At the beginning of the new year, "ETF Connect" ushered in a gift package of "recruiting new people". As early as July 4, 2022, ETF Connect officially set sail, and the first batch of products included in the "ETF Connect" at that time included 83 northbound products and 4 southbound products. After several expansions, the number of "ETF Connect" products has exceeded 100. According to the latest announcement of the Hong Kong Stock Exchange, 11 ETFs will be included in the Stock Connect on January 15, 2024, and the total number of products in the "ETF Connect" will reach 150. According to data from the Hong Kong Stock Exchange, the 11 new members of ETF Connect include a number of featured ETFs. Among them, there are 9 listed on the Shanghai Stock Exchange, namely Huatai Pineapple Dividend Low Volatility ETF, Invesco Great Wall Dividend Low Volatility 100 ETF, Southern Yangtze River Protection Theme ETF, E Fund Yangtze River Protection ETF, Wells Fargo SSE Index ETF, Cathay Pacific Steel ETF, Cathay Games ETF, Huaxia Artificial Intelligence AIETF, GF Science and Technology Innovation 50 ETF Leader, etc.; and 2 listed on the Shenzhen Stock Exchange, including Bosera ChiNext ETF and Invesco Great Wall Venture 50 ETF. Many industry insiders believe that the "ETF Connect" has been operating smoothly for more than a year, and the trading activity of both southbound and northbound investment has continued to increase. The expansion of ETF Connect not only enriches investors' layout tools, but also improves the liquidity of ETF products in the two places and enhances the international status of China's capital market.
11 ETFs will soon be included in the "Stock Connect" listRecently, the Hong Kong Stock Exchange issued an announcement on the change of the list of Shanghai-Hong Kong Stock Connect and the list of Shenzhen-Hong Kong Stock Connect, in which 9 products listed on the Shanghai Stock Exchange and 2 products listed on the Shenzhen Stock Exchange will be included in the list of Mainland-Hong Kong Stock Connect, at that time, the total number of Shanghai-Hong Kong ETFs will reach 85, and the number of Shenzhen-Hong Kong Stock Connect will also reach 57. This expansion is the sixth expansion since the launch of ETF Connect, and the first expansion of the list of Southbound stocks this year. 
It is worth mentioning that many of the 11 ETFs to be included in the Stock Connect are featured ETFs in the mainland market. Zhao Yunyang, investment director and manager of Bosera Index and Quantitative Investment Department, said that the varieties included in the "ETF Connect" include broad-based, industry-themed and Smart Beta ETFs, and the product types are relatively rich. He further pointed out that since the launch of ETF Connect, the overall trading volume of both Southbound and Northbound ETFs has continued to increase, which shows that ETF Connect has broadened the investment scope for Hong Kong and Mainland investors and met the cross-border allocation needs of both types of investors. In the future, the development of ETF Connect can complement the investment varieties of Hong Kong and the Mainland, thereby invigorating the ETF market. Liu Jun, assistant general manager and director of the index investment department of Huatai Berry**, also said that since its opening, the number of ETF products in the Stock Connect has continued to increase, and the trading popularity and transaction scale have increased, and the inclusion of ETFs in the Stock Connect target may bring new opportunities for cross-border investment. Liu Jun said that due to the certain differentiation of ETF products between A-shares and Hong Kong ** markets, "ETF Connect" has brought an increase in investable targets for investors in the two places, especially in the A-share ETF market, the scale of industry theme ETFs has increased significantly in recent years, and a differentiated development path has emerged, and a number of relatively scarce products in overseas markets have emerged, which has greatly broadened the range of ETF options for Hong Kong ** investors. At the same time, he stressed that the role of ETF Connect in promoting the ETF market is also significant and important. "Although China's ETF market has developed rapidly in recent years, compared with overseas developed markets, the proportion of ETF products is still low, and there is a large space for development. ETF Connect will provide more high-quality domestic ETF products to overseas investors, further enriching investors' allocation options, which is conducive to enhancing the activity of the ETF market and enhancing the core competitiveness of China's capital market in the world." ”
The trading volume of ETF Connect continues to grow
Since the opening of the "ETF Connect" on July 4, 2022, not only have the included products been continuously enriched, but the trading popularity and transaction amount have also gradually increased. 
