① The Shanghai Composite Index surpassed 3,800 points, and industry insiders have proclaimed a "full bull market has begun"; ② Capital is flooding into ETFs aggressively, with the number of ETFs surpassing 100 billion yuan expected to exceed 100; ③ Is incremental capital to be expected? Institutional views are filled with an optimistic atmosphere.
According to a report by Caixin on August 22 (Reporter Yan Jun), "The music continues and the dance goes on." The A-share market continues to rise significantly, with the Shanghai Composite Index surpassing 3,800 points in the afternoon of August 22. The last time it reached 3,800 points was August 20, 2015, leading many investors to joyfully sing "Ten Years".
"Cold King" hit the daily limit of 20%, with a market capitalization exceeding 52 billion; the Sci-Tech Innovation Board 50 Index was the strongest performer, rising over 8% to reach a three-year high. The ETFs tracking this index, along with premiums, nearly hit the daily limit. The total transaction volume in the Shanghai and Shenzhen markets reached 2.55 trillion yuan, breaking the 2 trillion yuan mark for eight consecutive trading days.
Industry insiders have indicated that since the "September 24" market rally last year, market sentiment has completely reversed. By February, DeepSeek initiated a technology bull market, followed by innovations in pharmaceuticals, with sector rotation occurring. However, the market has consistently exhibited a profit-making effect. As the Shanghai Composite Index continues to stay above 3,700 and 3,800 points, industry insiders have declared: a full bull market has begun.
The sustainability of the bull market remains to be observed. Savvy capital has already rushed into sector-themed ETFs, signaling a significant year for industry-themed strategy ETFs.
Statistics from Caixin show that as of August 21, the domestic ETF market had reached a scale of 4.85 trillion yuan, with the number of ETFs surpassing 100 billion yuan reaching 99. Amidst the market surge, ETFs are expected to rise as well; it is likely that after the scale update on the 22nd, the number of ETFs exceeding 100 billion yuan will break the 100 mark.
This year, the largest increase in the number of ETFs exceeding 100 billion yuan has been seen in bond ETFs and sector-themed ETFs. Although their growth logic differs, both have collectively propelled the scale of China's ETFs to surpass that of Japan, establishing it as the largest ETF market in the Asia-Pacific region.
The number of ETFs exceeding 100 billion yuan has reached 99, with bond ETFs totaling 25.
The improvement in market chip structure, coupled with the accumulation of profit effects and capital inflows, has created a positive feedback loop. Both individual and institutional investors have generally experienced net capital inflows, with the trading volume of A-shares exceeding 2 trillion yuan for eight consecutive trading days, indicating high trading activity. Recent financing balances have increased rapidly, with a single-day increase exceeding 30 billion yuan at one point, and cumulative net inflows since the end of June have surpassed 300 billion yuan. The liquidity of funds remains robust, and in this wave of capital influx, the growth of ETF sizes has been particularly pronounced.
As of August 21, both the Huabao Financial Technology ETF and the Haifutong Shanghai Stock Exchange Convertible Bond ETF have surpassed 10 billion yuan, bringing the total number of ETFs in the market exceeding 10 billion yuan to 99.
In terms of the growth categories of ETFs exceeding 10 billion yuan, bond ETFs are undoubtedly the largest incremental category this year. Currently, the total scale of 39 bond ETFs in the market exceeds 540 billion yuan, with a net inflow of 310.66 billion yuan year-to-date, making it the ETF category with the most significant scale increase.
Benefiting from the rise in the equity market, convertible bonds have also experienced significant growth in scale. Following the Bosera Convertible Bond ETF surpassing 50 billion yuan in scale, on August 21, the Haifutong Shanghai Stock Exchange Convertible Bond ETF officially exceeded 10 billion yuan, marking its entry into the '10 billion camp' of market ETFs. Notably, since August, this ETF has seen significant net capital inflows, with its scale increasing by more than 2.4 billion yuan, reaching a latest scale of 10.119 billion yuan.
In terms of the proportion of ETFs exceeding 10 billion yuan, bond ETFs also lead by a wide margin. Among the 39 bond ETFs, 25 exceed 10 billion yuan, accounting for as much as 60%.
In the current low-interest-rate environment, there is a migration from active bond products to passive bond products. With policy support, benchmark market-making credit bond ETFs and technology innovation bond ETFs have been successively launched, rapidly increasing in scale. Multiple products have reached scales of 10 billion or even 20 billion yuan. Additionally, both the Haifutong Short-term Bond ETF and the Bosera Convertible Bond ETF have crossed the 50 billion yuan mark, with the latest scales at 57.343 billion yuan and 53.091 billion yuan respectively; the Fuguo Government Finance Bond ETF once exceeded 50 billion yuan but has slightly retreated to 46.957 billion yuan.
Moreover, bond ETFs with scales exceeding 20 billion yuan include the Haifutong Urban Investment Bond ETF, the E Fund Corporate Bond ETF, the Ping An Corporate Bond ETF, the Pengyang 30-Year Treasury Bond ETF, the Southern Shanghai Stock Exchange Corporate Bond ETF, and the Huaxia Credit Bond ETF, among others.
There are currently 22 industry theme strategy ETFs.
Another winner in the realm of hundred billion ETFs is the sector-themed ETF, as the bull market leads to rapid sector rotation, marking a prosperous year for sector-themed strategy ETFs.
