On February 2, the first batch of 10 CSI A50 Index ETFs in China were approved at the same time, which attracted much attention, and 10 public offering companies, including Huabao**, all got the "admission ticket".
The CSI A50 Index ETF has attracted so much attention, on the one hand, it is closely related to the increasingly fierce competition in the current ETF track, and 10 publicly offered ** companies have fought against the CSI A50 Index, becoming the first fire on the ETF battlefield in 2024; On the other hand, compared with the existing broad-based indices such as MSCIA50, FTSE A50 and SSE 50 in the market, the CSI A50 Index has its own unique compilation advantages, and may become a new model of A-share "Beautiful 50", and ETF products tracking the index will disrupt the existing pattern of broad-based index ETFs.
The "first fire" of the ETF track in 2024
On January 2, 2024, CSI Index*** officially released the CSI A50 Index. On the same day, 10 public offering companies, including Huabao**, collectively reported ETFs tracking the index, becoming the "first fire" to ignite the ETF track in the New Year.
It is reported that the CSI A50 Index is the first A50 index compiled by a domestic index company in A-shares, and the index selects 50 of the largest market capitalization in various industries as index samples. Compared with the existing broad-based indices such as MSCIA50, FTSE A50 and SSE 50 in the market, the CSI A50 Index selects 50 of the most representative listed companies** from the leading companies in the CSI** industry and meets the investment scope of Stock Connect as index samples, covering a more comprehensive and balanced industry, and innovatively introducing the concept of ESG sustainable investment.
The CSI A50 Index has both large market capitalization attributes and industry representation. According to wind statistics, as of the end of December 2023, the total market capitalization of the index sample is 1217 trillion yuan, with an average of 243.5 billion yuan, covering 30 CSI secondary industries and 50 CSI ** industries. The latest top 10 heavyweights include Kweichow Moutai, Ping An of China, CATL, China Merchants Bank, Midea Group, Yangtze Power, Zijin Mining, Hengrui Pharmaceutical, CITIC**, BYD and other core leading listed companies in various industries.
Data**: official website of China Securities Index Company, as of 202312.31）
Jiang Junyang, manager of the R&D and investment department of Huabao ** index, said that the CSI A50 Index adopts scientific and reasonable compilation rules, takes into account the characteristics of the industry representativeness and market capitalization of constituent stocks, innovatively introduces the concept of ESG sustainable investment, and selects 50 ** companies with the largest market value in various industries as index samples, which is expected to become one of the important broad-based indices that characterize the core assets of A-shares.
CSI A50 Index: A new model of "Beautiful 50" in A-shares
The constituent stocks of the CSI A50 Index have always been the core assets of domestic institutional investors such as public offerings**, as well as foreign institutional investors represented by northbound funds. Among them, northbound funds have continued to increase their positions in the constituent stocks of the CSI A50 Index since its opening, according to wind data statistics, as of 202312.31. The market value of the constituent stocks of the CSI A50 Index held by northbound funds reached 804.6 billion yuan, accounting for 402%。
In addition, the CSI A50 Index has a relatively high proportion of new economy sectors, and the profitability and growth ability of the index constituent stocks are strong. According to wind data statistics, as of 20239.30, the median return on equity of the constituent stocks of the CSI A50 Index is 1483%, and the median net profit growth rate was 653%, which is higher than mainstream broad-based indices such as SSE 50 and CSI 300.
Comparison of major broad-based index constituents
Data**: Wind, dated as of 20239.30）
According to wind data statistics, since the index base date 201412.31 since 202312.31, the cumulative increase of the CSI A50 index is 3569% with an annualized return of 355%, which is better than the broad-based indices such as SSI 50 and CSI 300 in the same period, and also better than similar indices such as MSCI China A50 Connect Index and FTSE China A50, while the volatility of CSI A50 is small and the Sharpe ratio is higher, reflecting a better risk-return ratio.
Comparison of risk-return characteristics of CSI A50 Index and major indexes
Data**: wind, statistical period: 201412.31-2023.12.31）
A-shares have been adjusted for more than two years, as of 202312.31. The median PE of the constituent stocks of the CSI A50 Index has fallen back to a historical low, and the latest valuation level of the index is 1465 times, the latest median valuation of the constituent stocks is only 1846 times, medium and long-term configuration cost-effective.
