Investment tips for this issue:

The Shanghai Stock Exchange ETF (fund code: 510760) was established on August 21, 2020. The fund managers are Liang Xing and Wu Zhonghao. The fund closely tracks the Shanghai Composite Index (index code: 000001.SH) to minimize tracking deviations and tracking errors. On May 10, 2024, the rate was reduced to 0.15% fund management rate and 0.05% escrow rate.

SSE Composite Index (SSE Composite Index, index code: 000001.SH, index abbreviation: SSE Composite Index) reflects the overall performance of companies listed on the Shanghai Stock Exchange. It has a long history and wide influence. It is a classic broad-based index weighted by total market value.

The share of central state-owned enterprises in the Shanghai Composite Index reached 62.79%, and the share of the Chinese leading central enterprises in the Shanghai Composite Index was higher than that of the Shanghai and Shenzhen 300 equal-broad base index during the same period; the cumulative revenue of the Shanghai Composite Index since 2021 led the Shanghai and Shenzhen 300 Index by 20.7 percentage points. In the context of the nine new countries, it will benefit more significantly from the expectations of continued growth in the performance of central Chinese enterprises, and is expected to continue to lead the Shanghai and Shenzhen 300.

The weak market highlights its resistance to falling: Judging from the annual yield, the Shanghai Composite Index performed well in 2018, 2021, 2022, and 2023. The yield for that year was ahead of the Shanghai and Shenzhen 300. Among them, excess earnings in 2021 (Shanghai and Shenzhen 300) reached 10%, highlighting its resistance to falling in weak markets.

The valuation can be expected to rise, and the long-term allocation value is high: as of May 10, 2024, the price-earnings ratio of the Shanghai Composite Index was 13.82 times, and the net price-earnings ratio was 1.26 times, which is close to the valuation level of the Shanghai and Shenzhen 300 (PE-12.21, PB-1.26). In 2025 and 2026, the net profit of the Shanghai Composite Index will grow 9.41% and 7.86% year-on-year, and the valuation level is expected to have some room to rise.

In the past three years, the net value of the fund has surpassed the benchmark by 18 percentage points: since listing on September 9, 2020, the net unit value increased by 12.26% as of May 10, 2024, the Shanghai Composite Index fell 3.08% during the same period, and the cumulative excess income was 15.34%. Looking at the market stage, the ETF bucked the trend and rose 9.84%, compared to the Shanghai Composite Index.

Risk warning: The research and analysis of fund products and indices in this report is based on historical public information, which may cause certain analytical biases due to changes in index sample stocks; in addition, the historical performance and performance of fund managers does not represent the future; future performance of the index is affected by multiple factors such as the macro environment, market fluctuations, and style changes, and there is a certain risk of fluctuation.