In the past two years, due to the poor performance of A** and equity**, most investors have been experiencing the pain of shrinking net asset value. In the fourth quarter of 2023, many equity** redemptions occurred, and the issuance in January 2024 was not ideal, and the issuance results of 10 A50 ETFs can reflect the level of market expectations and investors' trust in the strength of the public offering to a certain extent.
Yi Qiangwen. From February 19th to March 1st, 10 A50 ETFs will be issued simultaneously, with a maximum fundraising limit of 2 billion yuan, and the underlying index of this ETF is the CSI A50 Index.
According to the information on the official website of China Securities Index Company, the release time of the above index is January 2, 2024. According to the information on the official website of the China Securities Regulatory Commission, it was on January 2 that 10 ** companies, including E Fund, Wells Fargo, Harvest, and Huatai Berry, applied for A50 ETFs at the same time, and were approved at the same time a month later (February 2).
Since A-shares have not yet completely come out of the shadow of adjustment, and the performance of equity ** is generally poor, the issuance of this ETF is considered to be a test, and the results will reflect to some extent the level of market expectations and investors' trust in the strength of public investment and research.
According to the data of Oriental Wealth Choice, as of the end of the fourth quarter of 2023, the total share size of the equity class (including ** and hybrid type) in the whole market was 6,106.1 billion, an increase of only 2.9 billion shares from the previous quarter, and if the shares of ** ETF and cross-border ETF were deducted, it would shrink by 131 billion shares. Among the 6,217 equity classes** established before October 1, 2023, 4,523 have shrunk in varying degrees of share size during the same period, and 1,215 have shrunk by more than 10%.
Since 2024, the issuance of equity ** has been even less satisfactory, with a total issuance of only 11.5 billion shares in January, less than half of the average monthly issuance size in the past three years (2021 to 2023) and the lowest since October 2018.
In the same month, the total number of bond** issuances in the market totaled 56.2 billion, the lowest level since August 2023.
Issuance and subscription suspense
Let's go back to the A50 ETF first.
Judging from the "Offering Announcement" of 10 products, the subscription rate is exactly the same, that is, if the subscription share is less than 500,000 shares, the subscription rate is 080%；If the subscription share is between 500,000 and 1 million shares, the subscription rate is 050%；If the subscription share reaches 1 million shares or more, the subscription fee is 1,000 yuan. This subscription fee is a common standard for broad-based ETFs.
The management fee is 015% is the minimum standard for **ETF (excluding cross-border ETFs, the same below). Judging from the 775 ** ETFs that have been established, their management fees are mainly as follows: 80% and 1% work 11 gears. Among them, the last four tiers mainly refer to the standard of additional ETFs (only 13 ETFs in total). The management fee is 050% of the ETF accounts for 80% of the ETF, which is 0Only 93 of the 15% are 12%.
The same rate means that 10 ** companies, including E Fund, Wells Fargo, Harvest, Huatai Pineberry, ICBC Credit Suisse, Yinhua, Dacheng, Huabao, Ping An and J.P. Morgan Asset Management (China), will compete on their own merits.
As of February 8, the total net asset value of the above 10 companies' equity ** (excluding ETF connection**) was 179 trillion yuan, accounting for the net asset value of the whole market's equity ** (6.).14 trillion yuan) of 2915%。Among them, E Fund, Fuguo and Harvest ranked the top three, with 542.2 billion yuan, 291 billion yuan and 229.7 billion yuan respectively, accounting for respectively. 74% and 374%。
*In terms of ETFs, as of February 8, the total market share size was 152 trillion shares, with a total net asset value of 170 trillion yuan. In the same period, the total share size of the above 10 companies was 641.9 billion shares, and the total net asset value was 771.7 billion yuan, accounting for 4225% and 4535%。Among them, E Fund, Huatai Berry and Harvest** ranked the top three, with 273.8 billion yuan, 228.3 billion yuan and 121.6 billion yuan respectively, accounting for respectively. 42% and 715%。
Judging from historical data, among the above 10 companies, E Fund has the fastest growth rate in the past three years (as of February 19), with the fastest growth rate of **ETF shares, from 26.5 billion shares at the beginning of 2021 to 270.1 billion shares, an increase of 921 times; This was followed by rich countries**, which increased by 4 percent from 9.4 billion to 55.5 billion88 times; Harvest ranked third, with an increase of 4 percent from 9.7 billion to 54.5 billion61 times.
From the perspective of holder structure, the proportion of shares held by institutional investors has increased, from 4027% rose to 44 at the end of the first half of 202344%, an increase of 417 percentage points.