Jiang Junyang said that from the perspective of index positioning, the CSI A50 Index more effectively reflects the transformation and upgrading of China's macroeconomic industry and the trend of high-quality development. From the perspective of the industry distribution of the index constituent stocks, the distribution of various industries is more balanced, which is in line with the characteristics of the leading enterprises in each industry. From the perspective of the style portrait of the index, the CSI A50 Index has the characteristics of large market capitalization and high profitability. From the perspective of the historical valuation quantile of the index, its valuation level is also at a historically low level, and the cost performance of medium and long-term investment is highlighted.
Huabao**: ETF product line has been upgraded again
With the launch of the CSI A50 Index, the core broad-based product line of "Huabao**", a leading domestic ETF investment institution, has been further expanded. In 2022, Huabao** has been deployed early on the CSI 100 Index of the same sect and has achieved a leading position.
According to statistics from the Shanghai and Shenzhen Stock Exchanges, by the end of 2023, the share of CSI 100 ETF** (562000)** under Huabao** reached 104.4 billion shares, a new high since the listing, the scale has also risen to 85.1 billion yuan, its average daily turnover in the market in the past year is 48.54 million yuan, among the 10 ETFs tracking the CSI 100 index in the whole market, the CSI 100 ETF (562000) under Huabao** is not only the largest, but also the best liquidity in the same period.
Since 2021, Huabao** has won the "Gold** Passive Investment ** Management Company Award" selected by Shanghai ** News for three consecutive years. In 2019, 2020 and 2021, Huabao** was awarded the "Top 10 ETF Managers" by the Shanghai ** Exchange for three consecutive years.
According to the latest release of the "Shanghai *** Manager Floor Non-stock ETF Scale List (Q4 2023)", as of December 31, 2023, Huabao** was 651The scale of non-stock ETFs of 9.7 billion yuan is among the top 10 non-stock ETF managers in China. At present, the Huabao ** index product line has fully covered broad-based index**, ETF, smart beta index products, and the company has emerged a series of flagship ETF products with distinctive characteristics, which have attracted the attention of the market and investors, and have abundant market transactions, such as S&P dividend ETF, CSI 100 ETF**, medical ETF, brokerage ETF, bank ETF, technology ETF, Hong Kong stock Internet ETF, chemical ETF, real estate ETF, national defense and military ETF, etc.
From the perspective of current investment opportunities, Jiang Junyang believes that the medium and long-term allocation value of the CSI A50 Index is gradually highlighted. First, with the continuous development of macro policies, China's economy is expected to stabilize and rebound, and the profit expectations of listed companies have also ushered in an improving trend. The optimization of the industry competition pattern will also help the competitiveness of leading enterprises to improve, and the profitability advantage of A-share leading assets is expected to be highlighted, thereby driving the market and high-quality assets to stabilize and rise; Second, under the guidance of China's economic transformation and high-quality development policies, the CSI A50 Index will help investors tap new growth points of China's economy by virtue of its reasonable stock selection methods, or become an important target for domestic and foreign capital allocation. Third, after the A-share market has undergone early adjustments, the valuation of leading companies in various industries has been at a historically low level, and combined with the subsequent improvement of the profitability of listed companies, the medium and long-term allocation value of the CSI A50 Index has become more and more obvious.
This time, the approved CSI A50 Index ETF of Huabao** is planned to be listed and traded on the Shenzhen ** Exchange, and the subsequent issuance and listing of the ETF** is worth paying attention to, which will provide investors with an investment tool to share the future growth of China's economy.
Risk Warning: The base date of CSI A50 Index is 201412.31, release date 20241.2；The underlying index of CSI 100 ETF** is the CSI 100 Index, which has a base date of 200512.30, release date 20065.29. The composition of the index constituents shall be adjusted in accordance with the rules for the compilation of the index. The index constituents in this article are for display only, and the description is not intended as investment advice of any kind, nor does it represent any ** position information and trading trends of the manager. **The CSI 100 ETF** risk rating assessed by the Manager is R3-Medium Risk, which is suitable for investors with an appropriateness rating of C3 or above. Any information appearing in this article (including but not limited to, comments, charts, indicators, theories, any form of expression, etc.) is for reference only, and investors shall be responsible for any investment behavior determined independently. In addition, any opinions, analysis and ** in this article do not constitute any form of investment advice to the reader, nor do they assume any responsibility for direct or indirect losses caused by the use of the content of this article. **Investment is risky, ** past performance is not indicative of its future performance, ** other ** performance managed by the Manager does not constitute a guarantee of ** performance, ** investment should be cautious. （cis）