At the moment of the 25th anniversary of the establishment of public funds in China, equity funds, which are a key part of residents' wealth allocation, are ushering in a historic boom.

For the first time, the financial management scale of banks that occupied the “C position” of residents' financial management in the first half of this year was surpassed by public funds.By the end of June 2023, the total size of public funds was 27.69 trillion yuan, and the continuing scale of the bank wealth management market was 25.34 trillion yuan, surpassing it for the first time in history.

Two months have passed, and public funds have climbed further from $27.69 trillion to $28.8 trillion. However, there is a clear division within the industry. The size of active equity funds shrunk by nearly 200 billion dollars in the first half of the year, and the size of exponential funds bucked the trend. 2023 is a well-deserved ETF year.

On September 4, ETFs set a historic moment. The total scale of stock ETF management exceeded 1.7 trillion yuan. Only 1 month had passed since it officially surpassed 1.6 trillion yuan on August 1. By the end of August this year, over 430 billion dollars had flowed into stock ETFs, and in August alone, there had been a sharp inflow of 160 billion yuan.

Among them, on August 7, the Huatai Berry Shanghai and Shenzhen 300 ETF officially became the first 100 billion non-commodity ETF to be publicly raised in China. On September 5, the share of Huaxia Science and Technology Innovation's 50 ETF broke 100 billion shares for the first time, making it the first non-commodity ETF to be publicly raised in China with a share exceeding 100 billion dollars.

What's more worth mentioning is that during the period when the issuance of sovereign equity funds was clearly cold this year, ETFs carried the banner of the emerging market. As of September 8, 32 new funds had been set up in the fund issuance market during the month, raising a total of 23.654 billion yuan, an increase of 60% and 71%, respectively, over the same period last month.

Below, ETF Evolution will use five charts to comprehensively analyze the latest ETF development pattern from ETF stock size, ETF scale growth, ETF share growth, ETF subscription growth rate, and ETF issuance.

1. Expansion of the ETF 10 billion club

Judging from the size of ETFs in stock, as of September 8, the number of 10 billion ETFs had been further expanded to 35, 5 more than last year.

Overall, broad-based ETFs will still be the most popular direction for capital in 2023.In particular, the Shanghai and Shenzhen 300 ETF, the Science and Technology Innovation 50 ETF, and the Shanghai Stock Exchange 50 ETF. In terms of industry topics, the 2023 Stock ETF, the China Securities ETF, the China Securities ETF, the Semiconductor ETF, and the Pharmaceutical ETF are the leaders of the 10 billion club.

Specifically, the largest is the Huatai Berry Shanghai and Shenzhen 300 ETF. The latest scale is 118.950 billion yuan, an increase of 41.4 billion yuan compared to 2022. Huaxia Science Innovation 50 is a well-deserved market darling this year. The annual decline was as high as 5.88% until September 8, and the scale still bucked the trend and increased by 43.03 billion yuan this year.

Another typical large-cap broad-based product, the Huaxia SSE 50 ETF, has grown slightly less this year, with only an increase of 4.437 billion yuan compared to last year. Instead, the growth of the two small-cap broad-based products is even more impressive. The Huaxia China Securities 1000 ETF and the Southern China Securities 1000 ETF have increased by 7.249 billion yuan and 6.211 billion yuan respectively this year.

What is quite surprising is that with the annual decline of the Yifangda GEM ETF being as high as 12.33%, the scale can still increase by 19.808 billion yuan. The China Securities 500 ETF, which fell slightly during the year by 1.36%, is the only broad-based product that has shrunk by 1.36% during the year. The latest scale of the China Southern China Securities 500 ETF is 60.345 billion yuan, a reduction of 5.095 billion yuan compared to last year.

After searching the data, it was discovered that the Harvest China Securities 500 ETF and Tianhong China Securities 500 ETF, which track similar indices, have all shrunk in scale. Perhaps because compared with indices such as the Shanghai and Shenzhen 300, China Securities 1000, and even China Securities 2000, the China Securities 500 is a bit less stable than the general market, and is not as aggressive as the China Securities 1000.

In addition to the Southern China Securities 500 ETF, there are also four products that have shrunk in scale in 2023, namely the Huaxia Hang Seng ETF, the Huatai Berry Photovoltaic ETF, the Huitianfu Consumer ETF, and the Cathay Pacific Military ETF.

There are 7 new ETF products that have joined the 10 billion club, namely Penghuajiu ETF, Huatai Berry Hang Seng Technology ETF, Fuguo Hong Kong Stock Connect Internet ETF, Huaxia China Securities 1000 ETF, Bosch Hang Seng Healthcare ETF, Huaan Gold ETF, and Huaxia New Energy Vehicle ETF. The E-Fangda H-share ETF fell out of the 10 billion dollar list.

