ETFs Enter the Billion-Dollar Market
According to statistics, as of October 31st, the total scale of the CSI A500 ETF has grown to 77.204 billion yuan, and with the fundraising scale of 20 CSI A500 OTC funds exceeding 45 billion yuan, the total scale of index funds tracking the CSI A500 has exceeded 120 billion!
Following the approval for the issuance of A500 OTC funds, HuaAn CSI A500 ETF (Code: 159359) has also been approved and will be officially issued tomorrow! On the A500 index, HuaAn Fund has completed both on-exchange and off-exchange layout, allowing friends to either subscribe to ETFs with stock accounts on-exchange or purchase off-exchange index funds with fund accounts, highlighting convenience.
I. Where is the "Chinese Version of the S&P 500" superior?
1Alignment with international standards
As a benchmark for a new generation of broad-based indices, the CSI A500 index is hailed as the "Chinese version of the S&P 500". In terms of index compilation, it adopts a "three-level industry full coverage, first-level industry rebalancing" method, and includes rules such as ESG, interconnectivity, and restrictions on individual stock weight limits, focusing on alignment with the S&P 500 and international standards.
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2More balanced industry distribution
In terms of industry distribution, the CSI A500 covers all CSI second-level industries and has a third-level industry coverage rate of 98%, which is more balanced compared to traditional broad-based indices like the CSI 300. It also over-allocates to growth sectors such as new quality production forces, avoiding the "top-heavy" style coverage of traditional broad-based indices, and aligning with the new trends of China's high-quality economic development stage.
3Outstanding profitability and growth
In terms of profitability, the average return on equity of the CSI A500 index in 2023 reached 10%, and the average revenue growth rate in the past three years was over 10%, significantly exceeding the overall market level.
In summary, the CSI A500 is more aligned with international index compilation methods and is a new generation of broad-based indices that meet the aesthetics of foreign capital, institutions, and individual investors.
What are the advantages of investing in the CSI A500 through an on-exchange ETF?
II. Four major advantages of ETFs
Flexible trading
On-exchange ETFs trade in the same manner as stocks, with real-time transactions possible during trading hours, and the ability to sell the second working day after purchase. The real-time trading mechanism of ETFs allows investors to flexibly and efficiently capture investment opportunities and exit quickly when needed.
High transparency
ETFs use passive investment strategies to closely track indices, allowing investors to clearly understand the holdings of ETFs and better assess investment risks.
Low cost
ETF management fees are low. Taking the upcoming HuaAn CSI A500 ETF as an example, its management fee rate is 0.15% per year, while the management fee rate for ordinary index-type off-exchange funds is generally 0.5% per year.
Good liquidity
ETFs can be freely bought, sold, or subscribed and redeemed during the trading period, with immediate execution for both purchases and sales, no queuing required, convenient trading, and faster fund availability.
In summary, ETFs are favored by investors mainly because they offer flexible trading, high transparency, good liquidity, and low costs. Compared to off-exchange funds, they are more convenient to trade; compared to stocks, they are more worry-free and diversified.
III. When buying indices, choose a big factory
1Extensive product coverage
As one of the first batch of public fund management companies in China, HuaAn Fund's index products have extensive coverage, including A-shares (broad-based/industry theme), cross-border, commodities, fixed income, Smart Beta, and more, providing a variety of choices for investors with different styles and risk preferences.
2Leading innovation capabilities
In terms of index innovation, HuaAn Fund has pioneered various types of fund products in China, such as open-end index funds, QDII funds, ETF feeder funds, and gold ETFs.
3Experienced team at the helm
Xu Zhiyan, the proposed fund manager of Hua'an China Securities A500 ETF (code: 159359), is a pioneer in the field of indexed investment and ETF management in the domestic public fund industry. He has 18 years of experience in fund investment management and is good at the timing and allocation of large assets. At present, the management scale is more than 85 billion yuan.
The HuaAn Fund Index and Quantitative team, led by him, is one of the influential index fund investment teams in the industry. The first index fund in the country was issued and managed by Xu Zhihan's team in 2002, and the team has rich experience in the field of index investment.
Xu Zhihan believes that "against the backdrop of vigorously developing new quality production forces, buying the CSI A500 index is equivalent to configuring China's core assets with one click." The tool attribute of ETFs is undoubtedly a better choice to help investors layout this index.