Since August, more than 100 billion yuan of funds have entered the market through ETFs, and the five major tracks are favored
Since August, the three major A-share indexes have shown a trend of shock and correction. As of the close of trading on August 25, the Shanghai Composite Index had a cumulative monthly decline of 6.90%, and the Shenzhen Stock Exchange Component Index and GEM Index had a cumulative monthly decline of 9.42% and 8.78% respectively.
However, since August, the behavior of “buying more as the price drops” through ETFs (traded open-end index securities investment funds) has become increasingly prominent. Oriental Fortune Choice data shows that since August as of the close of August 25, the share of 661 stock ETF products in the A-share market has increased by 69.401 billion units, with a growth rate of 6.02%. If roughly calculated based on the average transaction price on the day of subscription, approximately 109.153 billion yuan of funds entered the market. The funds mainly flowed through ETF funds to the five major tracks of medicine, chips, semiconductors, military industry, and artificial intelligence.
Strong support from the policy level provides assistance for long-term funds to enter the market. On August 24, the China Securities Regulatory Commission held a symposium with the main leaders of the National Council for Social Security Fund and some large banking and insurance institutions. The meeting proposed that under the new situation of domestic economic transformation and upgrading, deepening of financial market reform, and downward movement of long-term interest rates, it is time for medium and long-term funds such as pensions, insurance funds, and bank wealth management funds to accelerate the development of equity investments.
In this regard, Xu Shengxiong, the product manager of the Public Offering Network, who was interviewed by a reporter from Securities Daily, said that ETFs have the characteristics of low fees, good liquidity, convenient transactions, risk diversification, small tracking errors, and low research costs. Therefore, ETFs are an ideal investment for institutional investors. An important tool for the A-share market; superimposed on the fact that the current A-share market is at multiple bottoms such as valuation and market, the risk of allocating A-shares at the current position is relatively controllable, and there is a large space for future imagination, which has certain long-term allocation value. Therefore, institutional funds that focus on long-term value investment use ETFs to buy A-shares at the bottom.
Zeng Sheng, the fund manager of Kurosaki Capital who holds the same view, told reporters that ETF products have the characteristics of diversified investment. You can obtain investment opportunities in multiple stocks by purchasing ETFs, thereby achieving risk diversification. In the case of market fluctuations, ETFs can better control risks. ETFs have played a positive role in promoting the development of domestic equity funds, promoting the entry of long-term funds such as pension funds into the market, and implementing the strategy of capital markets serving the real economy. The rapid development of ETFs will provide more high-quality long-term allocation funds for the A-share market. Under the current background of economic transformation and upgrading, financial market reform and the decline of long-term interest rates, ETF products on popular themes and industries with long-term investment value are more popular due to policy dividends.
From the perspective of fund share growth, as of August 25, the Science and Technology 50 ETF has increased by 15.260 billion shares since August, ranking first; the medical ETF has increased by 8.561 billion shares during the period, ranking second. In addition, 7 of the top ten funds with the largest share changes since August are broad-based ETFs.
Bosera Fund said that under the weak market adjustment pattern, the continued inflow of broad-based index ETFs reflects the fact that the overall valuation of the index is at a low level. With the introduction of a series of policy measures to boost market confidence, investors' recognition of the value of equity market allocation is constantly increasing.
In terms of industry theme ETFs, as of August 25, medical ETFs, chip ETFs, military ETFs, artificial intelligence ETFs, and semiconductor ETFs have ranked in the top five in the share growth of theme index ETFs since August, with approximately 3.479 billion yuan, 2.068 billion yuan, 1.211 billion yuan, 626 million yuan, and 462 million yuan respectively.
Regarding investment opportunities in the pharmaceutical industry, Great Wall Guorui Securities stated that the current valuation of the pharmaceutical sector is at the bottom, and the long-term investment logic of the pharmaceutical industry has not changed. The aging of the population has brought about an increase in the number of patients, people’s increased demand for health, technological progress, etc. will continue to promote demand growth in the pharmaceutical industry; a series of current factors have brought certain fluctuations to the industry, but will promote the long-term, high-quality and sustainable development of the industry. At present, the annual expenditures on the medical insurance payment side are in a steady growth trend, and the payment and pricing mechanism for drugs has been marginally improved and tends to be moderate, especially for payment for innovative drugs.