Judging from the list of 10 billion ETFs held by the manager, Huaxia Fund took first place. It has 9 10 billion ETFs, followed by Yi Fangda Fund, which has 5 10 billion ETFs. The third place is Huatai Berry Fund, which has 4 10 billion ETF products.

2. The king of ETF size expansion in 2023

Judging from the growth in the size of ETFs, capital particularly favors broad-based ETFs. In particular, the Shanghai and Shenzhen 300 Index, the Science and Technology Innovation 50 Index, and the China Securities 1000 Index are the most prominent players in the broad-based index.

The king of scale expansion in 2023 has no suspense over the two Big Macs. Compared with the Huaxia Science Innovation 50 ETF and the Huatai Berry Shanghai and Shenzhen 300 ETF, the two broad-based ETFs, increased by 43.3 billion yuan and 41,448 billion yuan respectively in 2022.

Overall, capital favors the China Transport Index Shanghai and Shenzhen 300 ETF, Huatai Berry's Shanghai and Shenzhen 300 ETF, Shanghai and Shenzhen 300 ETF Yi Fangda, Harvest Shanghai and Shenzhen 300 ETF, and Huaxia 300 ETF, and the Huaxia 300 ETF Fund, which have increased their total size by 70,346 billion yuan this year.

The Science Innovation 50 Index followed. The Huaxia Science Innovation 50 ETF and the Yifangda Science and Technology Innovation Board 50 ETF increased by 54.832 billion yuan in total this year.

In terms of industry topics, sectors such as semiconductors, healthcare, Hang Seng Internet, and alcohol are the most popular direction of capital this year. In particular, pharmaceutical-themed ETFs are funded from the bottom of the year to the middle of the year.The total scale of the Huabao Medical ETF, the E-Fangda Pharmaceutical ETF, and the Bosch Hang Seng Healthcare ETF in the table increased by 22.645 billion yuan this year.

From the perspective of a fund manager, Huaxia Fund is also number one, with 7 of its ETF products selected as the king of scale expansion. Efangda Fund followed, with 4 of its fund products selected. Three products of Huatai Berry Fund, which ranked third, were selected.

3. The King of ETF Net Subscriptions in 2023

After watching the increase in the size of ETFs, it is also very necessary to look at the increase in ETF share in 2023, because this clearly shows the types that are promising for real money and real money.

Judging from the increase in the absolute value of ETF shares, Huaxia Fund's Science Innovation 50 ETF once again won the championship. As of September 8, its share soared by 48.924 billion shares during the year, an increase of 96% over the previous year. This means that in just 8 months, the share of the Huaxia Science Innovation 50 ETF has almost doubled. It is truly worthy of being the first equity ETF in China with a share exceeding 100 billion dollars. The share of another Huabao Science and Technology Innovation Board 50 ETF also increased by 13.623 billion shares during the year.

Because the semiconductor industry accounts for more than half of the Science and Technology Innovation Index, similar investments include the Fuguo Semiconductor ETF, the Huaan Chip ETF, the Cathay Pacific Chip ETF, and the Huaxia Chip ETF.This means that in the top 25 ETF net subscription rankings in 2023, chip-themed ETFs occupied 6 places, with a total share increase of 96.781 billion shares.

Second, the second and third largest share increases were pharmaceutical-themed ETFs. The shares of Huatai Berry Medical ETF and Yifangda Pharmaceutical ETF increased by 33.42 billion shares and 22.558 billion shares respectively during the year.

Meanwhile, the shares of Efangda Hang Seng Healthcare ETF, Huabao Biopharmaceuticals, Huatai Berry Innovative Drug ETF, and Huatai Berry Hong Kong Stock Innovative Drug ETF increased by 16.76 billion shares, 4.81 billion shares, 6.192 billion shares, and 4.775 billion shares respectively during the year.

This means that in the top 25 ETF net subscription rankings in 2023, pharmaceutical-themed ETFs also occupied 6 places, with a total share increase of 88.436 billion shares.

In addition to chips and pharmaceuticals, capital in 2023 is also particularly optimistic about Hong Kong stocks, science, and online stocks. ETFs on this subject occupy 4 positions in the list.The shares of the League of Nations Hang Seng Internet ETF, E-Fangda Hong Kong Stock Connect Internet ETF, E-Fangda Hang Seng Technology ETF, and GF Hang Seng Technology Index ETF increased by a total of 48.554 billion shares during the year.

From the manager's point of view, Huaxia Fund was selected as the top ETF in 2023 with 7 of its ETF products and continued to win the top spot, followed by Yi Fangda Fund, with 4 of its ETF products selected. The third place is Huatai Berry Fund, which has 3 ETF products selected.

4. The king of ETF share growth in 2023

After watching the increase in the absolute value of ETF shares, let's continue to look at which products are growing the fastest in ETF shares, and we can see which products have the potential to accumulate and lose weight.