Judging from the situation in the first few trading days of 2024, the trading volume of "Southbound" and "Northbound" ETFs is relatively large. According to data from the Hong Kong Stock Exchange, from January 1 to January 9, the total turnover of "northbound" reached 46RMB 6.7 billion; The "southbound" side of the transaction value was 147HK$3.2 billion. If we look at the overall data since the opening, the total transaction volume of "northbound" has reached 12869.7 billion yuan, and the "southbound" reached 7457HK$6.3 billion. The data also shows that since the launch of "ETF Connect", the overall trading volume of "southbound" and "northbound" has increased significantly. If we look at the monthly data in December 2023, the total transaction value of "northbound" in December will reach 1243.8 billion yuan, compared to 39.6 billion yuan, an increase of 304206%；In terms of "southbound", the transaction amount in December last year was 641HK$7.7 billion, an increase of 1,387 compared with the data in July when it was first opened9%。Especially since August last year, the monthly turnover of "northbound" ETFs has continuously exceeded 10 billion yuan, which is significantly higher than before. Talking about the phenomenon of "northbound" ETFs "attracting gold", Liu Jun bluntly said that on the one hand, the number of A**-related products included in the "ETF Connect" has reached nearly 100, whether it is a traditional broad-based ETF or an industry-themed ETF, the types are gradually enriched, and the strategic ETF that overseas investors are more familiar with has also gradually been included in the target; On the other hand, after a long period of downward movement, the valuation of the A** market is at a historically low level, and it may have good participation from the perspective of allocation and trading, and the RMB exchange rate also shows signs of stabilization, which will also attract some northbound funds to participate. Zhao Yunyang attributed the increase in the inflow of "northbound" ETF funds to two reasons: first, the high cost performance of A-share equity assets at the current point in time, the superposition of policies in various fields to boost economic recovery, and the strong willingness of investors to allocate at the bottom; Second, the recent market volatility is large, and trading investors use ETFs to carry out swing operations, thereby increasing the trading activity of ETFs. However, according to the data since the launch of "ETF Connect", the trading volume of "southbound" ETFs is more active than that of "northbound", and basically the trading volume of "southbound" ETF exceeds that of "northbound" every month. In Zhao Yunyang's view, there are not only reasons for the different sizes of funds and investor groups, but also because the layout of mainland ETFs in cross-border varieties is not perfect enough, and ETF interconnection effectively complements the cross-border investment needs of mainland investors.
ETF Connect continues to expandInvest in education and introduce more special productsThe pace of expansion of "ETF Connect" will not stop, and in this process, ** company has also taken active action. "In the past year or so, we have been following our own pace, through investor accompaniment such as live roadshow columns and advertising advertorials to reflect the characteristics of ETFs and attract ETF investors. Cathay ** related people said. Cathay Pacific also said that in the future, the company will actively contact overseas institutional investors, understand the investment and education channels suitable for overseas investors, expand overseas investors through various channels and methods such as foreign shareholders and Hong Kong subsidiaries, and improve investors' recognition of A-share ETFs. Another industry insider said that in addition to actively accompanying investors and communicating with institutional investors, the introduction of more characteristic ETF products into the "ETF Connect" is also the focus of work. Zhao Yunyang said that the products included in the "ETF Connect" have relative advantages in terms of scale and liquidity. In the medium to long term, ETF Connect can provide more convenience for foreign investors to invest in the Chinese market, which is conducive to enriching the ETF customer base. Liu Jun also agrees that the future development space of "ETF Connect" may continue to expand. "The past situation shows that since the opening of both QFII and Mainland-Hong Kong Stock Connect, with the gradual opening of the A** market, the demand for overseas capital allocation of A-shares has generally maintained an upward trend. ETF Connect will also go through a similar process, especially as the process of RMB internationalization continues to deepen, the demand for investing in RMB assets will increase, and the Stock Connect ETF is a good allocation tool to absorb and carry this part of the demand. "ETF Connect will tend to be active and continue to improve in the future. Cathay Pacific also said that the scale and customer base of domestic ETF products will continue to expand. For "northbound" ETFs, foreign investors can directly invest in mainland ETFs through the Hong Kong Stock Connect, especially for investors who are limited by resources and cannot conduct in-depth research on A-shares**, but want to allocate A** markets with the help of tool products, they can easily achieve their investment goals through A-share ETFs, and also help to improve the international influence of mainland indices and ETF products. For "southbound" ETFs, it also provides mainland investors with the opportunity to invest in Hong Kong-listed ETFs through the Hong Kong Stock Connect. Stock Connect is conducive to the entry of medium- and long-term funds, and some ETFs listed on the mainland are expected to receive considerable inflows in the future, especially in sectors with a preference for northbound funds and scarce in the Hong Kong market, which will help enhance the international influence of A-shares. Editor: Xiaomo Review: Muyu.