With the Huabao Financial Technology ETF surpassing 10 billion yuan, the number of sector-themed strategy ETFs exceeding 10 billion yuan has reached 22. This year, thematic ETFs such as those focusing on brokerage and financial technology have gained favor from investors; for example, the Huabao Financial Technology ETF's scale has doubled from 4.67 billion yuan at the beginning of the year to its current size. Meanwhile, the Guotai Junan Securities ETF has reached a latest scale of 39.667 billion yuan, soon to breach the 40 billion yuan mark.
Looking at thematic ETFs, the latest scale of the Harvest Sci-Tech Chip ETF has reached 31.271 billion yuan, making it the only product among thematic ETFs to exceed 30 billion yuan. The Huabao Medical ETF and the Huaxia Chip ETF both exceed 20 billion yuan. Additionally, 13 ETFs, including the E Fund Artificial Intelligence ETF, Huaxia Robotics ETF, Penghua Wine ETF, and Guotai Junan Military Industry ETF, have scales exceeding 10 billion yuan.
Furthermore, regarding industry ETFs, benefiting from the uplift in the brokerage sector, the Guotai Junan Securities ETF is about to surpass 40 billion yuan, while the Huabao Brokerage ETF and the Guolian An Semiconductor ETF have scales exceeding 20 billion yuan.
In addition, among strategy ETFs, there are also three funds exceeding 10 billion yuan. The Huatai-PB Dividend Low Volatility ETF has reached a latest scale of 21.019 billion yuan, followed closely by another dividend ETF under the same company, with a scale of 18.238 billion yuan; the Southern Dividend Low Volatility 50 ETF also exceeds 10 billion yuan.
It is noteworthy that the scale of cross-border ETFs has also shown significant growth, with the latest count of hundred billion cross-border ETFs reaching 20. The Invesco Hong Kong Stock Connect Internet ETF has a latest scale of 70.891 billion yuan, while the Huaxia Hang Seng Technology ETF, E Fund Chinese Concept Internet ETF, and Huatai-PB Hang Seng Technology ETF all exceed 30 billion yuan.
However, the flow of funds into ETFs has shown divergence, with ongoing outflows from broad-based ETFs. Some investors jokingly remarked that the funds flowing out of broad-based ETFs are sufficient to support the funding needs of a bull market on the Sci-Tech Innovation Board.
After surpassing 3,800 points, can we expect an influx of new capital?
Can we still get in? This is the existential question posed by investors regarding the Shanghai Composite Index at 3,800 points. Currently, institutions are optimistic about the future inflow of capital into A-shares.
Multiple brokerage reports indicate that the relocation of household deposits is just beginning, and in the future, there will be a further shift towards fixed income "+" products and other rights-bearing products. This view is also supported by public fund companies.
The Invesco Great Wall Investment Research Team believes that the positive trend in the stock market continues to attract larger volumes of capital inflow. Looking ahead, it is necessary to pay attention to volatility risks, but it is expected that positive changes in liquidity may still support the market. Driven by sentiment and capital, A-shares have entered a primary upward trend, with trading volume significantly increasing, indicating the entry of new capital. Given the current market sentiment is somewhat overheated, with the daily turnover rate rising above 6%, attention must be paid to volatility caused by profit-taking.
The aforementioned team pointed out that fundamental improvements are also expected to appear in the next 1-2 quarters. Moreover, considering the positive changes in technology narratives since the beginning of the year, coupled with high growth in household savings and an "asset scarcity" environment, there is a strong demand for allocation to high-return assets, and we maintain a relatively optimistic view on the market.
"Although the Shanghai Composite Index continues to reach new highs for the year, overall, market sentiment is generally optimistic. This positive atmosphere is likely to foster more investment opportunities in industries that remain undervalued," stated the Guangfa Fund advisory team.
Some fund companies are firmly optimistic about domestic semiconductors. On the news front, the surge in semiconductors can be attributed to a public announcement from DeepSeek, which mentioned that DeepSeek-V3.1 uses the parameter precision of UE8M0 FP8 Scale and noted in a pinned comment that UE8M0 FP8 is designed for the upcoming next-generation domestic chips. Deng Xinyi, Deputy General Manager of the Equity Division at Nuoan Fund, stated that the semiconductor sector has recently seen continued accumulation by major funds, with a clear acceleration trend in the domestic semiconductor supply chain, and the localization process is imminent. Currently, the cost-effectiveness of low-level positions is significant, and we are firmly optimistic about the future of Chinese technology.
Tian Ximeng, manager of the Internet ETF under the Financial Fund's Hong Kong Stock Connect, stated that as the domestic chip supply chain may achieve technological breakthroughs, domestic chips are expected to resolve the computing power bottleneck for large-scale domestic models. It is anticipated that in the second half of the year, domestic large models will achieve breakthroughs in parameter quantities, with the intelligence level of pre-trained large models continuing to improve, thus making downstream applications more intelligent and driving growth in AI-related revenues. The second half of the year will focus on the development of domestic AI large models and related applications, with potential beneficiaries including stocks in the Hong Kong Stock Connect internet sector. Currently, overseas AI revenues are accelerating, mainly in cloud computing, advertising, and vertical applications. Domestic comparable companies include Alibaba, Tencent, and Kuaishou, all of which are components of the Hong Kong Stock Connect internet sector.
