Historic transformation
The A-share market is witnessing a historic moment that occurs only once every decade!
At 10:14 AM on October 28, 2025, the SSE Composite Index broke through the 4,000-point mark during intraday trading for the first time since the intraday high on August 18, 2015, marking the return of A-shares to the 4,000-point threshold.
In the history of A-shares, the index surpassed the 4,000-point level only in 2007 and 2015. Both times were followed by major bull markets, peaking at 6,124 points and 5,178 points respectively. This time, the 4,000-point milestone is being called the 'lowest valuation' in history.
At 15:00 on October 29, 2025, the SSE Composite Index closed at 4,016.33 points, marking the first time A-shares closed above the 4,000-point level since July 24, 2015.
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A-shares are experiencing a once-in-a-decade moment.
Compared with the previous two rallies, this 4,000-point rally has three key differences:
① The current rally is a structural bull market driven by 'hard-core technology.'
From the low of 2,748.92 points on September 23, 2024, to the current 4,000-point level, the electronic industry contributed the most to the 1,251-point increase, accounting for an impressive 34.9%, while banking, non-ferrous metals, power equipment, and biomedicine collectively contributed 24.7%.
This means that these five major industries have accounted for half of the A-share market's gains over the past year, highlighting the critical importance of selecting the right sectors.
(The content of this article consists solely of objective data and information and does not constitute any investment advice.)
The technology sector remains an unshakable main theme in the ETF market. As of October 29, the 'AI computing foundation' 5G Communications ETF has surged 165% cumulatively since 'September 23.' Similarly, AIETF, Chip ETF, Sci-Tech Innovation 50 ETF, FinTech ETF Huaxia, and Sci-Tech 50 ETF have all achieved gains exceeding 100%.
In 2007, the market rally was driven by high economic growth, often referred to as the 'coal and nonferrous metals boom.' In 2015, it was a 'leveraged bull market,' whereas the current rally is a structurally driven 'hard tech bull market.'
② The ecological structure of the A-share market has undergone a historic transformation.
Since the third quarter of last year, passively managed funds holding A-shares surpassed actively managed funds for the first time. Passive investing has gradually become the market mainstream, with ETFs now representing a market size exceeding RMB 5 trillion, making them one of the primary tools for investors to position themselves in the A-share market.
Since 'September 23' last year, more than RMB 1.1 trillion in funds have flowed into the market through ETFs, with 'high-tech content' ETFs attracting even more capital as they rise.
Among them, the Robo ETF saw a strong net inflow of RMB 18.988 billion during the period, while the AI ETF, STAR Tech Semiconductor ETF, and STAR Tech AI ETF (Huaxia) recorded net inflows of RMB 3.592 billion, RMB 3.029 billion, and RMB 1.732 billion, respectively.
③ This is widely recognized as the 'lowest valuation at the 4,000-point level in history.'
As of October 29, the PE (TTM) and PB stood at 16.96x and 1.54x, respectively, lower than the other two instances.
Given that historically, 95.9% of the time, the A-share market has remained below the 4,000-point level, the current position can be described as entering an 'uncharted territory,' accompanied by diverse market sentiments such as 'technology valuation bubble theory,' 'rising index but no profits,' and 'a bull market with no ceiling.'
Coinciding with the release of China’s critical blueprint for economic transformation—the 15th Five-Year Plan—its key themes have swiftly become hot topics of discussion in the market.
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Core Directions of the 15th Five-Year Plan
Quick Overview of Relevant ETFs!
Historically, five-year plans have always been central pillars of national strategy. Since the implementation of the first five-year plan in 1953, they have consistently served as the core framework for national strategy, playing a pivotal role in shaping economic objectives.
From the 13th Five-Year Plan to the 15th Five-Year Plan, the core economic drivers have undergone a fundamental transformation, shifting entirely from reliance on factor inputs to innovation-driven and domestic demand-led growth. Notably, the emphasis on 'self-reliance and strength in science and technology' has risen dramatically, evolving from one of several options in the 13th Five-Year Plan to the top priority in the 15th Five-Year Plan.
In terms of industries, the draft Proposal for the 15th Five-Year Plan mentions: new energy, new materials, aerospace, low-altitude economy, quantum technology, biomanufacturing, hydrogen energy and nuclear fusion, brain-computer interfaces, embodied intelligence, and sixth-generation mobile communications.
It is worth noting that the phrase 'adopt extraordinary measures' was used in the context of tackling key core technologies. The market is closely watching for subsequent policies.
