Shanghai Securities News | REITs Index Investing Sets Sail: First Batch of REITs Index Funds Formally Filed
Shanghai Securities News China Securities Network News (Reporter He Xinyi) - On May 18, the official website of the China Securities Regulatory Commission (CSRC) showed that four REITs index fund products have been formally filed, marking the official launch of REITs index investing. This filing represents a significant innovation in the REITs investment product system, signaling the deepening of China's REITs market from asset listings toward index-based investing. It is of great significance for introducing stable incremental capital into the REITs market, enhancing investment convenience, improving market pricing transparency and efficiency, and promoting the high-quality development of the REITs market.
Policy Implementation Resonates, Market Eager to Taste the "First Soup"
At the end of December 2025, the CSRC issued the Notice on Promoting the High-Quality Development of the Real Estate Investment Trusts (REITs) Market, explicitly calling for accelerating the construction of the REITs market system, enriching the index system covering REITs, supporting fund managers in developing index-linked fund products, and further enriching investors' asset allocation options. Less than six months have passed from the issuance of this notice to the formal filing of the first batch of index funds, demonstrating a swift market response and fully reflecting the deep consensus and urgent demand among market participants for introducing incremental capital and enriching the REITs product system.
All four products filed this time are over-the-counter (OTC) index funds. The fund companies participating in the first batch of filings include China Asset Management, CICC Fund, E Fund, and China Southern Asset Management, all of which possess mature experience in both REITs and fund management. The products track the CSI REITs Total Return Index. To date, the index selects 53 listed REITs that meet liquidity and listing time requirements as its sample, representing a market value of approximately RMB 169.5 billion based on May 15 closing prices, covering 65.43% of the total number of REITs and 77.23% of the total market value, respectively. The index dynamically manages the weights of the sample bonds on a regular basis, ensuring the index's representativeness and investability. Notably, the CSI REITs Total Return Index incorporates sample dividends into the index return, fully reflecting the true return performance of listed REITs after including dividends.
Industry insiders state that in recent years, driven by both policy support and market demand, REITs have become an important vehicle for revitalizing existing assets and serving the real economy. Market pricing mechanisms are increasingly mature, the investor structure continues to optimize, and long-term investment value is gradually emerging. There is a clear consensus and strong demand among various market participants for the launch of REITs index fund products. Standing at a critical juncture where market scale and development quality are simultaneously improving, the launch of REITs index funds comes at exactly the right time.
In terms of market capacity, as of May 15, a total of 81 REITs have been listed on the market, with 9 completing follow-on offerings, achieving a total market value of RMB 219.5 billion. The assets cover a diverse range of mature property types, and the market continues to accelerate its expansion. In terms of liquidity, the average daily trading volume in 2025 reached nearly RMB 600 million, providing a liquidity foundation for index investing. Looking at the performance of listed REITs, the average performance achievement rate for the full year 2025 was 98%, with cumulative dividends reaching RMB 7.8 billion.
A relevant business head from China Asset Management introduced that the CSI REITs Total Return Index has been operating smoothly overall since its launch. It is currently in a favorable allocation range characterized by gradual stabilization and high dividends, with distinctive long-term return features significantly higher than comparable treasury yields, possessing value for index product development.
Developing REITs index funds is also an international best practice. Looking at mature markets such as the United States, relying on a sound institutional system to promote steady market expansion, the next step is to launch REITs indices, followed by the issuance of REITs index funds and other investment products, achieving a comprehensive upgrade from single-asset trading to index-based, large-scale, and inclusive investing.
Introducing Long-Term Incremental Capital to Promote Stability in the REITs Market
Long-term capital serves as the "ballast stone" for the healthy development of the REITs market. As a core tool for investors to allocate to REITs, REITs index funds play an important role in broadening funding sources for the REITs market and enhancing market stability.
The reporter learned that currently, the main allocators of capital in China's REITs market are primarily proprietary traders of securities firms and insurance institutions. According to the 2025 REITs annual report data, the combined market value of the circulating shares of 2025 REITs held by securities firm proprietary traders and insurance institutions accounted for more than half of the total. The market currently lacks index-based investment tools, and the demand for allocation on the capital side has yet to be further unleashed.
In terms of broadening long-term funding sources, REITs index funds offer prominent advantages such as diversified investment, standardized and transparent operation, and low transaction costs. They are conducive to enriching the supply of stable investment products in the market, improving the efficiency of capital allocation, reducing investor management costs and the research costs of individual securities, effectively diversifying investment risks, and meeting long-term allocation needs. They serve as an important channel for attracting long-term capital to position itself in the REITs market.
In terms of enhancing market operational stability, REITs index funds introduce long-term capital to effectively absorb market supply, which helps to increase trading activity in the REITs market, reduce irrational trading, moderate short-term market volatility, and improve market stability. At the same time, the continuous and stable subscription, redemption, and trading of index products help to enhance the overall liquidity of the REITs market, increase trading activity, and enable market prices of REITs to more accurately reflect the intrinsic value and industry fundamentals of the underlying assets, thereby fostering a more rational, efficient, and mature pricing mechanism.
"Taking the U.S. REITs market as an example, REITs and index funds are deeply integrated, driving insurance funds, pension funds, and other long-term capital to gradually become the main allocators. The market enjoys ample liquidity and a mature valuation system, making it a typical representative of a mature market," a relevant business head from CICC Fund told the reporter.
REITs index funds, similar to other ordinary public fund products, provide ordinary investors seeking stable returns and long-term appreciation with a standardized product featuring low volatility, high dividends, and inflation-hedging characteristics.
This product significantly lowers the threshold for ordinary investors to engage in professional investing. The underlying assets of REITs cover a variety of property types with differing operational performance. Faced with an increasingly diverse range of REITs products on the market, it is often difficult for ordinary investors to evaluate the quality and cash flow stability of each product individually. Index products provide ordinary investors with a "convenient channel" for one-stop allocation to high-quality REITs products across the entire market, achieving diversified allocation across different industries, regions, and asset types, effectively reducing the volatility risk associated with holding a single product and eliminating the complexity of product selection.
At the same time, as an over-the-counter (OTC) open-end fund, the product enhances investment convenience. Ordinary investors can easily participate in REITs investments by subscribing and redeeming fund shares through multiple OTC distribution channels, thereby further improving their sense of investment returns.
Industry insiders say that REITs index investing is an important part of building a complete REITs ecosystem. The launch of the first batch of REITs index funds fills a key gap in index-based investing in China's REITs market, further enriches the market's product landscape, and accelerates the transition of the market from being driven solely by individual products to a new stage of coordinated development centered on indexation, toolification, and systematization, laying a solid foundation for the stable, healthy, and sustainable development of China's REITs market.
They noted that the continuous enrichment and expansion of innovative products such as REITs index funds will not only continuously channel and build momentum for the REITs market, consolidating the foundation for market development, but also better serve the development of the real economy. Moreover, it will enable ordinary investors to share in the development dividends of the real estate sector, comprehensively establishing a virtuous development pattern characterized by smooth financing, effective support for the real economy, and broad-based participation and shared benefits.