Shanghai Securities News｜Shanghai Stock Exchange: Promoting the ETF Market to New Heights in Line with Enhancing the Coordination of Investment and Financing Functions in the Capital Market

Translated from Shanghai Securities News, www.cnstock.com

Shanghai Securities News, www.cnstock.com (Reporter: He Xinyi) -- On July 17, during the Sci-Tech Innovation Bond ETF Investment Seminar themed Climbing the Heights of Innovation in “Bonds” and Serving Technological Innovation, a relevant representative from the Shanghai Stock Exchange (SSE) stated that ETF has become a crucial tool for investor asset allocation, multi-tiered capital market system construction, and facilitating high-quality economic development. The SSE will, with a continuous focus on enhancing the capital market’s function in coordinating investment and financing, advance the ETF market to new heights by expanding products, improving mechanisms, and developing the ecosystem.

Currently, with the steady progress of the new “State Council’s Nine Guidelines” and the “1+N” capital market policy framework, domestic index-based investment has seen robust support from policies, heightened market participation, a continuously improving product ecosystem, and an accelerated inflow of long-term capital. This propels index-based investment into the fast lane of high-quality development.

According to SSE data, in 2024, the total size of domestic equity index funds reached RMB 3.96 trillion, surpassing the scale of active equity funds for the first time, which stood at RMB 3.44 trillion. Among this, the total size of stock ETFs exceeded RMB 2.9 trillion. In April 2025, the size of the domestic ETF market crossed the RMB 4 trillion mark for the first time, reaching RMB 4.3 trillion by the end of June.

A representative from the SSE stated that ETFs have become one of the important tools for investor asset allocation, building a multi-layered capital market system, and supporting high-quality economic development. With the concerted efforts of all parties, the ETF market in the SSE has entered a promising phase.

First is the strong growth trend of the SSE ETF market. The total market size has reached RMB 3.2 trillion, with stock ETFs exceeding RMB 2.2 trillion and bond ETFs surpassing RMB 330 billion. In the first half of 2025, the total net inflow into ETFs across the market reached RMB 290 billion, with RMB 170 billion directed to bond ETFs. Compared to the beginning of 2025, the size of bond ETFs in Shanghai market has already doubled, reaching six times the size of the beginning of 2024.

Second is the continuous expansion of the ETF product matrix in the SSE. Currently, the SSE’s ETF products cover a variety of assets, including stocks, bonds, commodities, currencies, and cross-border assets, making it easier for investors to achieve diversified portfolio allocation with a single click. “Since 2024, we have gradually launched several themed ETF products such as the CSI A500, Sci-Tech Innovation Composite Index, Benchmark Market-Making Bonds, and Free Cash Flow. These products have received an enthusiastic response in the market. In less than six months, four of the benchmark market-making bond ETFs listed on the SSE have already surpassed RMB 80 billion in total size,” the representative explained.

Third is the continuous growth in ETF investor numbers in the SSE. The number of ETF investors has reached nearly 10 million accounts. Institutional investors are deepening their strategic layout for index-based investments, with long-term capital such as banks, insurance companies, wealth management subsidiaries, and pension funds entering the market at an accelerated pace.

A representative from the SSE remarked that, as the new round of capital market reforms steadily progresses, the ETF market is entering an important period of development opportunities, with enormous growth potential in the future. Moving forward, the SSE will, with a continuous focus on enhancing the capital market’s function in coordinating investment and financing, advance the ETF market to new heights by expanding products, improving mechanisms, and developing the ecosystem.

In terms of product layout, the SSE will fully strengthen and optimize core broad-based stock ETFs, expand the range of STAR Market indices and ETF categories, and continue to guide capital towards hard-tech sectors while supporting the development of new quality productive forces. Additionally, the SSE will enrich the ETF product category for low-volatility and stable strategies, better meeting the asset allocation needs of various investors.

In terms of mechanism optimization, the SSE will further optimize the market maker mechanism and the after-hours fixed-price trading mechanism, promote ETF inclusion in the Fund Connect platform and within the scope of fund investment advisory configurations, and enrich the ETF options products.

In terms of ecosystem development, the SSE will collaborate with market participants to strengthen ETF promotion and investor education, jointly advocating for the “Three Investment” concept of “rational investment, value investment, and long-term investment”.