During the market adjustment period, funds are seeking "safe havens" and pour into broad-based ETFs. In fact, since April this year, broad-based ETFs have had a significant “gold-attracting” effect. Industry opinion believes that this may be because institutional funds are adding large amounts of equity assets.
Recently, the Shanghai Stock Exchange Index has approached the 4,000-point mark, market confidence has recovered, and funds are actively allocating equity assets through stock ETFs (traded open-end index funds).
On April 8, the day when A-shares rebounded, broad-based ETFs such as CSI 500 and CSI 1000 as well as chemical ETFs were among the top net inflows. Data show that as of April 8, the highest net inflow of a single broad-based ETF since April was nearly 9 billion yuan, and the net inflow of multiple products exceeded 1 billion yuan; chemical industry, free cash flow and other theme ETFs have also received funding favor.
Respondents told a reporter from International Finance News that this reflects that although the current market risk appetite is becoming more cautious, funds have not left the market, but are carefully exploring structural opportunities.
The highest “money-attracting” amounted to nearly 9 billion yuan
Market conditions are picking up, and broad-based ETFs are once again favored by funds.
Wind data shows that as of April 8, a total of 7 stock ETFs have had net inflows of more than 1 billion yuan since this month. Among them, CSI 500 ETF South ranked first with a net inflow of 8.959 billion yuan, significantly leading similar products. Other stock ETFs with top net inflows include: CSI 1000 ETF Southern (3.779 billion yuan), CSI 300 ETF Huatai-PineBridge (1.508 billion yuan), CSI 500 ETF Jia. Real (1.486 billion yuan), CSI 1000 ETF China (1.463 billion yuan), chemical ETF Penghua (1.126 billion yuan), free cash flow ETF China (1.005 billion yuan).
It is worth noting that many of the above-mentioned broad-based ETFs gained significant holdings on April 8, the day when A-shares rebounded sharply. Among them, CSI 500 ETF Southern had a net inflow of 7.409 billion yuan in a single day; CSI 1000 ETF Southern, CSI 1000 ETF Huaxia, CSI 500 ETF Harvest, and Chemical ETF Penghua had net inflows of 2.995 billion yuan, 1.529 billion yuan, 1.468 billion yuan, and 1.01 billion yuan respectively on that day.
While funds are actively channeling funds into A-shares, Hong Kong stock-related ETFs have been "in the cold". Data show that among the Hong Kong stock exchange ETFs, only the Southbound Innovative Drug ETF Huitian Fu's net inflow exceeded 100 million yuan on April 8, reaching 165 million yuan; the net outflows of the Southbound Connect Internet ETF Fuguo, China Concept Internet ETF E Fund, and Hong Kong Securities ETF E Fund all exceeded 500 million yuan that day.
Since this month, the GEM ETF E Fund has had the largest net outflow among stock ETFs, with a net outflow of 2.689 billion yuan.
Currently more suitable for balanced strategies
Regarding the recent phenomenon of funds continuing to flow into small and medium-cap broad-based ETFs, Zeng Fangfang, the operator of Paipai.com’s wealth public offering products, said in an interview with a reporter from the International Finance News that this shows that funds are paying more attention to the direction of small and medium-sized caps with both valuation attractiveness and growth potential.
"There are three main reasons: First, the matching between valuation and performance is relatively good. Some small and medium-cap companies have the characteristics of 'lower valuation and faster performance growth', and have a certain cost-effectiveness. Secondly, emphasis is placed on performance certainty. In the current financial reporting season window, funds are more inclined to deploy segmented tracks with higher prosperity and increased performance. Targets with clear long-term expectations. The last step is to adapt to the existing capital environment. In the context of limited market growth, capital flows to the small and medium-cap sectors may have a more obvious allocation effect, which reflects that the current market risk appetite is not leaving the market, but is carefully exploring structural opportunities.
At the same time, funds also tend to flow into ETFs such as CSI 300, chemicals, and free cash flow. Zeng Fangfang said that this shows that the market allocation ideas are more balanced, showing a defensive "dumbbell-shaped" structure. On the one hand, in a low interest rate environment, we pursue relatively certain cash flow returns as the "ballast stone" of the portfolio. On the other hand, opportunities to focus on cycles and value are mainly based on expectations that the supply and demand pattern of traditional industries may improve under policy guidance, as well as the global commodity cycle.
In addition, the continued inflow of broad-based ETFs such as the CSI 300 also reflects the long-term position allocation of some funds to core A-share assets. Overall, this structure reflects the prudent mentality of investors taking into account both defensive and structural opportunities in a complex environment.
Regarding the current relatively "cold" inflow of technology growth theme ETFs, Zeng Fangfang believes that it may need to go through a process of gradually matching performance and valuation. In addition, further support from industrial policies and marginal improvement in global liquidity may also become positive factors in promoting the return of funds.
Regarding investment opportunities in the market outlook, China-Europe Fund stated that in addition to funds with high risk appetite, it is currently possible to consider systematically increasing attention after the visibility of geopolitical and economic changes recovers, and to respond to the subsequent market shock period through balanced strategies: giving priority to the banking sector to stabilize portfolio fluctuations The role of efficiency; followed by the coal chemical sector in the chemical industry chain that is expected to improve beyond expectations, the oil and gas extraction sector driven by high oil prices, and the new energy sector that has significantly improved its prosperity; finally, there are medium and long-term scientific and technological main lines such as AI hardware, independent and controllable themes, innovative drugs and commercial aerospace.
Reporter Xia Yuechao
Copy Editor Chen Si
Layout editor Sun Xiao
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