【Editor's note】The tide of science and technology is surging, consumption quality is being upgraded, and industrial transformation is surging...... China is forging ahead on the path of high-quality development. Investment is a long-distance race, keep up with the index, and grasp the "beta" of the times. The "Index Quick Look" column provides in-depth analysis of the characteristics of different indices to help investors explore new investment opportunities.
According to the latest data from the Ministry of Industry and Information Technology, the production index of small and medium-sized enterprises in May was 50.3%, an increase of 0.6 percentage points from the previous month, entering the boom range. The production and operation of small and medium-sized enterprises in mainland China continued to rebound steadily, and the development of small and medium-sized enterprises was resilient enough, showing a long-term upward trend.
In a period of accelerated economic recovery and abundant liquidity, SMEs tend to be more likely to achieve performance growth and valuation improvements. Since the beginning of this year, the attention of the four small- and medium-cap style indices of CSI 500 Index, CSI 1000 Index, Science and Technology Innovation 100 Index, and ChiNext Mid-Cap 200 Index has continued to increase.
So, what are the characteristics of the same small and mid-cap style index? What's the difference?
How index positioning differs
The CSI 500 Index and the CSI 1000 Index are both scale indices that span the Shanghai and Shenzhen stock exchanges.
Among them, the CSI 500 Index is biased towards the mid-cap style, which is composed of the top 500 stocks in terms of total market capitalization after excluding the constituent stocks of the CSI 300 Index and the top 300 stocks in total market capitalization from all A-shares.
The CSI 1000 Index is positioned in a small-cap style, consisting of 1,000 stocks with small scale and good liquidity outside the sample of the CSI 800 Index, with a high content of "specialization, refinement, and innovation".
The other two indices are indices that focus on small- and mid-cap stocks in a single market.
Among them, the STAR 100 Index is composed of 100 stocks with medium market capitalization and good liquidity in the STAR Market; The ChiNext MidCap 200 Index is composed of 200 stocks with medium market capitalization and good liquidity on the ChiNext Board.
The difference in positioning also brings about differences in the market capitalization characteristics, industry distribution, constituent stocks, and growth potential of the four indexes.
The characteristics of market capitalization are taken together
First of all, from the perspective of market capitalization, they are all small- and mid-cap style indices, among which index constituents have the smallest average market capitalization?
As can be seen from the figure below, the weight of the constituent stocks of the ChiNext Mid-Cap 200 Index is less than 10 billion yuan, and the weight between 10 billion and 20 billion yuan is nearly 40%, and the average market value of the index constituent stocks is less than 9 billion yuan, which is the smallest among the four indexes.
Slightly larger than the average market capitalization of the ChiNext Midcap 200 Index is the CSI 1000 Index. The CSI 1000 Index comprehensively reflects the overall performance of a group of small-capitalization companies in A-shares, with an average market capitalization of 10.3 billion yuan, with a market value of less than 10 billion yuan and 46% of the constituent stocks between 10 billion and 20 billion yuan.
The second is the Science and Technology Innovation 100 Index, whose constituent stocks have an average market value of 13 billion yuan, and the constituent shares with a market value of less than 10 billion yuan weigh about 21%, less than half of the CSI 1000 Index; The equity weight of the constituents with a market value of between 10 billion and 20 billion yuan reached 65%, accounting for the highest proportion among the four indexes.
The CSI 500 Index has the largest average market capitalization, corresponding to the index positioning, the CSI 500 Index presents a mid-cap style, with an average market capitalization of 23.2 billion yuan, and the weight of constituent stocks with a market value of more than 20 billion yuan is as high as 70%, which is significantly higher than the other three indexes.
To put it simply, if these four indices are ranked from small to large according to market capitalization characteristics: ChiNext MidCap 200 Index< CSI 1000 Index< STAR 100 Index< CSI 500 Index.
Industry distribution competition
The CSI 500 Index and the CSI 1000 Index span the Shanghai and Shenzhen stock exchanges, so the number of industries covered is greater than that of the ChiNext Mid-Cap 200 and the STAR 100, which are two single-market indices, and the industry distribution is also more balanced.
Specifically, the CSI 500 Index and the CSI 1000 Index fully cover 31 Shenwan first-class industries; The constituent stocks of the ChiNext Mid-Cap 200 Index are distributed in 24 Shenwan first-class industries, and do not involve transportation, banking, coal, steel and other industries; The constituent stocks of the STAR 100 Index cover 10 Shenwan first-class industries, and do not involve media, non-ferrous metals, social services, food and beverage and other industries.
Further comparing the differences in the industry distribution of the CSI 500 Index and the CSI 1000 Index, it can be found that the CSI 500 Index has more allocations in power equipment, non-ferrous metals, non-bank finance, national defense and military industries. The CSI 1000 Index has more allocations in industries such as medicine and biology, electronics, basic chemicals, machinery and equipment.
