"In the past five years, the ETF market has experienced changes in product layout, marketing and publicity, investor acceptance, and even the subversion of the industry pattern. Talking about the feelings of engaging in ETF marketing since 2018, some public offering practitioners sighed. The drastic changes in ETFs have become a consensus in the market.
In 2023, against the backdrop of market volatility and poor returns on active equity, ETFs will break through the encirclement and show a carnival trend. However, under the head effect, not all ETFs can enjoy the dividends of this carnival, and many products have withdrawn from the market. In order not to fall behind in the fierce competition, many public offerings took the initiative or were forced to participate in the "battle of involution", or to reduce the rate or seize the starter, in order to find their own magic weapon to stand out from the encirclement, and at the same time, there are also "calm factions" wandering outside the door, waiting, planning the possibility of a piece of the pie.
*Coexistence. The team is so busy that their feet don't touch the ground" - this is the best interpretation of how hot the ETF was during the year.
In 2023, the company will participate in more than 1,000 institutional roadshows, channel roadshows, and investment education activities for ETF products. "The company's investment research team conducts roadshows and interviews more than 400 times a year, and has become one of the teams that communicates with investors and outputs views the most in the market. "When it comes to the operation experience of ETFs during the year, the answers given by some powerful public offerings are relatively similar.
In 2023, the ETF carnival momentum will be fully displayed, but in the context of scale and liquidity becoming the right to "absorb gold", not all products can enjoy this feast, and many ETFs are facing a liquidation crisis or even quietly withdrawing, leaving a lonely back for the market. According to the data of Oriental Wealth Choice, a total of 39 ETFs entered the liquidation process during the year, of which 12 were due to the fact that the net asset value was lower than the contract limit, and 27 were terminated by the consent of the general meeting of **holders.
As of the end of the third quarter, only from the perspective of equity ETFs (excluding initiation products), among the 719 products available from the whole market data, 92 products have a product scale of less than 50 million yuan, accounting for 12%, of which 19 products have a product scale of less than 20 million yuan. Specifically, as of the end of the third quarter, the scale of equity ETFs, Huatai Pineapple CSI 300 ETF, has reached 1200400 million yuan, and the scale of ChinaAMC SSE Science and Technology Innovation Board 50 component ETF also exceeded 90 billion yuan, which was 9467.3 billion yuan. In contrast, the size of the SPDB AXA CSI Shanghai-Hong Kong-Shenzhen Consumer Leader ETF is as low as 580950,000 yuan, a difference of 1,2003.4 billion yuan. The scale of China Merchants CSI Nonferrous Metals Mining Theme ETF also did not exceed 10 million yuan, only 78390,000 yuan.
It is worth mentioning that the broad-based ETF track has become a battleground for soldiers, and the competition is particularly fierce, and many mainstream broad-based index ETFs have also been forced out of the competition during the year. Among them, there are as many as 28 ETF products linked to the CSI 300 Index, but the difference between the beginning and the end of the product scale is more than 12002.5 billion yuan, and even the CSI 300 ETF appeared in the liquidation list during the year. In addition, as of the end of the third quarter, the scale of IB CSI 300 ETF and Penghua CSI 300 ETF did not exceed 50 million yuan.
On the one hand, there is a frenzied layout of new products, and on the other hand, there are frequent liquidations of "laggards", and the "song of ice and fire" played by ETFs during the year has also made practitioners focusing on product marketing anxious.
A leading public offering market person bluntly said, "Compared with 2018, ETF operations have ushered in changes in many aspects, such as product layout, marketing and publicity, investor acceptance, and even the industry pattern." The industry pattern of broad-based products tends to be stable, and the segmentation of industry-themed products has been further improved. However, in the broad-based field, latecomers have little opportunity to enter a relatively stable market structure, and in the industry theme field, some products are over-subdivided or have average long-term investment value, which also leads to a certain degree of waste of resources."
A public offering insider in Shanghai also bluntly said that at present, in the context of the obvious head effect of the ETF market, the difficulty in developing related products lies in whether the institution itself has a first-mover advantage, such as the background of bank channel distribution.
The Red Sea rises and falls. Can't stop" - on the basis of a large amount of resource investment and platform construction and maintenance in the early stage, both the head players and industry rookies have been tied to the same tank that never stops moving forward, and the competition tends to be "white-hot", and the homogenization problem cannot be solved, so the fee will be reduced.
On September 5, E Fund** announced that the annual management fee rate of E Fund Science and Technology Innovation 50 ETF and related connections** will be increased from 05% to 04% and the annual rate of custody fee is 01% to 008%。
Also in September, Huaan** and ICBC Credit Suisse** also reduced their fees for their SSE STAR Market 50 ETF and related connections**. Among them, the annual rate of management fee for Huaan** related products is 05% to 015%。
Yu Fenghui, an economist and new financier, said that the ETF "fee reduction wave" has a positive significance and impact on public offerings, which can improve the competitiveness of ETFs to a certain extent, attract more investors to participate, and increase the scale of products.
