I. Market Overview

A-share market: Last week (05/20-5/24), the three major A-share indices fluctuated and declined. The Shanghai Index continued to fluctuate and pull back after hitting a recent high last Monday, falling below 3,100 points. As of last Friday, the Shanghai Index closed at 3088.87 points, down 2.07% for the whole week, the Shenzhen Securities Index closed at 9424.58 points, down 2.93% for the whole week, and the GEM index closed at 1818.56 points, down 2.49% for the whole week. The average daily turnover of the two markets last week was 0.85 trillion yuan, while Northbound Capital made a slight net purchase of 835 million yuan last week.

In terms of the industry sector: Last week, 30 CITIC Tier 1 industries rose less and fell more. Only 3 industries rose and 27 industries fell. Industries with relatively high increases: coal, electricity and utilities, agriculture, forestry, animal husbandry and fishing; industries with relatively high declines: real estate, light manufacturing, and comprehensive finance.

Judging from fund performance, fund products with themes such as heavy duty electricity, coal, photovoltaics, energy, and animal husbandry performed relatively well, while funds with themes such as real estate, vaccine biology, the Internet, fintech, and semiconductors performed relatively poorly.

II. Capital flow

The size of non-monetary ETFs decreased by 60.919 billion yuan last week, with a net inflow of 2,932 billion yuan. By type, the size of equity ETFs decreased by 43,066 billion yuan, with a net inflow of 4.916 billion yuan; the size of bond-type ETFs increased by 1,009 billion yuan, with a net inflow of 965 million yuan; the size of commodity ETFs decreased by 678 million yuan, with a net inflow of 111 million yuan; and the size of cross-border Hong Kong stock ETFs decreased by 13.645 billion yuan, with a net outflow of 1.09 billion yuan.

As of May 24, 2024, there were 957 ETFs in the market. The latest total size was 2439.945 billion yuan, a decrease of 62,429 billion yuan from the previous week.

A-share ETFs and cross-border ETFs ranked in the top two, with 1792,082 billion yuan and 309.578 billion yuan respectively, accounting for about 73.45% and 12.69%, respectively.

This week, the SSE 50 ETF had the largest net capital inflow, with an inflow of 2,237 billion yuan, of which Huaxia Fund's SSE 50 ETF had a net inflow of 2,383 billion yuan. The China Securities 500 ETF had the largest net outflow of funds, with a total outflow of 3.848 billion yuan, of which China Southern Fund's China Securities 500 ETF had a net outflow of 3.313 billion yuan.

Last week, capital re-purchased the Shanghai and Shenzhen 300 ETF, with a total net inflow of 1,457 million yuan, of which Penghua's Shanghai and Shenzhen 300 ETF had a net inflow of 983 million yuan and Harvest Fund's net inflow of 597 million yuan.

It is worth mentioning that last week's capital clearly favored bond ETFs. Among them, Huaan Fund's treasury bond ETF had a net inflow of 656 million yuan last week, Ping An Fund corporate bond ETF had a net inflow of 612 million yuan, and a net inflow of 590 million yuan from Bosch Fund convertible bond ETFs.

In terms of industry themes, capital favors banking, gaming, and semiconductor-themed ETFs. The China Lianan Fund semiconductor ETF had a net inflow of 506 million yuan last week.

In terms of capital outflows, capital has begun to be withdrawn from short-term ETFs, and Haifutong Fund's short-term finance ETF had a net outflow of 736 million yuan last week. In the last week of the major correction in Hong Kong stocks, capital also followed the trend and sold off Hong Kong stock ETFs. Among them, Huatai Berry Fund Hang Seng Technology ETF and Huaxia Fund Hang Seng Internet ETF had net outflows of 650 million yuan and 620 million yuan respectively.

III. The rise and fall rate of ETFs

Last week (2024/5/20 to 2024/5/24), the domestic broad-based index generally declined. The best performer last week was the Shanghai Stock Exchange 50, which fell 1.97%. The worst performer was Science Innovation 50, which fell 3.61%. Most ETFs in various industries fell last week, and real estate ETFs declined significantly. The real estate ETF, which had the lead in gains last week, fell 5.64% this week, a significant drop. The major styles were mostly down, and coal and photovoltaic ETFs bucked the trend last week. Most QDII ETFs fell last week. Huitian Fuguo Securities Hong Kong Stock Connect Innovative Drug ETF saw the biggest decline last week, with a yield of -8.78%.

The majority of bond ETFs rose. Among them, the Bosch Shanghai Securities 30-year Treasury Bond ETF had the highest yield, with a weekly yield of 0.50%; the lowest yield was the Bosch China Securities Convertible Bond and Exchangeable Bond ETF, which had a yield of -0.31% last week.

Commodity ETFs: Gold ETFs generally declined last week, with yields between -1.91% and -1.79% last week. Non-gold commodity ETF products generally rose last week. The Huaxia Feed Soybean Meal Futures ETF performed best, with a yield of 1.50% last week.

The Huaxia China Securities Green Power ETF ranked first in terms of yield last week, with a yield of 2.41%.

In terms of decline, the Innovative Drug ETF and Hong Kong Technology Stock ETF fell across the board last week. Huitianfu Fund's Hong Kong Stock Connect Innovative Drug ETF and Southern Fund Hang Seng Biotech ETF fell 8.78% and 8.54%, respectively.

4. New ETF products

In terms of product launches, there were a large number of newly listed ETFs last week. 4 ETFs were listed and 3 ETFs were established. Among them, two oil and gas themed ETFs, Yinhua and Invesco Great Wall, were established last week.

In terms of fundraising, 30 products will be in the fundraising period in the next issue, including 12 ETF products and 8 linked products. 3 ETFs, including the Huitianfu China Securities Oil and Gas Resources ETF, will end the offering.

In terms of reporting, a total of 6 index products were declared last week. The declared products are mainly OTC connections, and there are no ETF declarations yet.

5. Hot news

The size of public funds exceeded 30 trillion yuan for the first time

According to the latest data from the China Securities Investment Fund Industry Association, by the end of April, the size of public funds had broken the 30 trillion yuan mark for the first time.

The ETF market is now experiencing large-scale redemptions, and industry insiders are calling for a calm layout

Recently, many newly listed ETF products have seen this phenomenon: Among the newly launched products that have been raised in just two or three days, many of them only experienced massive redemptions on the first day of listing, and there are even examples where nearly half of them were redeemed in a single day. Of the ETFs listed in May, about half of the remaining shares are less than half of what they were at the time of listing, and some ETFs have less than 100 million shares

Public funds accelerate the deployment of ultra-long-term treasury bond ETFs

At present, several ultra-long-term treasury bond ETFs and their linked funds have submitted product materials for declaration, and some products have officially entered the acceptance stage. Industry insiders believe that with the issuance of ultra-long-term special treasury bonds, the allocation of public funds to treasury bonds will increase in the second quarter.

SEC Approves Ethereum ETF Listing

The US Securities and Exchange Commission (SEC) approved plans for spot Ether ETFs from the NYSE, the Chicago Board Options Exchange, and NASDAQ. However, the SEC still needs to approve the issuer's plans for this ETF, and has yet to fully approve the trading of spot Ethereum ETFs.