The war on public ETFs (exchange-traded**) has shifted to more broad-based indices.
On February 19, 10 publicly offered ** companies approved CSI A50 ETF for centralized sale, 10 products all adopted the current minimum rate, and set an initial offering ceiling of 2 billion yuan.
Since the CSI 300, CSI 1000, CSI 2000 and other broad-based ETFs before the Spring Festival continued to "absorb gold", broad-based ETFs are gaining more market attention. ETFs have always been a game played by the leading "big manufacturers" in the public offering industry, but judging from the companies owned by the A50 ETF that was launched this time, it is obvious that more ** companies also want to grab a piece of the broad-based ETF market.
Industry insiders told the "International Financial News" reporter that under the current market position, long-term investment institutional funds will pay more attention to the allocation opportunities of broad-based ETFs, and low fees will also be the general trend of ETF operation in the future.
The products are sold in a bunch.
On the first trading day after the holiday, the CSI A50 ETF for sale was very interesting.
It is understood that the 10 publicly offered companies that sell CSI A50 ETF products are Huatai Berry**, E Fund**, Harvest**, Fuguo**, Yinhua**, Huabao**, Morgan**, Dacheng**, ICBC Credit Suisse**, and Ping An**. From the perspective of the scale of the management public offering, there are both industry leaders and medium-sized companies, which also means that more companies will join the competition of broad-based index products.
According to the prospectus, all 10 A50 ETFs use the industry's lowest current rate: 015% annual management fee rate and 005% annual hosting rate. The minimum fee is set for the initial offering of new products, which also interprets the "battle" of ETF fees to the extreme. The fundraising limit of the 10 products is 2 billion yuan, and if all of them can be established, it will bring 2 billion yuan to 20 billion yuan of funds to the market.
Why do all 10 companies "roll" the same product? The answer lies in the CSI A50 Index.
According to the official website of China Securities Index, the CSI A50 Index was released on January 2 this year, and the index selects the 50 largest market capitalization ** from the leading listed companies in various industries as the index sample to reflect the overall performance of the most representative leading listed companies in various industries. The top 10 weighted stocks show that they mainly include large-capitalization companies from the consumer, financial, industrials, utilities, raw materials and pharmaceuticals sectors, which together account for nearly 50% of the index weight.
It is precisely because it represents the leading enterprises in various industries that the CSI A50 Index is also known as the "China Beautiful 50" in the industry. Choice data shows that as of the end of 2023, the index has been active since the base date (201412.31) since the cumulative increase is 357%, and the return of the Shanghai 50 Index was -9 during the same period9%, and the CSI 300 index yielded -29%。
Yang Delong, chief economist of Qianhai Open Source, said in an interview with the reporter of "International Financial News" that the CSI A50 Index reflects 50 companies with large A** values, which have received high market attention and good future development prospects.
J.P. Morgan Asset Management China's Chief Executive Officer, Qionghui Wang, said she was pleased to participate in the first tranche of the offering as the only foreign** manager. Wang Qionghui pointed out that "the CSI A50 Index will help investors tap the growth point of China's economy and become an important target for domestic and foreign funds to allocate A-share core assets." ”
Public offering frenzy "volume" ETF
Many A50 ETFs rushed to sell on the first day after the holiday, which also reflects the current popularity of broad-based ETFs in the market. The reporter noticed that before the Spring Festival, broad-based ETFs such as CSI 300 ETFs were continuously bought by a large number of funds during the market downturn, and the daily turnover of some CSI 300 ETFs ranked first among all ** ETFs for many times.
A public offering practitioner told reporters that the pre-holiday ** continued to be in a low position, and from the perspective of medium and long-term allocation, the index was obviously in an undervalued position. At the same time, broad-based ETFs are relatively more favored by long-term institutional funds such as insurance funds, which will increase the allocation proportion of broad-based ETFs, so the share of many broad-based ETFs is extremely fast in the short term**.
The person believes that industry theme ETFs are more dependent on industry outlets. Compared with industry-themed ETFs, broad-based ETFs have shown a strong ability to absorb gold in the market period. "At present, my company is also attaching great importance to the product layout of broad-based ETFs."
When it comes to fee reductions, industry insiders pointed out that this is not a new thing for the public offering industry, and there have been ** reductions in management fees and custody fees before. Since last year's public offering fee reform, in addition to the product selection, more companies have chosen to reduce the fee rate to attract funds.
Since 2023, a number of ETFs and ETF feeds** have lowered their management fees. In January this year, Invesco Great Wall changed the management fee of its GEM 50 ETF from an annual rate of 05% is adjusted to an annual rate of 015% and escrow rates range from 0 per annum1% is adjusted to an annual rate of 005%；In February, the annual management fee rate of ICBC CSI 300 ETF and its connection** increased from 045% to 015% and the annual rate of escrow fee is 01% to 005%。
A leading public offering person told reporters that the low fee rate of index products will be a general trend in the future.
Yang Delong also told reporters that the current ETF fee rate is relatively low, which may also be the trend in the future, because the ETF operating cost is relatively low, and reducing the fee rate is also a way to benefit investors.