YICAI｜The First Batch of Sci-Tech Innovation Bond ETFs Approved, with Net Inflows of RMB 172 Billion in Bond ETFs in the First Half of 2025

Translated from Yicai

Author: Huang Siyu | Editor: Yang Jiao

On July 2, the first batch of sci-tech innovation bond ETFs has been approved.

Six approved sci-tech innovation bond ETFs launched by E Fund, GF Fund, China Asset Management, Penghua Fund, Bosera Funds, and China Merchants Fund, have been officially listed on the Shanghai Stock Exchange (SSE). These ETFs include three products tracking the CSI AAA Sci-Tech Innovation Corporate Bond Index and another three tracking the SSE AAA Sci-Tech Innovation Corporate Bond Index.

From the perspective of the industry, the launch of the sci-tech innovation bond ETFs holds significant strategic importance. On one hand, it will fill the gap in public funds for "fintech" bond funds. On the other hand, ETFs are characterized by low transaction costs and high liquidity. The sci-tech innovation bond ETFs, with their highly focused investment theme design, attract a wide array of funds to precisely target key areas of sci-tech innovation, thereby broadening financing channels for sci-tech enterprises, reducing financing costs, and improving financing efficiency. In addition, the sci-tech innovation bond ETFs align with the allocation needs of medium- and long-term funds and will effectively implement policies that guide the entry of medium- and long-term funds into the market.

The six sci-tech innovation bond ETFs listed on the SSE track the CSI AAA Sci-Tech Innovation Corporate Bond Index and the SSE AAA Sci-Tech Innovation Corporate Bond Index, both of which were launched by the China Securities Index Co., Ltd. in August 2023. Both indices have state-owned enterprise bonds accounting for 99% of their composition, with the bond issuers rated AAA, ensuring low credit risk. The trading volumes over the past year were RMB 1.0366 trillion and RMB 876.4 billion, respectively.

"With strong policy support, the supply of sci-tech innovation bonds will keep growing, the space of index products is expected to continue expanding, and the liquidity will steadily improve," said an industry insider.

Bond ETFs, as a category of low-risk and stable-return products traded on the market, play a crucial role in index-based investments. In the first half of 2025, the total net inflow into ETFs across the market reached RMB 297.4 billion, with bond ETFs accounting for RMB 172 billion. Notably, all 9 bond ETFs saw net inflows of over RMB 10 billion each.

Currently, the SSE hosts 20 bond ETF products, with a total market size exceeding RMB 320 billion, doubling in size since the beginning of this year.

Looking ahead, the SSE has stated that it will continue to expand the supply of indices and products, optimize the ETF market ecosystem, and refine market mechanisms to attract and retain various funds within the market, while continuously enhancing investors' sense of accomplishment.