| Index Investment Gains Favor, Broad-based Index Products Continually Grow in Scale

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Shanghai Securities News and (Reporter Lin Cong): This year, the scale of broad-based index products has continued to grow, attracting ongoing capital inflows and becoming an important tool for incremental capital to invest in A shares. As of now, the total scale of domestic ETFs has exceeded RMB 2 trillion yuan, with a cumulative net inflow of RMB 432 billion yuan this year. In particular, broad-based index products accounted for more than half of this with a net inflow of RMB 219.3 billion yuan.

Recently, the STAR 100 Index products have garnered widespread attention in the market. Launched less than two months ago, their scale has already doubled. The first four STAR 100 ETFs, established in September, raised RMB 7 billion yuan. After listing, they continued to attract net inflows of funds, with the most recent product scale exceeding RMB 14 billion yuan, more than double the initial scale. The second batch of three STAR 100 ETFs also raised RMB 5.5 billion yuan. Experts indicate that the continuous growth of the first batch of STAR 100 ETFs and the successful issuance of the second batch demonstrate investors' recognition of the investment value of the STAR Market and the investment advantages of broad-based index products.

Broad-based indexes gain a large number of investors' favor due to their wide investment scope, ability to diversify risks, and capture average market returns through tracking overall market performance. Notable broad-based indexes include the STAR 50 and CSI 300, which have attracted net inflows of RMB 71.8 billion yuan and RMB 105.4 billion yuan respectively this year, with product tracking scales reaching RMB 145.5 billion yuan and RMB 383.5 billion yuan, an increase of 74% and 32% since the beginning of the year.

In addition, the CSI 2000 Index, which reflects the securities of listed companies with smaller market value in the Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE) and was released this year, continues to maintain a high level of product development. The first batch of ETFs raised RMB 5.4 billion yuan, five enhanced ETFs have been approved, and several other companies have expressed a strong desire to develop products.

Market insiders point out that while meeting the wealth management needs of residents, ETFs integrate market resources, help more excellent companies to broaden financing channels, effectively serve the real economy, and provide inexhaustible impetus for promoting high-quality development of the capital market and achieving Chinese modernization.

Recently, the China Securities Index Co., Ltd. held a salon in Shanghai on core broad-based index series, where representatives exchanged views on index investment, product innovation, and market ecology.

Market insiders said that referring to the rapid growth of passive index investment in overseas markets over the past decade, the domestic ETF market has huge development potential. Index investment has advantages such as high transparency, low cost, and large investment capacity. At present, the domestic ETF market is in a stage of rapid development, with a cumulative growth of over 140% in the past three and a half years and an overall management scale exceeding RMB 2 trillion yuan. However, compared with overseas markets, the share of domestic index products in the total management scale of mutual funds remains low in relation to the proportion of index sample market value, indicating substantial development potential. Furthermore, in terms of flagship products, the global product scale of the S&P 500 Index is about 5.7 trillion U.S. dollars, with the product scale accounting for approximately 14% of the total market capitalization of its index components. In contrast, the scale of domestic products indexed to the CSI 300 is only RMB 325.7 billion yuan. Currently, the total market value of the CSI 300 Index sample is RMB 39 trillion yuan, of which index products account for less than 1%, hinting at significant room for the growth of CSI 300 index products.