Is the "Trillion Dollar Club" shrinking and then expanding again? Is the ETF market switching styles?

Since the beginning of this year, China’s ETF market size peaked at 6.28 trillion yuan in January. Within less than two months, it shrank by nearly one trillion yuan, falling to 5.30 trillion yuan. Meanwhile, market trends have become polarized: five broad-based ETFs in the “100 Billion Club” shrank and fell out of the billion-yuan range, while Hu’an Gold ETF defied the trend and surpassed 100 billion yuan, becoming the first commodity ETF to reach that scale. Is this “ice and fire” situation caused by capital leaving the market or reallocating?

Five broad-based ETFs fell out of the “100 Billion Club”

Looking back at the rapid growth of the ETF market in 2025, at the start of the year, there were 1,047 funds totaling 3.73 trillion yuan. By April, the market first surpassed 4 trillion yuan; in August, it exceeded 5 trillion; and by December, it broke 6 trillion. By year’s end, 1,402 funds totaled 6.02 trillion yuan. The ETF market crossed three trillion-yuan milestones within the year, with the number of funds and total scale increasing by 33.91% and 61.39%, respectively.

Entering 2026, the ETF market size continued to rise in early January, reaching a peak of 6.28 trillion yuan on January 12 with 1,405 funds. Afterwards, the market size declined steadily. According to iFinD data, as of March 8, the total market size was 5.30 trillion yuan across 1,446 funds, down 0.97 trillion yuan from the peak, a decrease of 15.49%.

Currently, the market sizes of stock ETFs, bond ETFs, and cross-border ETFs are 3.09 trillion yuan, 740 billion yuan, and 950 billion yuan, respectively, all shrinking from their January peak by varying degrees—down 990 billion yuan, 200 billion yuan, and 60 billion yuan. Conversely, commodity ETFs and currency ETFs grew by 90 billion yuan and 20 billion yuan.

Amid significant shrinkage in market size, the number of funds in the “100 Billion Club” has also decreased sharply. At the start of the year, all seven “100 Billion Club” funds were broad-based ETFs. Now, five have fallen below 100 billion yuan: Huaxia CSI 300 ETF (93.39 billion yuan), Harvest CSI 300 ETF (96.99 billion yuan), Huaxia SSE 50 ETF (73.01 billion yuan), Southern CSI 500 ETF (79.31 billion yuan), and E Fund ChiNext ETF (55.76 billion yuan).

Currently, only three ETFs exceed 100 billion yuan: Huatai-PineBridge CSI 300 ETF (208.33 billion yuan), E Fund CSI 300 ETF (143.63 billion yuan), and Hu’an Gold ETF (127.27 billion yuan). Among these, Huatai-PineBridge and E Fund’s sizes have decreased by 231.11 billion yuan and 167.25 billion yuan from their peaks this year.

The newly “100 Billion Club” member, Hu’an Gold ETF, had a size of 93.985 billion yuan at the end of last year. It first surpassed 100 billion yuan on January 14, reaching 100.76 billion yuan, and hit this year’s peak of 135.47 billion yuan on January 29. Due to fluctuations in international gold prices, its size once shrank sharply to 111.07 billion yuan but is now steadily recovering.

Top fund companies’ ETF management scales have also shrunk significantly. According to iFinD, since the start of the year, 38 fund companies saw declines in ETF management scale. Five firms—Huaxia Fund, E Fund, Huatai-PineBridge, Southern Fund, and Harvest Fund—each saw reductions exceeding 100 billion yuan. GF Fund and Fullgoal Fund experienced declines in the hundreds of millions. The remaining 31 firms’ scales shrank by less than 100 billion yuan.

As the first domestic ETF manager with over 10 trillion yuan in assets, Huaxia Fund’s ETF scale peaked at 10.2 trillion yuan on January 12. It has since declined to 7.291 trillion yuan, a reduction of about 2.875 trillion yuan from the peak.

Capital shifts to industry themes seeking safe havens

As broad-based ETFs retreat, industry-themed ETFs are rising. According to iFinD, six institutions, including Guotai Fund, have increased ETF management scale by over 10 billion yuan this year. Notably, Guotai Fund, Hu’an Fund, and Bosera Fund benefited from gold-themed ETFs, which attracted 33.29 billion, 17.47 billion, and 13.84 billion yuan respectively this year.

Beyond gold ETFs, the market has seen strong inflows into sectors like commercial aerospace, semiconductors, oil and petrochemicals, and non-ferrous metals. For example, ETFs linked to the CSI Chemical Industry Sub-Index, CSI Power Grid Equipment Index, and CSI Semiconductor Materials & Equipment Index have grown by 36.93 billion, 27.60 billion, and 19.61 billion yuan this year.

“Rapidly falling below 100 billion yuan for top broad-based products is a typical strategic capital shift, not a fundamental change in the market structure,” said Tian Lihui, Dean of the Financial Development Research Institute at Nankai University. He believes that although ETF market size fluctuations are large, they mainly reflect a market sentiment release. Under previous gains and geopolitical conflicts, capital has chosen to lock in profits.

Tian emphasizes that the overall pattern remains that leading fund companies still hold over 70% of the ETF market share. The “concentration effect” has not been broken. The current phenomenon indicates a style shift, with capital temporarily withdrawing from macro-correlated broad indices to seek more flexible structural opportunities—an active pursuit of certainty, not a rejection of broad-based ETFs.

“ETF size changes align with market dynamics. Currently, the main global issues are rising oil prices due to Middle East tensions and stock declines caused by stagflation fears from hyperinflation. This is reflected in China’s stock market as well—main indices fall, energy and commodities rise, which explains the overall shrinkage of ETF sizes and the inflow into energy and commodity ETFs,” said economist Pan Helin.

Will the trend of abandoning broad-based ETFs and chasing themes continue? Tian analyzes that the inflows into gold, oil, and non-ferrous metals ETFs reflect ongoing geopolitical conflicts and disruptions to global supply chains. Capital is seeking hard currencies to hedge risks and inflation expectations, actively embracing safety in specific macro environments.

He warns that ordinary investors should avoid chasing gains and selling in panic. For example, after recent sharp rises, some oil and gas funds have seen capital exit, making it risky to buy in at the top. Data from iFinD shows that the CSI Oil & Gas Industry Index, CSI Oil & Gas Resources Index, and China Securities Petroleum & Natural Gas Index declined for three consecutive trading days from March 4 to March 6, with several high-premium oil and gas ETFs also falling.

“Market excitement belongs to others; risks are your own. Longevity in the market is more important than quick gains,” Tian advises. He recommends a “core-satellite” strategy: using broad-based ETFs as the ballast for the portfolio to earn basic returns, and narrow ETFs to capture structural opportunities. Combining valuation metrics and deploying in sectors at historically low valuations can help smooth costs through regular investment.