The first batch of ten CSI A50 ETFs were approved together
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Another broad-based ETF product has been launched in the new year. On February 2, reporters learned that the first batch of ETF products tracking the CSI A50 Index reported by 10 public funds were approved simultaneously.
Industry insiders said that the CSI A50 Index depicts the overall performance of the securities of leading listed companies in various industries in the A-share market from a new perspective, and is expected to become one of the important broad-based indexes representing the core assets of A-shares.
With the approval of this batch of index products, individual and institutional investors will have new and convenient tools to share in China’s economic growth, and the issuance of subsequent products will also inject more incremental funds into the market.
Specifically, the A50 ETFs declared by five public funds, E Fund, Huatai PineBridge, Harvest, ICBC Credit Suisse, and Morgan, will be listed on the Shanghai Stock Exchange; the products declared by five fund companies, Wells Fargo, Huabao, Ping An, Dacheng, and Yinhua, will be listed on the Shenzhen Stock Exchange. .
“Ping An Fund’s report of CSI A50 ETF this time is based on its optimism about core assets. In the short term, global liquidity may usher in an inflection point, and emerging markets are expected to usher in an increase in global capital allocations; domestically, the economic cycle has bottomed out and stabilized, and the core Assets are the first to benefit. In 2024, core assets are expected to usher in a new round of double-click profits and valuations.” Qian Jing, head of investment at Ping An Fund ETF Index Center, said that core asset investments need to keep pace with the times, and the CSI A50 Index will continue to grow in the traditional broad-based On the basis of market value selection, we will focus more on industry balance, and at the same time introduce the concept of ESG sustainable investment, aiming to create a new benchmark for “core assets”. To make gains in the stock market, both profitability and valuation are essential. Compared to making money with fluctuating valuations, choosing high-quality, stable-profit companies and growing with them is a better opportunity to seize.
“Compared with the CSI 300 and SSE 50, CSI A50 has reduced its weight on banking, food and beverage and other industries, and increased the proportion of power equipment, new energy and medicine; compared with MSCI A50, CSI A50 has mainly reduced its weight on banks. The weight of CSI A50 has increased the proportion of medicine and non-bank finance; compared with the Shenzhen Stock Exchange 50, the CSI A50 has mainly reduced the weight of electronics, home appliances, automobiles, agriculture, forestry, animal husbandry and fishery, effectively making up for its weight in banking, power and public utilities. The vacancies have increased the proportion of non-bank finance.” Analysis from Dacheng Fund said that overall, the distribution of CSI A50 industries is more balanced. After the transformation, the weight of the new economy representative industries has increased, making it more representative and achieving cross-border development. Market coverage.
From the perspective of market value coverage, Dacheng Fund introduced that the 50 constituent stocks in the CSI A50 Index cover approximately 15.5% of the current market value of the entire A-share market. Not only that, this “head concentration effect” is also reflected in revenue and profits. From the perspective of revenue and profit ratio, the operating income of index constituent stocks accounts for 17.5% of the operating income of the entire A-share market, and the net profit attributable to shareholders accounts for 16.5% of the entire market. It can be said that the CSI A50 Index constitutes the largest share of the stock market. Head core assets.
In terms of constituent stocks, compared with key broad-based indexes such as the Shanghai Composite Index, Shanghai Composite 50 Index, and CSI 300 Index, the CSI A50 highlights the overall leading characteristics of A-shares, and gathers a group of listed companies that are both in high-quality tracks and top students. Among them, the CSI A50 stocks to be selected must meet the ranking of the first in the daily average free float market value of the CSI three-level industries in the past year, covering 50 CSI three-level industries. “It can be said that index constituent stocks naturally tend to develop relatively mature high-quality tracks.” Su Huaqing, fund manager of the Quantitative Investment Department of Wells Fargo Fund, said.
It is worth mentioning that during the compilation process of the CSI A50 Index, “ESG negative elimination” was performed to eliminate the securities of listed companies with CSI ESG evaluation results of C and below. More than 80% of the sample ESG ratings are A and above. Reduce the probability of major negative risk events in index samples and better protect the rights and interests of investors.
After continuous adjustments, the CSI A50 Index is currently at the historical bottom area, with large room for valuation repair. Harvest Fund stated that my country’s economy is shifting from a stage of rapid growth to a stage of high-quality development. As the adjustment of industrial structure continues to deepen, the scale effect within the industry becomes more and more significant, and the share of core leading companies is expected to further increase. As a “super-large-cap” index that reflects this trend, the CSI A50 Index has prominent mid- to long-term allocation value.
As the only foreign fund company among the first batch to receive the issuance of CSI A50 ETF, Morgan Asset Management believes that CSI A50 ETF takes into account both Chinese characteristics and international perspectives and is expected to become a new business card for domestic and foreign funds to allocate Chinese equity assets. According to Wang Qionghui, CEO of J.P. Morgan Asset Management China, after three years of correction in the A-share market, China’s core assets have reached an optimal time for allocation. The CSI A50 Index has a different strategic significance. It is the A50 released by China Index Company and is also a more “localized” A50. “As China’s economic transformation and upgrading continue to deepen, the CSI A50 Index will help investors tap new growth points in China’s economy and become another important target for domestic and foreign funds to allocate A-share core assets. We will also use the Morgan Group Global Resources not only promotes this index to domestic investors, but also to overseas investors,” Wang Qionghui said.
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