The Spring Festival holiday has always been an important node to stimulate domestic demand and activate consumption potential, and the ultra-long Spring Festival holiday in 2024 has ignited the public's enthusiasm for consumption. Against the backdrop of a positive market, the first batch of CSI A50 ETFs, which focus on the core assets of A-shares and are being issued, the Wells Fargo CSI A50 ETF (referred to as "CSI A50 ETF", *159591) may be a powerful tool for investors to participate in the current market.
It is understood that the CSI A50 Index selects 50 representative large-capitalization leading companies in Shanghai and Shenzhen, which can be called an upgraded version of China's "beautiful 50". In terms of compilation scheme, different from the traditional broad-based index, the CSI A50 Index adopts three more "distinctive" compilation factors - excluding companies with low ESG scores, selecting large-capitalization leaders by industry and selecting constituent stocks are all subject to Stock Connect, and portraying the overall performance of the representative leading listed companies in the A-share industry from a new perspective, which can be described as a new generation of core asset benchmarking index.
From the perspective of industry distribution, the industry distribution of the CSI A50 Index is more balanced than other mainstream broad-based indexes, and the constituent stocks are mainly distributed in 27 Shenwan first-class industries such as food and beverage, non-bank finance, medicine and biology, and power equipment, which widely represent the overall market opportunities of China's new economy. At the same time, the CSI A50 Index gives different weighting factors to the constituent stocks, so that the weight of a single sample does not exceed 10%, so as to effectively avoid the phenomenon of "one share dominating" and the significant impact of the stock price change of a single ** on the overall index.
Specifically, from the perspective of the constituent stocks of the CSI A50 Index, it includes traditional and emerging industry leaders, and gathers a group of listed companies that are both in the high-quality track and top students. Wind data shows that as of January 31, 2024, the average market value of the constituent stocks of the CSI A50 Index is 261.3 billion yuan, and the weight of the market value of more than 100 billion yuan accounts for 91%, and the large market capitalization attribute is outstanding. At the same time, compared with other mainstream broad-based indices, the liquidity of the constituent stocks of the CSI A50 Index is more optimized, and the total weight of the free float market value of the constituent stocks accounts for more than 30% of the total market capitalization, as high as 92%.
As a new generation of core broad-based indexes, the CSI A50 Index's leading demeanor is also reflected in the strong profitability of its constituent stocks. Wind data shows that as of the end of January 2024, more than half of the constituent stocks of the CSI A50 Index have ROEs in the top 20% of the industry, with good profitability; At the same time, the CSI A50 Index's unanimous** net profit grew by 73%, which is significantly higher than the SSE 50 Index -08%, MSCI China A50 Index 57% and other broad-based indices of the same kind.
With the support of multiple highlights such as balanced industry distribution, outstanding large market capitalization characteristics, and strong profitability, the CSI A50 Index has achieved significant medium and long-term excess returns, and its historical performance leads similar broad-based indexes. Wind data shows that as of January 31, 2024, the CSI A50 Index has risen by more than 28 since the base day of December 31, 201407%, which is better than the performance of MSCI China A50 Index and FTSE China A50 Index in the same period; As of February 2, 48 of the constituent stocks of the CSI A50 Index are valued below the historical center, and 44 are cheaper than 80% of the time, and the investment cost performance is more prominent.
Looking ahead, Su Huaqing, the proposed manager of Wells Fargo CSI A50 ETF, said that the consumption data during the Spring Festival showed the upward momentum of the economy and enhanced investors' confidence. In the future, as the market clears, the cost performance of asset allocation with good profit attributes, strong expected growth and low valuation may be further highlighted. In this context, the CSI A50 Index, which focuses on blue chips and outstanding leading attributes, is expected to become a powerful tool for investors to participate.