According to the Financial Associated Press on November 29 (Reporter Yan Jun), after two years, the chinext 50 index welcomes a new etf product.

A reporter from the Financial Associated Press learned from industry sources that on the morning of November 29, seven chinext 50 etf products including huaxia fund, yifangda fund, wanjia fund, fuquan fund, guotai fund, industrial and commercial bank credit fund, and jia shi fund were approved, all of which were reported this month and were approved for issuance in just over ten days.

The first chinext 50 etf was issued by huaan fund in 2017 and was called "chuang blue chip" against the backdrop of the A-share blue chip narrative at that time. This single product state persisted until the end of 2022 when Invesco Great Wall and Penghua Fund prominently joined the chinext 50 etf. In addition, the chinext 50 index also has one off-exchange index fund, which was first issued by jiaoyin shiluode in 2019 and is also the only chinext 50 index fund.

With the addition of these seven fund companies, the chinext 50 index tracking etf will expand to ten. The inclusion of major firms like huaxia, yifangda, jia shi, and fuquan indicates that the competition is becoming fierce among these companies, suggesting changes in the landscape of chinext 50 etf.

Seven players have entered the chinext 50 etf market.

On November 29, huaxia fund, yifangda fund, wanjia fund, fuquan fund, guotai fund, industrial and commercial bank credit fund, and jia shi fund secured the necessary approval for the zhongzheng A500ETF.

In recent years, the demand from investors for indexes related to gem has been steadily increasing, with the scale of ETFs tracking gem-related indexes growing from 37.1 billion yuan to 189.3 billion yuan in the past three years. The growth potential is the main reason fund companies are optimistic.

The fund manager of the quant investment department at Huaxia Fund, Dan Kuan, stated that the GEM is a very important sector in the A-share market. Currently, there are 1,361 listed companies, accounting for nearly half of the Shenzhen market, with a market cap of about 12.67 trillion. The chinext 50 is a competitive broad-based index on the GEM. Based on historical experience, the long-term cumulative returns between the chinext price index and the chinext 50 are not significantly different, but the chinext 50 has relatively higher volatility and returns during bullish phases. The chinext 50 has a relatively higher beta compared to the chinext price index, and the risk-return characteristics of the two indices differ and each has its own features. From the perspective of index characteristics and supplementing the product line, the chinext 50 is worthy of allocation.

Originally planning to reform old products, Huaxia Fund ultimately chose to report new products. The company stated that there is a large space for industrial development brought about by autonomous control and technological innovation. There are many symbols in the GEM that meet the direction of new productive forces, and the market's investment demand for the GEM is also expected to increase further. The GEM primarily provides a direct financing platform for growth-type innovative enterprises focusing on "three creations (innovation, creation, and creativity) and four new (new technology, new industry, new business forms, and new models)." The five industries of new generation information technology, high-end equipment manufacturing, new energy, new materials, and biomedical have become the main force of newly listed companies on the GEM, with advantageous industries showing a clustered development trend.

New products are about to enter the market, especially as leading manufacturers are coming in strong, while companies with old products are also actively expressing themselves. Invesco and Zhang Xiaonan, the fund manager of the innovation investment department, pointed out that the transaction volume level of the chinext index is already among the forefront of major broad-based indices, reflecting a high trading sentiment among investors. Among them, the net income attributable to the parent of the chinext 50 index maintains positive growth, and the roe (ttm) still leads various broad-based indices. From a valuation perspective, the chinext 50 is still at an acceptable level, with a high price-performance ratio. Regarding investment costs, the management and custody fees for the chinext 50 etf and its connecting funds are 0.15% per year and 0.05% per year respectively, which are also among the lowest rates in existing similar products.

Is the pattern of "creation blue chips" changing?

In the pattern of the chinext 50 etf, there are already three products operated by Huasan Fund, Invesco Great Wall Fund, and Penghua Fund. Among these, the Huasan chinext 50 etf has the largest scale, with the latest scale exceeding 30.192 billion, making it a massive broad-based etf. The Invesco Great Wall chinext 50 etf is also maintaining its momentum, with an increase in shares of 162% this year. The three chinext 50 etfs have all exceeded a growth rate of 26% this year.

Industry insiders sighed that looking back at the history of the chinext 50 etf, the first product was Huasan's chinext 50 etf, established in 2017. At that time, the narrative of the A-shares was "blue chips," and this fund was also referred to as "creation blue chips."

However, the Huasan chinext 50 etf faced trade friction in its second year after listing, resulting in a continuous correction in A-shares. At that time, the etf had not yet reached the wave of development, but this product already demonstrated the tool attribute of "buying more as it falls," and its scale growth became a phenomenal product at that time, becoming Huasan's flagship product.

Currently, with top companies like Huaxia and Yifangda entering the market, this will bring pressure to old products. However, based on the current situation, etfs have not entered the stage of winner-takes-all; other companies still have opportunities, especially Huasan, which has clear first-mover advantages. The pattern of the chinext 50 etf awaits the test of time.

Large companies are busy improving their layout.

The vigorous issuance and operating battles of the A500 have vividly taught the entire public fund industry that “whoever controls the ETF controls the world,” making it more tangible. In the context of the issuance of new indices and optimization of old indices, large companies strive to seize every index opportunity.

In addition to the fullgoal chinext a50 etf, also approved on November 29 were the applications for the 180etf submitted by six fund management companies including Huatai-Pb, Southern Fund, Penghua Fund, Ping An Fund, Tianhong Fund, and Industrial Bank Fund, which will lead to a significant expansion of the 180etf. On the same day, Yifa company started the issuance of the 180etf. Previously, the Yinhua 180etf had also been approved.

For fund companies, obtaining approval is the first step, and the issuance is already in the queue. Contacting brokerages, confirming settlements, and planning for future linkage fund issuance at banks are all competitive details.

According to Dan Kuan, China Asset Management has established a relatively comprehensive layout in the gem with broad-based, industry-specific, and strategy indices. First, in the broad-based indices, there are currently the chinext price index, chinext 200, and chinext composite index, with further improvements planned for the broad-based index product line depending on conditions. Second, for industry-specific indices, they are researching and exploring more unique industry thematic indices on the gem that reflect sector characteristics. Third, for strategy indices, the company has laid out chinext momentum growth and chinext value strategies, with ETF scales at 4.8 billion and 0.55 billion respectively, making chinext momentum growth ETF the largest growth strategy ETF in the all market.

Jin Zeyu, fund manager of the quantitative investment department at Fullgoal Fund, also stated that the company already has several products including fullgoal chinext composite etf, dual innovation 50ETF, fullgoal chinext enhanced ETF, and fullgoal chinext 200ETF, with a total fund share exceeding 6 billion as of November 11. Under the current context, the economy shows a certain stabilization trend, investor sentiment has somewhat recovered, and the relevant symbols of the gem can better reflect optimistic investor sentiments, with attention expected to increase compared to before.

"Currently, Yifa company has laid out a series of gem index products covering the chinext price index, chinext middle cap 200, chinext momentum growth, etc., and this time also fills the gap of the chinext 50 index," said Pang Yaping, general manager of the index research department of Yifa Fund.

Guotai Fund, which leads in the scale of the CSI A500 ETF, has also been approved for the chinext 50ETF this time. The company stated that its ETF product variety is already relatively rich, and in recent years, broad-based products have attracted much attention from investors, hoping to further expand and supplement the product line to meet investors' segmented demand for gem broad-based ETFs, based on products like CSI A500ETF and chinext LOF.