The ETF market welcomes the new year with the first batch of ten CSI A50 ETFs on sale
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In the first trading week after the Spring Festival, the ETF market “welcomes the new year”. Since February 19, another benchmark index trading tool known as “China’s Beautiful 50” – CSI A50 ETF has been officially launched for sale. The first batch of public funds to issue this product include E Fund, Harvest, Morgan Asset Management, Huatai-PineBridge, Wells Fargo, Dacheng, Huabao, Yinhua, ICBC Credit Suisse, and Ping An.
According to the announcement, the upper limit of the initial issuance of these 10 CSI A50 ETFs is 2 billion yuan, and the subscription deadline is March 1. The total number of valid applications for subscription exceeds 2 billion, and the fund manager will adopt a full proportional confirmation approach to achieve effective scale control.
Public information shows that the CSI A50 Index adopts interconnection standards and integrates ESG investment concepts. The index selects the 50 stocks with the largest market capitalization from the securities of leading listed companies in various industries as index samples to reflect the most representative leading listings in each industry. The overall performance of the company’s stock is also another new member of the A-share broad-based index family. From the perspective of industry distribution, the CSI A50 Index focuses on industry balance. The constituent stocks cover 30 CSI secondary industries and come from different CSI tertiary industries. It uncovers emerging leaders in subdivisions and helps capture the Chinese economy. new growth points.
From the perspective of index performance and corporate profitability, CSI A50 is worthy of the reputation of “China’s Beautiful 50 Index”. Wind data shows that as of the end of 2023, the index has a cumulative increase of 35.7% since the base date (December 31, 2014), exceeding the Shanghai Stock Exchange 50 Index by 45.6% (the Shanghai Stock Exchange 50 Index has a return rate of -9.9% during the same period), exceeding the Shanghai Stock Exchange 50 Index. The Shenzhen 300 Index returned 38.6% (the Shanghai and Shenzhen 300 Index returned -2.9% during the same period). In addition, the performance of the CSI A50 Index constituent stocks in the ESG field is also quite “beautiful”, with more than 80% of the companies having an ESG rating of A or above.
It is reported that the constituent stocks of the CSI A50 Index have always been the core assets heavily held by domestic institutional investors such as public funds, as well as foreign institutional investors represented by northbound funds. Among them, Northbound Funds have continued to increase their positions in the CSI A50 Index constituent stocks since its launch. According to Wind data statistics, as of December 31, 2023, the market value of the CSI A50 Index constituent stocks held by Northbound Funds reached 804.6 billion yuan, accounting for 10% of the market value. The ratio is as high as 40.2%.
Jiang Junyang, the proposed fund manager of Huabao CSI A50 ETF, said that the CSI A50 Index adopts scientific and reasonable compilation rules, takes into account the representativeness of the component stocks’ industries and the leading characteristics of market capitalization, innovatively introduces the concept of ESG sustainable investment, and selects 50 stocks with market capitalization in various industries. As an index sample, the largest securities are expected to become one of the important broad-based indexes that characterize the core assets of A-shares.
“The CSI A50 Index will help investors tap the growth points of China’s economy and become an important target for domestic and foreign funds to allocate core assets of A shares. We will work with our partners to give full play to the group’s global advantages and uphold the principle of ‘invest in China, do We are determined to jointly promote China’s ‘New Beautiful 50’ to the world.” As the only foreign fund manager this time, Wang Qionghui, CEO of J.P. Morgan Asset Management China, said. Han Xiuyi, the proposed fund manager of Morgan CSI A50 ETF, also introduced that the fund has innovatively added a quarterly dividend mechanism. When the excess return rate of the fund relative to the underlying index is positive every quarter, dividends will be forced to be distributed, and the income distribution ratio shall not be lower than the excess return rate. 60%.
Looking forward to the market in 2024, Han Xiuyi believes that after three years of correction in the A-share market, core assets may have reached a rare allocation point. The domestic engine is the recovery of the economy and the recovery of corporate profits. As the fundamentals gradually improve, the trend is for prices to return to value. Meanwhile, a big engine overseas is expectations for the end of the Fed’s rate hike cycle.
Jiang Junyang believes that from the perspective of current investment opportunities, the medium and long-term allocation value of the CSI A50 Index has gradually become apparent. First, with the continuous efforts of macroeconomic policies, my country’s economy is expected to stabilize and rebound, and the profit expectations of listed companies are also seeing an improvement trend. Secondly, under the guidance of my country’s economic transformation and high-quality development policies, the CSI A50 Index, with its reasonable stock selection method, can help investors tap new growth points of China’s economy, or become a good choice for domestic and foreign capital allocation in the A-share market. Important targets; thirdly, after the early adjustment of A-shares, the valuations of leading companies in various industries have been at historically low levels. Combined with the subsequent improvement in profitability of listed companies, the medium- and long-term allocation value of the index has become increasingly obvious.
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