten CSI A500 ETFs, Morgan CSI A500 ETF had the highest number of valid subscribing households, reaching 22,879; Fu Guo Fund, Yin Hua Fund, and Guo Tai Fund followed closely, with the number of valid subscribing households for their CSI A500 ETFs all exceeding 20,000; Zhao Shang Fund, Jing Shun Great Wall Fund, Nan Fang Fund, and Tai Kang Fund's CSI A500 ETFs all had more than 10,000 valid subscribing households.

In terms of allocation, Yin Hua Fund, Harvest Fund, Jing Shun Great Wall Fund, Guo Tai Fund, and Nan Fang Fund adopted the "end-of-day proportional confirmation" principle for the allocation of their CSI A500 ETFs, with the allocation ratio of Yin Hua CSI A500 ETF falling below 50%; Morgan Asset Management, Zhao Shang Fund, Tai Kang Fund, Fu Guo Fund, and Hua Tai Bo Rui Fund adopted the "full-process proportional confirmation" principle for the allocation of their CSI A500 ETFs, with the allocation ratio of Morgan CSI A500 ETF falling below 80%.

Several significant policies have helped the development of broad-based ETFs

Recently, Wu Qing, the chairman of the China Securities Regulatory Commission, stated that further optimization of equity fund product registration will be carried out, and the innovation of broad-based ETF and other index products will be vigorously promoted. More products, including small and medium-sized ETF funds such as the ChiNext Board and the STAR Market, will be launched in a timely manner to better serve investors and the country's strategic development and new quality productive forces.

Morgan Asset Management stated that the innovation of products such as broad-based ETFs will further activate market liquidity and increase the attention to broad-based indices. It also provides investors with more diverse investment options for participating in China's capital market. The launch of more small and medium-sized ETFs, such as the STAR Market and the ChiNext Board, is beneficial to the liquidity of small and medium-sized market value stocks on the one hand, and on the other hand, it facilitates investors to participate in specific A-share sectors in a low-cost and high-efficiency manner.JPMorgan Asset Management also believes that ETFs will play a significant role in the convenience of swaps between securities, funds, and insurance companies, including broad-based ETFs such as the CSI 300 ETF and the CSI 500 ETF, which are likely to attract more attention from medium and long-term capital, with their scale expected to increase further. In addition, market value management will drive a continuous enhancement of the investment value of the main index constituent stocks, and in the future, the main indices and their constituent stocks will attract more market attention.

The recently much-discussed "Guiding Opinions on Promoting the Entry of Medium and Long-term Capital into the Market" also mentioned the establishment of a "fast-track approval channel for ETF index funds". Fu Guo Fund stated that ETFs, with their characteristics of high position and high transparency, effectively enhance the stability and efficiency of the market. By establishing a fast-track approval mechanism for ETFs, the listing speed of ETFs can be accelerated, providing investors with more choices.

In the view of Guotai Fund, ETFs, as one of the important infrastructures of the capital market, play an increasingly important role in serving national strategies, serving high-quality economic development, and guiding resource allocation. At the same time, they also play a positive role in serving the real economy, promoting the entry of long-term capital into the market, and helping patient capital to layout high-quality assets.

The attractiveness of A-share assets continues to increase.

As the CSI 500 ETF is about to be listed, the A-share market has ushered in multiple favorable policies, and investor sentiment has quickly warmed up, accumulating strength for the market to do more.

Huatai Baorui Fund analysis shows that overseas, the Federal Reserve has started a rate cut cycle, and some overseas central banks have successively lowered benchmark interest rates. The marginal improvement in global liquidity is expected to further enhance the attractiveness of A-share assets, making them a destination for global capital re-allocation. Domestically, a series of incremental policies including reserve requirement ratio cuts, interest rate cuts, reduction of existing housing loan interest rates, and the creation of new monetary tools have been introduced, which has greatly boosted market confidence.

Taikang Fund also stated that the heavyweight voice of the decision-making layer is conducive to promoting the decline of capital costs, showing the urgent attitude of policy efforts, boosting market confidence, pulling the market's short-term rebound, and there is also room for growth in the medium and long-term dimensions.

Looking forward to the future market, Taikang Fund believes that the excess returns of investing in industry leaders are significant. In addition, sectors with high sensitivity to interest rates, such as technology growth, domestic demand sectors where policy efforts are directed, and overseas expansion sectors, may benefit marginally. Moreover, undervalued Hong Kong stocks are expected to attract funds allocated to emerging markets, ushering in a new round of investment opportunities.