24 public funds were launched on the same day, and the market may welcome 20 billion yuan of incremental funds

Source of this article: Times Finance Author: Jin Zixin

On the first trading day of the Year of the Dragon, A-shares took over from Hong Kong stocks to welcome a "good start" in the Year of the Dragon, and the Shanghai Composite Index once again stood above 2,900 points.

As of the close of trading on February 19, the Shanghai Composite Index continued its previous rally to close up 1.56%, happy to mention the "Four Consecutive Yangs" to close at 2,910.54 points, the Shenzhen Component Index rose 0.93% to close at 8,902.33 points, and the ChiNext Index rose 1.13% to close at 1,746.42 points. In terms of sectors, the concept of multimodal AI was boosted by Sora's sentiment, and many stocks rose to the limit, and optical modules, computing power, virtual humans and other directions joined hands to detonate the market. In terms of industries, education, media, Internet, communication equipment, coal, and oil performed strongly.

Complementing the booming market on the first day of the year, on February 19, the first batch of CSI A50 ETFs tracking the CSI A50 Index from ten public funds were issued simultaneously.

According to the fund contract, the initial issuance of 10 CSI A50 ETFs will raise an upper limit of 2 billion yuan. This also means that up to 20 billion yuan of incremental funds may already be on the way.

Compared with the Year of the Rabbit, the new issuance of public funds at the beginning of the Year of the Dragon has greatly increased. Including the above-mentioned 10 CSI A50 ETFs, a total of 24 public funds were issued together on February 19. Some people in the industry believe that the fund issuance boom may be to catch up with the rhythm of this round of market rebound.

Image source: Picture Worm Creative

A-share New Year's "dragon raises its head"

On February 19, A-shares ushered in the first trading day of the Year of the Dragon and "the dragon raised its head" as desired, and the market was hot. As of the close of the day, more than 4,200 stocks in the whole market rose, and more than 270 stocks rose to the limit.

On the same day, the most beautiful "cub" on the disk must be the concept of AI, and the related industrial chain computing power, optical modules, multi-modal models and other sectors set off a "rising tide", and the launch of OpenAI's new Wensheng video model Sora drove many shares of the above sectors to rise, and the heat detonated the market, and related education, media, communications and other stocks also rose simultaneously.

With the release of large models such as Sora and Gemini 1.5 Pro, the multimodal capability has been significantly enhanced, and the application scenarios have been further broadened, which will drive investment in computing infrastructure, and it is recommended to pay attention to optical modules, ICT infrastructure and other sectors.

Shenwan Hongyuan's research pointed out the impact of technology iteration on the AI media creative industry, for short video UGC platforms, with the help of AI upgrade editing tools to drive the further development of the creator economy, but also need to pay attention to whether there will be changes in the competitive landscape; in terms of content, in-depth content may benefit, IP value will increase, and competition will intensify for shallow low-threshold content; For creative tools, the factors to deal with competition are B-end customer stickiness and copyright library accumulation. In addition, AI fraud may affect news production and dissemination, and identifying AI videos will be a key part of content moderation.

Shenwan Hongyuan suggested focusing on the optical communication industry chain, computing equipment industry chain, multi-modal algorithm layout, in-depth content creation with rich IP reserves, and Meitu for commercial AI application scenarios.

In addition to the frequent swiping of AIGC, it is also worth noting that the hot dividend style has continued to rise this year, and the coal, oil, power and other sectors are still rising, and many stocks have hit record highs.

Among them, CNOOC (600938. SH) broke through a record high on February 19 and closed up 7.70% at 24.61 yuan per share. In addition, Shaanxi Coal Industry (601225. SH), Huaneng Hydropower (600025. SH) and many other stocks also refreshed their highest stock prices, and China Shenhua (601088.SH), which was heavily held by many funds, surged 4.57%, hitting a new high since 2008.

20 billion incremental funds are ready to be launched

On the first trading day of the Year of the Dragon, market sentiment was high, and the public fund industry was also poised to take off, and the "hard core" of new fund issuance picked up.

On February 19, the first batch of CSI A50 ETFs in China were collectively put on the shelves, and this batch of products is also one of the protagonists of the "Spring Festival File" issued by the Year of the Dragon Fund. The 10 A50 ETFs were all approved on February 2, and the subscription deadline is March 1. According to the fund contract of the above-mentioned ETFs, the 10 A50 ETFs are all capped at 2 billion yuan, and this batch of ETF products alone may bring 20 billion yuan of incremental funds to the market.

The 10 approved fund managers are E Fund, Huatai Pinebridge Fund, JPMorgan Asset Management, Wells Fargo Fund, Harvest Fund, Dacheng Fund, Huabao Fund, Yinhua Fund, ICBC Credit Suisse Fund and Ping An Fund. The management fee and custody fee of this batch of CSI A50 ETFs are set at 0.15% and 0.05% respectively.

In this regard, a fund practitioner told Times Finance that the fee rate of broad-based ETFs will continue to fall in the future, moving closer to the direction of low fees for passive investment in overseas mature markets.

China Securities Index Company, which issued the CSI A50 Index, said that the index released on January 2, 2024 is to more comprehensively reflect the long-term operation trend of the securities of the most representative leading listed companies in various industries, and continue to guide medium and long-term funds to enter the market.

China Securities Index pointed out that while maintaining the attribute of "large market capitalization", the CSI A50 Index includes more leading companies in the new economy field, and introduces ESG sustainable investment concepts, interconnection screening and other elements to facilitate the allocation of A-share core assets by domestic and foreign medium and long-term funds, and the characteristics of high dividends are also more in line with the investment style of medium and long-term funds.

Compared with the CSI 300 and SSE 50, which are also broad-based indices, the CSI A50 Index has reduced its weight in banking, food and beverage and other industries, and increased the proportion of power equipment, new energy and medicine, while compared with the MSCI A50, it mainly reduces the weight of banks and increases the proportion of pharmaceuticals and non-bank finance, and the CSI A50 Index has achieved cross-market coverage.

On the same day, the first batch of CSI A50 ETFs were "new" to 14 public funds, including 4 passive index funds, 1 passive index bond fund, 2 partial equity hybrid funds, 1 partial debt hybrid FOF fund, 5 medium and long-term pure bond funds, and 1 QDII index fund.

Looking back at the first trading day of the Year of the Rabbit (30 January 2023), a total of 5 fund products were launched at the same time, and the number of new products on the first trading day of the Year of the Dragon reached 24. Among the 5 new fund products on the first trading day of the Year of the Rabbit, 2 of them are QDII products, and among the 24 new products in the Year of the Dragon, passive index products are the most, as many as 14 (excluding QDII), and the only newly issued QDII index fund is Harvest Germany DAX ETF, which tracks the blue chip index of the German stock market - DAX index, and the main constituents are mostly large-cap blue chips, covering automobile manufacturing, machinery, chemicals and pharmaceuticals and other industries.

The above-mentioned fund practitioners told Times Finance, "The new products in the new year are closely related to the product trends of the year, and 2023 is undoubtedly the year of great development of ETFs, and I think this trend will continue this year." ”