1. The previously popular cross-border ETFs have encountered many redemptions; 2. A considerable amount of funds have returned to the A-share market, highlighting the siphon effect; 3. Recently, the net asset value of cross-border ETFs has risen significantly, and many products have performed well this year.
Capital Link News reported on October 20th (Reporter: Wu Yuqi), "Now is a good time to enter the market", this is the current judgment of many investors.
From the perspective of capital trends, it is also evident that the previously popular cross-border ETFs have encountered many redemptions recently, with a considerable amount of funds returning to the A-share market, highlighting the siphon effect. At the same time, the overall premium rate of cross-border ETFs has also declined.
Market participants also pointed out that the A-share market previously experienced a pulse-like surge, followed by intense multi-party bargaining. Although the A-share market has experienced some pullback, incremental funds from channels such as residents' wealth, financial management funds, and foreign funds are still converging.
Cross-border ETFs have recently been sold off by funds.
Recently, overseas market fluctuations intensified, A-share trading volume increased, and some cross-border ETFs faced redemptions. Overall, according to Wind data, as of October 20th, a total of 44 cross-border ETFs (excluding Hong Kong stock ETFs) in the entire market have decreased by 4.651 billion shares compared to September 24th. The average decrease per share is over 0.1 billion shares, with over 70% of cross-border ETFs facing fund redemptions.
Specifically, the ETF with the largest decrease in shares is the Easy ETF of the CSI Overseas Internet ETF, which decreased by 1.309 billion shares compared to September 24th. The previously hot Nasdaq ETFs also faced many redemptions. For example, the China Merchants Nasdaq 100 ETF decreased by 0.526 billion shares, the Da Cheng Nasdaq 100 ETF decreased by 0.475 billion shares, the Huatai Bairui Nasdaq 100 ETF decreased by 0.266 billion shares, and the Huaxia Mitsubishi UFJ N225 ETF also decreased by 0.427 billion shares. In addition, there are 13 other cross-border ETFs with a decrease of more than 0.1 billion shares.
Some cross-border ETFs have also seen a reduction in their premium rates, but there are still products with high levels. As of October 18th, Invesco ChinaAMC Nasdaq Tech Index Fund had a current premium rate of 10.39%, Bosera S&P 500 ETF had a premium rate of 3.22%, Huaxia Nasdaq 100 ETF had a premium rate of 2.53%, and Huaxia Nomura N225 ETF's latest premium rate also dropped to 0.80%.
Even some cross-border ETFs have a slight discount, such as the Da Cheng Nasdaq 100 ETF with a discount rate of 0.25%, the Penghua Dow Jones Industrial Average ETF with a discount rate of 0.33%, and the Jiashi Germany DAX ETF with a discount rate of 0.69%.
Funds flowing back into A shares, favoring Shuangchuang ETFs.
Correspondingly, several ETFs tracking broad-based indices have seen significant capital inflows from September 24 to present. Among them, Shuangchuang-themed ETFs have seen a significant increase in shares. For example, Huaxia Shanghai Stock Exchange Sci-Tech Innovation Board 50ETF has increased by 16.785 billion shares since September 24, Jiashi Shanghai Stock Exchange Sci-Tech Innovation Board Chip ETF has increased by 14.061 billion shares, and Yifangda Growth Enterprise Board ETF has also increased by over 10 billion shares, reaching 11.097 billion shares.
In addition, ETFs with significant increases in shares include Yifangda Shanghai Stock Exchange Sci-Tech Innovation Board 50ETF, increasing by 9.285 billion shares, Huaan Growth Enterprise Board 50ETF increasing by 8.42 billion shares, and Huatai Bairui CSI 300 ETF increasing by 7.627 billion shares.
Of note, the much-anticipated A500ETF has also received favorable capital inflows. Among them, Guotai CSI A500ETF has increased by 6.689 billion shares since its listing, Nanfang CSI A500ETF has increased by 3.06 billion shares, while Yinhuafund, Huatai Bairui Fund, China Merchants Fund, Taikang Fund, and Fuguo Fund's A500ETFs have all seen increases of over 2 billion shares.