Through extraordinary measures across the entire chain, decisive breakthroughs will be achieved in core technology research for key areas such as integrated circuits, industrial mother machines, advanced instruments, basic software, advanced materials, and biomanufacturing.
In recent years, China’s securities market has made significant contributions to the development of the real economy. In particular, the rapid growth of the ETF market has positively impacted industry development through relevant ETF issuances.
Below are the directions highlighted in the 15th Five-Year Plan, along with some ETF collections currently available in the market:
① Semiconductor chips
The chip ETF (159995) is the largest chip-themed ETF in the entire market, with the latest scale reaching RMB 29.326 billion. The index covers the entire chip industry chain, including design, manufacturing, packaging and testing, and equipment. Its major holdings include industry leaders such as SMIC, Cambricon, JCET, and NAURA Technology.
The Semiconductor Materials ETF (562590) and the STAR Semiconductor ETF (588170) focus on two critical bottlenecks in domestic semiconductor substitution—equipment and materials. The combined weight of these components reaches 87% for the former, ranking first in the market, while for the latter it is 77%. With a price fluctuation limit of 20%, the latter offers greater volatility and potential upside.
②Computing Power
The 5G Communications ETF (515050) is one of the representative products of the core computing power layer in AI. The index covers four core components of the AI computing power system—30% optical modules, 12% PCBs, 15% leading server providers, and 12% high-speed copper connections. Key holdings include the two optical module giants, Xinyi Sheng and Zhongji Xuchuang, as well as industry leaders in the 5G supply chain such as Foxconn Industrial Internet.
The ChiNext AI ETF Huaxia (159381) has the highest 'optical content,' with a 'CPO content' exceeding 50%. Its key holdings include the three major players from Yizhongtian and Runze Technology. Additionally, this ETF’s total expense ratio is 0.2% per year, placing it among the lowest-cost options in the market.
③Aerospace Powerhouse
The Aerospace and Defense ETF (159227) is the military-themed ETF with the highest 'aerospace content.' The combined weight of 'aviation equipment + aerospace equipment' exceeds 68%, with both large aircraft and low-altitude economy content surpassing 50%. It involves popular themes such as the low-altitude economy, satellite internet, and commercial spaceflight.
The General Aviation ETF Fund (159230) is highly focused on the low-altitude economy, with 51% of its portfolio dedicated to this sector. Key holdings include Wanfeng Auto Wheel (R&D of general aviation aircraft), Hongdu Aviation (general aviation trainer aircraft and civilian drones), Space Rainbow (drone R&D), and Zhi Zhong Shares (helicopter R&D).
④Wind and Solar Energy
The Photovoltaic ETF Huaxia (515373) tracks the CSI Photovoltaic Index, with over 70% of its composition being 'new energy content,' ranking first in the entire market. This ETF was available for subscription from October 27 to November 7.
The New Energy ETF Fund (516850) provides comprehensive coverage across all segments of the new energy industrial chain, including photovoltaics (LONGi Green Energy), wind power (Goldwind Technology), nuclear power (China National Nuclear Corporation), and lithium batteries (CATL). It also relates to anti-internal competition concepts.
⑤Solid-State Battery
The New Energy Vehicle ETF (515030), which tracks the CSI New Energy Index, has a "solid-state battery" content of up to 50.9%. The latest size of the product is RMB 5.589 billion, ranking first in its category.
The ChiNext New Energy ETF Huaxia (159368), which tracks the ChiNext New Energy Index, covers sub-sectors such as energy storage (with an energy storage content of 57.61%), solid-state batteries (content 33.17%), and photovoltaic equipment (including Jiejia Weichuang). Additionally, the ETF has a price fluctuation limit of 20%, with a fee rate of 0.2%, placing it among the lowest-cost options in the entire market and making it the most cost-effective choice within its peer group.
⑥ High-End Manufacturing
The High-End Equipment ETF (516320), which tracks the CSI Equipment Industry Index, covers core areas including new energy equipment, industrial robots, and aerospace. It overlaps with the Wind High-End Equipment Manufacturing theme by 64%.
The New Materials 50 ETF (516710) is driven by dual engines of domestic substitution and technological iteration, offering one-stop exposure to semiconductor materials, new energy materials, and foundational materials for high-end manufacturing. Its "new materials" content reaches 80%, the highest in the entire market, while its "hydrogen energy" content stands at 14%.