However, the opposite is true for ETFs whose underlying indices are the CSI 300 and SSE 50 broad-based indices. According to the data, at the end of 2020, institutional investors held 70% of the shares of CSI 300 ETF and SSE 50 ETF respectively63% and 7561%, which has dropped to 61 by the end of the first half of 202316% and 6483%。
As the A50 Index is similar in nature to the two broad-based indices mentioned above, it is worth paying attention to how many offer shares institutional investors will subscribe.
Judging from the holder structure of the ** ETFs of the above 10 issuing companies, as of the end of the first half of 2023, the proportion of shares held by institutional investors is 3633% to 8652%。Among them, the highest proportion of institutions is J.P. Morgan Asset Management (China) Co., Ltd. (86.).52%), and the lowest was ICBC Credit Suisse (36.).33%), and the top three ETFs in terms of ETF size are E Fund, Wells Fargo and Harvest**. 17% and 5798%。
What are the characteristics of the A50 Index?
Back to the A50 index itself.
For this index, the above 10 companies and ** have different positions, some are called the "Beautiful 50" index, and some are called "China's core assets", "mainstream core assets", "subdivision industry leaders" and "core asset leaders".
According to the press release and the "Preparation Plan" issued by China Securities Index Company, the index focuses on "industry leaders", takes CSI** industry leading listed companies** as the sample to be selected, and then selects 50** as index samples according to the free float market capitalization from high to low, and maintains at least 1 single secondary industry to be selected. The index sample is adjusted semi-annually (June and December).
The press release of China Securities Index Company specifically mentioned that in the context of macroeconomic industrial transformation and upgrading, this index can "help the reform of the investment side and serve the medium and long-term capital allocation needs".
In other words, China Securities Index Company believes that institutional investors who hold medium and long-term funds such as social security** and insurance funds will be the main force in allocating related assets. "Since 2023, with the release of various policies to guide the entry of medium and long-term funds such as social security and insurance into the market such as the Measures for the Administration of Domestic Investment in the National Social Security ** (Draft for Comments)", the scale of domestic indexed investment is expected to further increase. ”
From the perspective of the distribution of sample industries, the A50 index covers 30 CSI secondary industries and 50 CSI ** industries, "while maintaining the attribute of 'large market capitalization', more leading companies in the new economy field are included, so as to facilitate investors to 'one-click allocation' of the most representative high-quality leading enterprises in various industries." ”
According to the data of Oriental Wealth Choice, the CSI A50 Index covers 27 of the 31 Shenwan primary industries and 46 of the 124 Shenwan secondary industries.
In terms of industry weights, among the 27 Shenwan first-class constituent industries, the top five are food and beverage, non-bank finance, medicine and biology, power equipment and banks, with weights respectively. 73% and 614% out of a total of 4861%。Among the 46 Shenwan secondary component industries, the top five are liquor, insurance, batteries, joint-stock banks and white goods, with weights respectively. 14% and 463% out of a total of 3402% (as of February 19).
The CSI 300 Index covers 29 Shenwan primary industries and 81 Shenwan secondary industries. Among the first-level constituent industries, the top five weights are banking, food and beverage, non-bank finance, power equipment and electronics, respectively. 86% and 761% out of a total of 5045%。Among the secondary constituent industries, the top five weights are liquor, joint-stock banks, ** semiconductors and large state-owned banks, respectively. 06% and 405%, a total of 3033%。
The SSE 50 Index covers 21 Shenwan primary industries and 32 Shenwan secondary industries. In terms of primary constituent industries, the top five weighted industries are the same as those of the A50 Index, and they are also food and beverage, banking, non-bank finance, power equipment, and pharmaceutical and biological industries, but the weights are quite different. 81% and 546% out of a total of 6137%。In terms of secondary component industries, the top five weighted industries are liquor, joint-stock banks, insurance, large state-owned banks and power industry, respectively. 39% and 487% out of a total of 4806%。
On the whole, the SSE 50 Index has the strongest financial attributes, followed by the CSI 300, and the CSI A50 is more balanced.
In terms of constituent stocks, the CSI 300 covers 49 of the A50 constituent stocks except Proya (which belongs to the beauty care industry), and covers all the constituent stocks of the SSE 50.
The level of foreign capital and public offering
Let's take a look at the allocation of northbound funds and public offerings** to the constituent stocks of the A50 index.
