A new member of the CSI A-Series ETF family has been added.
In just one day from product submission to approval, the first batch of CSI A500ETF reported by 10 public fund companies was approved.
A shares are good! Welcome the living water again
The first batch of CSI A500ETF was approved
As of September 7, the first batch of approved companies such as Harvest Fund, JPMorgan Asset Management, and Invesco Great Wall Fund will officially launch their offerings on the 10th (Tuesday). Industry insiders expect that as an important broad-based ETF in the market, the CSI A500 Index has higher coverage and stronger representation of A-shares, which may provide a new benchmark for investing in China's economy and A-share core assets.
It is reported that the products of five fund companies, including Harvest, Invesco Great Wall, Southern, Cathay and Yinhua, are planned to be listed on the Shenzhen Stock Exchange, and the products of five fund companies, namely JPMorgan Asset Management, Wells Fargo, Huatai Berry, China Merchants and Taikang, are planned to be listed on the Shanghai Stock Exchange.
According to the previous introduction of China Securities Index Company, in order to further enrich the market characterization tools and investment targets, the CSI A500 Index will be released on September 23. The index adopts the industry equilibrium sampling method, and selects 500 securities with large market capitalization from various industries as the index sample, which takes into account the representativeness of market capitalization and industry equilibrium, and reflects the overall performance of the securities of representative listed companies in various industries. In addition, while the CSI A500 Index has good representation, it also includes more emerging field leaders. According to the data provided by China Securities Index Company, the total weight of the industrial, information technology, communication services, and medical and health industries is about 50%, which is higher than that of comparable broad-based indexes, and the latest sample covers all 35 CSI secondary industries and 92 third-level industries, as of the end of July 2024, the total market value of the index sample is about 40 trillion yuan, accounting for more than half of the total market value of A-shares, and it is a new generation of broad-based index with wider coverage.
CSI A500ETF is expected to bring fresh water to the market
In terms of historical performance, the performance of the CSI A500 Index is remarkable. According to the data, as of June 2024, the sample ROE or revenue growth rate of 76.6% of the CSI A500 Index ranks among the top 50% in the same industry. At the same time, the good fundamentals of the constituent stocks also drive the long-term performance of the index. As of August 29, 2024, the CSI A500 Index has risen by 279.58% since the base date (December 31, 2004), while the range returns of the SSE 50, CSI 300 and CSI 800 Indices over the same period were 174.76%, 226.47% and 248.08% respectively. In contrast, the CSI A500 Index may have better long-distance running ability.
With the support of multiple rounds of stable growth policies in the early stage, the recent warming of some economic data has continued to inject confidence into the market. For the follow-up market trend, Tan Hongxiang, deputy director of the index investment department of Huatai Berry Fund, analyzed that on the one hand, the improvement of global liquidity represented by the Federal Reserve's interest rate cut is expected to drive up risk appetite and bring incremental funds to the relatively underallocated core assets in the past two years; On the other hand, the main line of new qualitative productivity formed by the effective implementation of supply-side policies may become a new "reservoir" for liquidity, giving growth assets greater marginal elasticity.
Based on the above analysis, Tan Hongxiang believes that by allocating large-cap blue-chip and sub-industry leading sectors, it is better to grasp the valuation repair opportunities brought about by the improvement of the gradient of market expectations and the rebound of low risk appetite as a whole.
Invesco Great Wall Fund believes that the release of the CSI A500 Index is timely. The release of the CSI A500 Index and the listing of related ETF products will bring new vitality to the A-share market and are expected to bring investors products with a more balanced allocation to the market.
Specifically, first of all, whether from the perspective of valuation, risk premium or trading activity, A-shares are currently in the historical bottom area. Compared with stock indices in major overseas markets, the valuation advantage of A-shares is very prominent. With the recent volatility of the global stock market and the stability of the RMB exchange rate, the attractiveness of the "multiplier" value of A-shares has begun to rise.
Second, although we are in the throes of economic transformation, some indicators show that China's economy is already in the bottom zone and structurally resilient. The inventory of industrial enterprises has bottomed out, CPI and PPI have been moderately repaired, and some globally competitive listed companies have started the cycle of corporate earnings repair.
In addition, considering that the Fed's interest rate cut cycle is expected to start in the second half of the year, global risk appetite is expected to increase, and the margin of overseas liquidity is expected to improve. As the fiscal policy in the first half of the year was relatively prudent, it accumulated a large policy space for the fiscal development in the second half of the year. Invesco Great Wall Fund believes that at present, investors should remain optimistic about the A-share market.
Editor-in-charge: Ye Shuyun
Proofreading: Su Huanwen
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