However, there are also views that the rate war for increasing the scale is not a long-term solution. According to the current rate structure, it is estimated that the scale of an ETF must reach 3 billion to 4 billion yuan to achieve breakeven. If the fee is further reduced, it will inevitably require the scale of the product itself or the company's overall index business to be large enough to reduce the operating cost of a single product through scale effect, otherwise, the long-term imbalance between revenue and expenditure will not be maintained after all.
In addition to fee reduction, mining subdivision tracks has become the choice of more institutions, aiming to seize the first-mover advantage of "no one else has it". According to the official website of the China Securities Regulatory Commission, on September 4, Yongying** became the first ** manager in the whole market to apply for the CSI Shanghai-Shenzhen-Hong Kong ** Industry ** ETF.
On November 15, Huatai Pineapple CSOP SGX Pan-Southeast Asia Technology ETF (QDII) was officially approved, becoming the first ETF in the whole market to invest in the pan-Southeast Asia technology industry. As the first Dow Jones Index ETF in China, Penghua Dow Jones Industrial Average ETF under Penghua** has been approved and will be officially launched on December 25.
In Cathay's view, the current ETF layout has tended to be close to the Red Ocean, but there are still many subdivisions to be explored, which requires the company to work harder. Since 2023, the investment scope of newly issued ETFs has become more refined than in previous years, further meeting the segmented needs of investors and improving the construction of the ETF ecosystem. Broad-based ETFs, mainstream industry ETFs and other stock markets are already the red ocean, so it is necessary to use their brains in the incremental market and increase resource investment in products, including the construction and improvement of ETF management teams, the marketing and promotion of ETFs, and the cultivation of ETF professional sales teams.
When the stock products are floating in the "red sea" and new entrants are gearing up, it is urgent for various public offerings to explore ways to break through in the ETF market. Cathay believes that the most important thing in the layout of the ETF market is to do a good job in providing services and accompanying investors. It is necessary to prompt and analyze the hot spots or changes in the ETF market to investors in a timely manner.
Zhang Yun, general manager of the index and quantitative investment department of Yongying**, pointed out that the company's goal in the direction of ETF is to "create a new benchmark for high-quality indexes". Therefore, we will carry out the research and development of index products on the basis of in-depth thinking of investment research, and the product design will be based on innovation, and strive to provide instrumental products with both long-term returns and short-term elasticity and distinctive styles. He revealed that in the future, he will make a differentiated layout in the two directions of industry theme and smart beta in index categories such as A-shares, Hong Kong stocks and global QDII, so as to provide investors with more high-quality underlying allocation tools.
Onlookers lingered.
There are no new plans" - broad-based ETFs are becoming more crowded, industry ETFs continue to explore, and the index market is undoubtedly a "bonanza", but not everyone wants or dares to become a "gold digger".
As of the end of the third quarter, among the top 30 institutions in terms of public offering under management, the total assets of more than 500 billion yuan and 400 billion yuan respectively Industrial Securities Global ** and Central Europe ** have not yet laid out ETFs, and Bank of Communications Schroders** has only established one ETF in 2009 and 2011.
There are concerns about the current layout of ETFs. A large public offering insider said that the ability endowment required for active management** is quite different from that of passive index**, which focuses on index development, product design and sales capabilities, and the advantages of active management are not easy to migrate to passive products. In addition, the scale effect of ETF is obvious, and the initial investment is large, if it fails to reach the ideal scale, the company's profitability will also be greatly dragged down.
We did ETFs in the early years, but the cost was high for small and medium-sized public offerings, and the development was not as good as that of head public offerings, so we had to give up. At present, I have not heard of the relevant new plans, and may still focus on highlighting the advantages of equity products. A person from the public offering market department in Shanghai said frankly.
Different from the hesitation and wait-and-see of some institutions, some public offerings have revealed the trend of testing the waters, planning to take a share of the ETF market. The above-mentioned public offering insider in Shanghai pointed out that the ETF track is relatively more "volume" of marketing resources, channels and investment resources, and some public offerings will consider these aspects when choosing to lay out ETFs, and may choose not to issue products for the time being out of concerns about insufficient resources. But at the same time, he also revealed that his institution will soon issue a thematic index** to fill the product line, but the company's main focus will still be on active equity products.
The competition model of the industry is changing, the past huge amount of resource consumption, high and high mode is unsustainable, the future of the ETF field may turn to the test of the comprehensive strength of the first manager, including the forward-looking research ability of product layout, the coordination and co-ordination ability of the company's resources, the ability to cooperate between front-end sales and middle platform marketing, the ability to refine the daily operation and maintenance of products, etc., and the construction and cultivation of these capabilities is by no means an overnight achievement. The above-mentioned head public offering ** market participants said.
Beijing Business Daily reporter Liu Yuyang Hao Yan.