The Machine Tool ETF (159663) serves as a key vehicle for domestic substitution in the machine tool industry, with a "machine tool" content of 21%, the highest in the entire market, and a "sixth-generation mobile communication" content of 18%.
⑦ Humanoid Robots
As a significant implementation direction of embodied intelligence, the largest robot ETF (562500) in the entire market boasts a "embodied intelligence" content of up to 61%. This ETF has seen net inflows exceeding RMB 18 billion year-to-date, making it the most favored robot-themed ETF in terms of capital allocation.
⑧ Brain-Computer Interface
The Medical Device ETF (562600) focuses on the medical device sector, covering medical equipment, in vitro diagnostics, and high-value consumables. Its "brain-computer interface" content stands at 22%, leading the entire market.
⑨Hydrogen Energy and Nuclear Fusion
Grid Equipment ETF (159326), the only ETF in the entire market that tracks the CSI Grid Equipment Theme Index, has a 'nuclear fusion' component weighting of up to 15.3%, ranking first in the market. The weight of ultra-high voltage (UHV) is as high as 63.35%, the highest in the market; the virtual power plant component reaches 42.57%, the highest among similar indices.
Utilities ETF (159301), driven by both defensive attributes and new energy transition, has a weighting of over 97% in the electricity and heating sectors. Enterprises such as Sino Biopharm are heavily investing in advanced nuclear power technologies. The ETF’s tracked index contains an 11% 'nuclear fusion' component.
⑩Quantum Technology
By 2025, the global quantum technology industry will exhibit significant characteristics of accelerated technological breakthroughs, intensified policy support, and commercial applications coming to fruition. Even Jensen Huang publicly acknowledged previous forecasting errors, stating that quantum computing has reached an 'inflection point.' Google achieved verifiable quantum advantage algorithms on its Willow chip. The upcoming 15th Five-Year Plan lists quantum technology as a new economic growth driver.
Data ETF (516000), which adopts a full industrial chain layout for computing power and data elements, contains a 'quantum technology' component of 22%. The Xinchuang ETF (562570) contains a 'quantum technology' component of 13.43%.
⑪Biological Manufacturing
The Hang Seng Medical ETF (159892), the largest ETF tracking the same target, covers 30 of the largest biotech companies in the Hong Kong stock market, including A-share scarce stocks such as Innovent Bio, KangFang Bio, Wuxi Bio, 3SBio, and Sino Biopharm, representing the cutting-edge force of China's innovative drug internationalization. It supports T+0 trading.
Biotech ETF (516500), focusing on leading enterprises across the A-share biotech industrial chain, has a 'biotechnology' concentration of 62%, benefiting from the '15th Five-Year Plan' goal of 'enhancing the resilience of the biopharmaceutical industrial chain.'
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Conclusion
Ten years later, the A-share market has historically broken through the 4,000-point mark for the third time. This is being called 'the lowest valuation 4,000 points in history,' but what sets it apart from the previous two occasions is that we are now facing an unprecedented era of ultra-low interest rates coupled with the AI technology wave!
Overnight, NVIDIA, which had just become the world's first company to reach a market capitalization of 4 trillion US dollars, broke another historical record by becoming the first company in human history to surpass a market value of 5 trillion US dollars.
Ten years ago, NVIDIA’s market capitalization was only 14.92 billion US dollars. Over the past decade, NVIDIA’s stock price has surged 336.2 times, with an annualized return rate as high as 78.97%.
China's artificial intelligence development wave is also in full swing, from the groundbreaking emergence of DeepSeekR1, known for its unparalleled cost-performance ratio, to Alibaba's ambitious AI goals unveiled at the Yunqi Conference, and the emphatic statement in the 15th Five-Year Plan: [The next decade will see the creation of another high-tech industry in China].
As the red line of the SSE Composite Index once again touches the 4,000-point mark, this is not just a simple numerical leap, but rather reflects the transformation of economic restructuring and the improvement of the capital market system, underpinned by self-reliance and strength in technological innovation.
Are you ready for the next five years?
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Risk Warning: The above content reflects the current market situation, which may change in the future, and does not constitute any investment opinion or advice. Past performance of the index does not guarantee its future performance, nor does it constitute a guarantee of any investment returns from the fund. The index has a relatively short operational history and cannot reflect all stages of market development. Index funds are subject to tracking errors, and past performance of the fund does not indicate future results. Please read the "Fund Contract," "Prospectus," and other legal documents before purchasing any fund products, and choose products that are suitable for your own risk tolerance and investment objectives. The market carries risks, and investment requires caution.