From the perspective of weighted industries, the top three weighted industries of the CSI 500 Index are medicine and biology, power equipment, and electronics, accounting for 29% of the total; The top three weighted industries of the CSI 1000 Index are pharmaceuticals and biology, electronics, and computers, accounting for 31% of the total.
Next, let's compare the ChiNext MidCap 200 Index and the STAR 100 Index. As can be seen from the chart below, the ChiNext Mid-Cap 200 Index has more allocations in computer, media, national defense and military industry, communications and other industries; The STAR 100 Index has more allocations in industries such as medicine and biology, electronics, power equipment, and machinery and equipment.
Specifically, from the perspective of weighted industries, the top three weighted industries in the ChiNext Mid-Cap 200 Index are computers, electronics, and medicine and biology, accounting for 51% of the total; The top three weighted industries in the STAR 100 Index are pharmaceutical, biological, electronics, and power equipment, accounting for 69% of the total, with a relatively higher degree of concentration.
Overall, the top three weighted industries of the four indices include two new economy industries, pharmaceutical, biotechnology and electronics. Among them, the weights of pharmaceutical biology in the CSI 500 Index, CSI 1000 Index, ChiNext Mid-Cap 200 Index and Kechuang 100 Index are 11%, 13%, 17% and 32% respectively, and the weights of electronics are 9%, 11%, 17% and 21% respectively. It is not difficult to find that the "quality" of medicine, biology and electronics in the Science and Technology Innovation 100 Index is more sufficient.
How much do you know about the differences between the constituent stocks?
Due to the large number of constituent stocks included in the CSI 500 Index and the CSI 1000 Index, the concentration of individual stocks is very low, with the total proportion of the top ten weighted stocks being only 6.5% and 3.9% respectively, and the proportion of individual constituent stocks is less than 1%.
The number of constituent stocks included in the STAR 100 Index and the ChiNext Mid-Cap 200 Index is relatively small, and the concentration of individual stocks is relatively high, with the top ten weighted stocks accounting for 23.3% and 14.2% respectively.
Due to the definition of the scope of stock selection in the index compilation plan, the constituent stocks of the CSI 500 Index and the CSI 1000 Index are completely different, and the constituent stocks of the STAR 100 Index and the ChiNext Mid-Cap 200 Index do not overlap.
However, there will be constituent stocks in the CSI 500 Index and the CSI 1000 Index: 60 of the STAR 100 Index are the same as the CSI 1000 Index and 24 are the same as the CSI 500 Index; Among the ChiNext MidCap 200 Index, 154 are the same as the CSI 1000 Index and 8 are the same as the CSI 500 Index. As can be seen from the above table, Xingqi Ophthalmology is the largest weighted stock in both the ChiNext Mid-Cap 200 Index and the CSI 1000 Index, while Huitai Medical appears in the top ten heavyweights of both the Science and Technology Innovation 100 Index and the CSI 1000 Index.
The growth potential is in the spotlight
The growth potential of small- and mid-cap stocks is generally the focus of investors.
According to data from China Merchants Securities, in the past three years, the compound growth rate of net profit of the constituent stocks of the STAR 100 Index has been the highest among the four indexes, while the compound growth rate of net profit of the constituent stocks of the CSI 1000 Index and the ChiNext Mid-Cap 200 Index has declined. In 2024, all four index constituents are expected to perform even better. Among them, the net profit growth rate of the constituent stocks of the Science and Technology Innovation 100 Index was as high as 685%; The net profit of the constituent stocks of the ChiNext Mid-Cap 200 Index and the CSI 1000 Index both turned to increase, with a growth rate of more than 70% and nearly 50% respectively; The net profit growth rate of the constituent stocks of the CSI 500 Index was about 30%.
From the perspective of return on equity, the average return on equity of the constituent stocks of the CSI 500 Index is 7.7%, which is relatively good among the four indexes. Judging from the forecast performance in 2024, the ChiNext Mid-Cap 200 Index and the CSI 500 Index are expected to go further and achieve a return on equity of more than 9%.
You can fully consider your own risk tolerance according to your own investment objectives, investment period, investment experience, asset status and other factors, and make investment decisions cautiously on the basis of understanding the basic characteristics and valuation level of the index.
At present, there are CSI 500 ETF E Fund (510580), CSI 1000 Index ETF (159633), Kechuang 100 ETF E Fund (588210), ChiNext 200 ETF E Fund (159572) and other products tracking these four indices respectively.
(Disclaimer: Investment in funds is risky, please invest with caution.) This contribution does not represent the views of China Fund News and does not constitute any investment advice. ）