As of February 19, Northbound Capital held all 50 constituent stocks of the A50 Index, with a total market value of 801 billion yuan, an increase of 1 from the beginning of the year29%, but the shareholding in the A50 index has increased from 6 at the beginning of the year86% to 676%, down 010 percentage points. During the same period, the value of a** held by northbound funds increased from 1 at the beginning of the year97 trillion yuan fell to 196 trillion yuan, down 039%。
Among the first-level constituent industries of the A50 index, northbound funds mainly increased their allocation to building decoration, electronics, social services, household appliances and national defense and military industries, and the shareholding ratios as of February 19 were respectively. 81% and 195%, an increase of 062, 047, 037, 033 and 028 percentage points. The component industries that have been reduced are mainly media, beauty care, machinery and equipment, non-ferrous metals, pharmaceutical and biological, and trade and retail industries, and their shareholding ratios decreased by 2 percent respectively from the beginning of the year55, 156, 097, 057, 047 and 047 percentage points.
Among the constituent stocks of the A50 Index, the five constituent stocks with the heaviest market value held by northbound funds are Kweichow Moutai, Midea Group, CATL, Yangtze Power and Mindray Medical, with 149.6 billion yuan, 82 billion yuan, 66.2 billion yuan, 45.9 billion yuan and 42.5 billion yuan respectively. The five constituent stocks with the highest shareholding ratio are Inovance Technology, Fuyao Glass, Midea Group, Proya and Guodian NARI, respectively. 53% and 1670% (as of Feb. 19).
In terms of public offerings (excluding QDII, the same below), at the end of the fourth quarter of 2023, all the constituent stocks of the A50 Index were heavily held, with a total market value of 766.8 billion yuan, down 796%, which fell in the same period as the A50 index (-7.).98%). During the same period, the A-share assets held in the public offering (256 trillion yuan), the A50 index accounted for 2998%, down 068 percentage points.
During the same period, the A50 index accounted for 1796% to 1717%, down 079 percentage points. In other words, although the market value of A50 assets held by public heavy positions has declined, the overweight of the A50 index has increased from 1270 percentage points to 1281 percentage points.
Among the 27 primary constituent industries covered by the A50 Index, the five industries with the heaviest public offering** allocation are pharmaceutical and biotechnology, food and beverage, power equipment, electronics and non-ferrous metals, which account for the weights of A50 assets held by public offering heavy positions at the end of the fourth quarter of 2023. 84% and 572% out of a total of 6508%。Among them, the weight of the power equipment industry decreased by 2 month-on-month20 percentage points, pharmaceutical biology, non-ferrous metals, electronics and food and beverage increased by 1 month-on-month respectively41, 140, 124 and 094 percentage points.
As of the end of the fourth quarter of 2023, among the constituent stocks of the A50 Index, the top five public offering heavy positions in terms of market capitalization are Kweichow Moutai, CATL, Mindray Medical, Hengrui Pharmaceutical, and WuXi AppTec.
Public offering litmus stones
Back to A50ETF.
Judging from the "Offering Announcement", the fundraising ceiling of the 10 A50 ETFs is 2 billion yuan, totaling 20 billion yuan. If the upper limit raises sufficient funds and all **, the shareholding ratio will be about 017%。
However, due to the poor performance of A-shares and equity** in the past two years, it is still difficult to predict the outcome of the fundraising.
According to the data of Oriental Wealth Choice, in the past two years (as of February 19), the Shanghai Composite Index and the Shenzhen Component Index have each increased by 1662% and 3386%。During the same period, among the 5,057 equity classes established before 2022, 3,363 had a net value growth rate of less than -20%, 2,016 had a net value growth rate of less than -30%, and 690 had a net value growth rate of less than -40%, accounting for respectively. 87% and 1364%；A further 114 are below -50% and 6 below -60%.
The data also shows that in 2022 and 2023, the above-mentioned 5,057** will create income for holders of -147 trillion yuan and -729.4 billion yuan, totaling -220 trillion yuan.
As a result, the issuance of equity** is in trouble. In January 2024, the total issuance size of equity** was only 11.5 billion, the lowest level since October 2018, and only 15 of the average monthly issuance size (76.5 billion) in the past three years (2021 to 2023).03%。
Because of this, the issuance of A50 ETF is also considered to be a test, and its results can reflect the degree of trust of investors in A-shares and public offerings** to some extent.
The good news is that after a painful correction, valuations for A** markets, especially core assets, have become more attractive. As of February 19, the PE (TTM) of the CSI A50, CSI 300 and SSE 50 indices was 1516 times, 1127 times and 991 times. During the same period, the share size of **ETF increased by 150.8 billion shares from the beginning of the year, of which the share size of ETFs with underlying indices of CSI 300 and SSE 50 increased by 97.2 billion shares.
More importantly, the introduction of the concept of "investor-oriented" regulation and the implementation of "zero tolerance" enforcement have also given investors reason to place higher expectations on the market outlook.