As can be seen from the table, the top three with the fastest share growth in 2023 were the ETFs with the themes of chips, pharmaceuticals, and Hong Kong stocks. The shares of the Harvest Science and Technology Innovation Chip ETF, the Guangfa Hong Kong Stock Innovative Drug ETF, and the GF Hang Seng Technology ETF Index all grew more than 20 times this year.

Furthermore, the share growth rate of Southern China's state-owned enterprise ETFs was as high as 2260% this year. The share growth rates of the Cathay Pacific Central Enterprise Win-Win ETF, the Low Dividend 100 ETF, the Huatai Berry Dividend Low Wave ETF, and the Ping An State-owned Enterprise Win-Win ETF during the year were 949%, 645%, 602%, and 304%, respectively. It can be seen that in the first half of the year, driven by fanaticism about China's special evaluation theme, capital recognition of state-owned enterprise reform and high-paying varieties.

At the same time, investing in Japanese stocks was popular globally in the first half of the year. The three domestic ETF products that track the Nikkei 225 Index took advantage of the popularity to achieve a sharp rise in share growth. The shares of Huaxia Nikkei ETF, ICBC Credit Suisse Nikkei ETF, and Nikkei 225 ETF Yi Fangda grew at 632%, 389%, and 367% respectively.

From the perspective of fund managers, Huaxia Fund is in first place with no suspense. Four of its products were selected for the list, while Huaan Fund and Yi Fangda Fund were selected and tied for second place with their 3 ETFs. Wells Fargo Fund and Guangfa Fund were selected and tied for third place with 2 of their products.

5. ETFs carry the banner of a new public offering

After reading the current state of the stock market, further sorting out the current state of the emerging market will be very helpful for us to understand the ETF year.

There is no doubt that this year has been a cold year for XIDF. According to Wind statistics, in January-August of this year, newly established funds raised a total of 668.1 billion yuan, a year-on-year decrease of 31%.

However, the new ETF market is in full swing. As of September 1, 2023, a total of 90 new ETF products have been issued in the public offering market, with a total fundraising scale of 54.507 billion yuan.

More particularly, E-Fangda Fund is the public offering company with the most new ETF products. It has issued a total of 10 new ETF products, raising a total of 4.72 billion yuan. Second place is Guangfa Fund, which issued a total of 6 ETFs this year, raising a total of 4.997 billion yuan. China Southern Fund, which ranked third, also issued 6 ETFs. The fundraising scale was smaller than that of the second place, at 2,941 billion yuan. China Merchants Fund and Penghua Fund, which ranked second, also issued 6 ETFs this year, with a fundraising scale of around 2.9 billion yuan.

Meanwhile, Huaxia Fund also issued 6 ETF products this year, raising 1,173 million yuan.Although Huitianfu Fund and Bosch Fund only issued 5 ETFs this year, the scale raised was actually as high as 5 billion yuan.

Looking specifically at the 20 most sought-after ETF products this year, the Bosch Science and Technology Innovation 100 ETF topped the list with a fundraising scale of 2,661 billion yuan, followed by the influence of the “valuation system with Chinese characteristics”. Central enterprise state-owned enterprise theme funds continue to be popular. 3 central enterprise shareholders returned to ETFs, the first batch of 3 China Securities and New Central Enterprise Technology led the ETF, and the first batch of 3 central enterprise modern energy ETFs.In particular, all three central enterprise shareholder returns to ETFs were overfunded, with a total subscription exceeding 6 billion yuan, triggering proportional placement.

Recently, with products such as the Science Innovation Growth ETF, the Science Innovation 100 ETF, the China Securities 2000 ETF, and the Xinchuang ETF being approved one after another, the ETF market has also ushered in its busiest “distribution season” since this year.

One trend worth paying attention to is that the ETF market recently focuses on being expensive and quick to make quick decisions. A number of China Securities 2000 ETFs and China Securities 1000 enhanced strategy ETFs were quickly raised.

It can be seen that various fund companies do not “roll up” the size of the initial fund launch. More goals are to hope to go public as soon as possible and strive to increase the scale through better performance and service.

Also, after the regulatory authorities proposed “relax the registration conditions for index funds and improve the efficiency of index fund development” at the end of August, fund companies began a new round of ET layout. The layout of public ETFs showed two major trends: one is that there are more and more themed ETFs that track industry segments; second, small and medium-sized public offerings are entering the market one after another, and ETFs are no longer just a “top game.”

Industry insiders said that focusing on index segmentation to create differentiated advantages is indeed the future development trend of ETFs. This strategy may bring more opportunities for small and medium-sized fund companies to overtake the curve, but due to factors such as layout costs and industry segmentation capacity, fund companies still have to face profit and cost issues, as well as product strategy innovation issues under homogenization.