Cross-Market ETF

Brief Introduction of Huatai-PineBridge CSI 300 Index ETF (1st Cross-Market ETF with T+0 Settlement Mechanisms)

Since being listed on May 28 of 2012, Huatai-PineBridge CSI300 Index ETF (510300.SH) has been showing an outstanding performance. With no doubt, it has turned into the flagship ETF of A-Share market within 6 months.

1.Most Liquid ETF in A-Share Market

As of Dec 31, the average daily trading volume of 510300 reached 0.693 billion RMB. Further observation shows that 510300 has been traded consistently above 1 billion RMB since Dec of 2012 with the peak volume hitting over 2 billion. Moreover, the average daily turnover rate of 510300 registers 3.21%, which is over twice its rival's.

Statistics of monthly trading volumes confirm that the trading activeness of 510300 has been increasing on a steady basis. In fact, its latest daily average trading volume on monthly basis exceeds 1 billion RMB, more than doubled that of its initial stage.

Chart1: Average Daily Trading Volume on a Monthly Basis (510300 vs. 159919)

Data Source: Wind; Huatai-Pinebridge Fund;
Data as of Dec 31, 2012.

2.Moderate Premium/Discount Rate

Thanks to the unique settlement design and consequently efficient arbitrage mechanisms, the premium/discount rate of 510300 floats around +/-0.05% as of the end of 2012, which is quite close to those of its single-market peers. Meanwhile, it beats its cross-market rival, 159919, with obvious advantage.

Chart 2: Premium/Discount Rate (510300 vs. Cross-Market and Single-Market Peers)

  510300 159919 510050 510180 159901
Average -0.07% -0.17% -0.06% -0.05% -0.01%
Median -0.08% -0.16% -0.06% 0.00% 0.00%
Max. 0.34% 0.54% 0.32% 0.38% 0.52%
Min. -0.42% -0.59% -0.37% -0.40% -0.36%
Data Source: Wind; Huatai-Pinebridge Fund;
Data as of Dec 31, 2012;
Note: Premium/Discount rate is calculated using closing price and closing NAV.

3.Excellent Tracking Performance

510300 has been closely tracking the underlying index. Both its daily tracking difference and annualized tracing error have been well controlled. Chart 3: Tracking Performance of 510300

 

510300

Average Daily Tracking Difference

0.0231%

Annualized Tracking Error

0.5314%
Data Source: Wind; Huatai-Pinebridge Fund;
Data as of May 28, 2012 till Dec 31, 2012;
Calculation based on Public Data.

4、Major Player in the Margin Trading & Securities Lending Scheme

510300 made its name among the first batch of approved underlying securities of margin trading & securities lending scheme in June, 2012. It turns into an undisputable major player of this burgeoning market soon afterwards.

Till now, it already occupies more than half of the market share in terms of daily trading amount as well as accumulated balance, as is shown in the following chart.

Chart 4: Margin Trading & Securities Lending Statistics (510300 vs. 159919)

  Margin Trading
Amount
Securities Lengding
Amount
Marging Trading
Balance (1)
Securities Lending
Balance (2)
(1)+(2)
510300 80.77 243.99 20.80 1.89 22.69
As % of all ETFs 47% 74% 66% 37% 62%
159919 5.27 3.70 0.70 0.32 1.02
As % of all ETFs 3% 1% 2% 6% 3%
Data Source: Wind; Huatai-Pinebridge Fund;
Data as of June 4, 2012 till Dec 31, 2012;
Unit: 100 Million RMB;

Securities Lending Amount is calculated based on the average daily trading price.

As the most liquid trading vehicle of the flagship index of China's A-Share market, Huatai-PineBridge CSI 300 Index ETF (510300) has been traded with high efficiency and has been performing steadily with various typical indicators much better than expected.

We expect to see that with developing innovations and further diversified investment strategies in the A-Share Market, 510300 will be increasingly widely used as the first choice by a variety of both institutional and retail investors, which in turn will contribute positively to its liquidity.