Many fund managers are accelerating their layout of Shuangchuang index funds. The official website of the China Securities Regulatory Commission shows that Fuguo Fund and Huitianfu Fund have submitted the Shanghai Stock Exchange Sci-Tech Innovation Board Chip ETF, Huabao Fund has submitted the Growth Enterprise Board Artificial Intelligence ETF, and Zhongou Fund has submitted the Zhongou Hang Seng Tech index feeder fund (QDII).
Many foreign institutional investors have recently expressed positive views on the Chinese market.
Morgan Asset Management stated that driven by policy expectations, improved liquidity, and a warming market sentiment, market activity has significantly increased. Core assets have undergone a period of adjustment and their valuations have been significantly restored. However, valuations of major broad-based indices are still near historical medians, indicating potential further upside.
Schroder Fund Deputy General Manager An Yun tends to be more bullish on the stock market bottom signal, but the valuation repair is approaching completion in the intense volatility, and the subsequent market fluctuations may gradually decrease, with stocks possibly diverging.
"We believe that the core reason for the clear signal of the stock market bottom is the significant strengthening of the attitude and policy measures of the decision-making level. In addition to the financial policies that everyone has recently seen, the atmosphere of public opinion has also significantly improved. Coupled with the overall market valuation at historically low levels before this round of rise, we believe that the probability of breaking the previous low is not high, and the market bottom signal is relatively clear. However, the drastic market fluctuations in the past few days have largely absorbed this policy change. The market expectations have run very fast, and it is more difficult for the policy to exceed expectations further." An Yun said.
"I am more bullish on dividend stocks, especially financial stocks. The policy of non-bank institutions pledging stocks to the central bank for loans is more bullish for high-quality, low-volatility long-term holding stocks. There will be more demand for dividend stocks. Policies that support mergers and acquisitions and eliminate stocks trading below net asset value are also relatively bullish for brokerage and other non-bank institutions," he added.
Cross-border ETFs have shown a strong trend.
Although some cross-border ETFs have been 'sold off', some have also risen sharply recently. Only 5 of them have a net value decline in the period from September 24 to now.
Specifically, among the 44 cross-border ETFs, the ETF with the highest net value increase from September 24 to now is Huatai Bairui CSI-KRX Semiconductor ETF, with an increase of 33.67%; Boshin CSI Global China Education ETF rose by 20.35%; China Merchants Fund, GF Fund, Jiashi Fund, and E Fund respectively rose by 19.49%, 17.15%, 17.10%, and 15.29% for the ETFs tracking the CSI Global China Internet Index, while Yinhe Industrial Bank Nanfang Dongying S&P China New Economy Industry ETF rose by 15.14%.
Some cross-border ETFs with significant net value increases have also experienced redemptions. For example, as mentioned earlier, EFund CSI Overseas China Internet ETF decreased by 1.309 billion shares as of September 24, while the net worth rose by over 15% in the same period, indicating that some funds exited at high levels. Meanwhile, Bosera CSI Global China Education ETF also had 0.105 billion shares redeemed.
In terms of performance this year, cross-border ETFs have performed well, with only 5 in negative returns, among which the aforementioned Boshin CSI Global China Education ETF has a net value decline of 15.32% for the year.
Invesco NASDAQ Technology ETF with the highest market cap this year, rose by the most, reaching 32.45%. E Fund overseas china internet ETF, E Fund MSCI USA 50 ETF, China Merchants global china internet ETF, these three products' net asset values have risen by over 25% year-to-date. GF overseas Chinese Internet 30 ETF, JS overseas Chinese Internet 30 ETF, Huaxia S&P 500 ETF, Bo Shi S&P 500 ETF, Nanfang S&P 500 ETF, Guotai S&P 500 ETF and a total of 17 cross-border ETFs have seen net asset value increases of over 20%.
