Retail investors are confused! Before the holiday, the major players dumped 24.4 billion yuan through ETFs, and even the strong telecommunications sector was also dumped.

This week’s stock index benchmarks saw broad-based declines. Total net outflows from China domestic equity ETFs and cross-border ETFs across the Shanghai and Shenzhen markets amounted to RMB 24.43B.

From an industry/theme perspective, ETFs related to gold, batteries, and other areas were favored by capital inflows, while ETFs related to communications and coal were sold off.

In the week before the holiday, over RMB 24 billion in funds routed through ETFs exited

In the week before the small holiday, trading value in the Shanghai and Shenzhen markets totaled RMB 94.1k. Of that, the Shanghai market recorded RMB 41.5k in trading value, and the Shenzhen market recorded RMB 52.6k. As of the latest close, the Shanghai Composite Index (SSE) closed at 3,880.1 points, down 0.86% for the week; the Shenzhen Component Index (SZCI) closed at 13,352.9 points, down 2.96% for the week.

Wind data shows that this week, total net outflows from China domestic equity ETFs and cross-border ETFs across the Shanghai and Shenzhen markets were RMB 24.43B. Broad-based index ETFs recorded net outflows of RMB 17.5 billion, and industry/theme ETFs recorded net outflows of RMB 9.68B.

Looking in more detail, based on the net subscription/redemption statistics for major broad-based index categories, this week the STAR 50 and the GEM Index saw net inflows, while the CSI A500 recorded net outflows of RMB 8B.

As for specific ETFs, among the 10 largest broad-based index ETFs by size, their combined net outflows this week were RMB 9.21B. Among them, the Huatai-PineBridge SSE 300 ETF, the Southern CSI 500 ETF, the Huaxia SSE 50 ETF, and the Huatai-PineBridge CSI A500 ETF all recorded net outflows exceeding RMB 1 billion.

Performance of ETFs tied to major indexes this week

One securities firm said short-term market trading activity may remain relatively lackluster, and at the index level the market may continue to trade in a range. Looking at the medium term, the market will most likely be dominated by wide-range consolidation, with the magnitude of volatility potentially increasing. Investors are advised to manage positions reasonably and wait for market-generated turning-point signals to appear.

Gold-sector ETFs draw in funds, while the hot communications-related ETFs get sold off

For industry/theme ETFs, there were 23 funds with net inflows exceeding RMB 100 million this week. Among them, the Yongying Gold Stock ETF, the 广发 Battery ETF, and the Tianhong Nonferrous Metals ETF added 406 million units, 400 million units, and 431 million units respectively; net inflow funding was RMB 919 million, RMB 442 million, and RMB 366 million respectively.

Regarding fund outflows, this week 44 industry/theme ETFs recorded net outflows exceeding RMB 100 million. Among them, the CSI Communications ETF (Guotai) reduced holdings by 2B units, the Guotai Coal ETF reduced holdings by 733 million units, and the Southern Real Estate ETF (units) reduced holdings by 573 million units. Their net outflow funding was RMB 1.16 billion, RMB 894 million, and RMB 771 million respectively.

It is worth noting that ahead of the holiday, gold-sector stocks were favored by incoming funds, and the relevant ETFs’ share holdings recovered slightly; communications, however, was sold off by funds.

Changes in fund shares of the Yongying Gold Stock ETF (517520)

One securities firm said the medium-term trend of gold prices still depends on factors related to U.S. dollar credit and liquidity. After this round of conflicts in the Middle East, it is expected that the continuation of two major trends—more abundant liquidity and weakening U.S. dollar credit—will continue to push up gold prices.

Changes in fund shares of the Guotai Communications ETF (515880)

Some analysts believe that the AI trend is now clear. Capital expenditures by cloud vendors both domestically and abroad are rising sharply. As the “shovel sellers” in the power/compute industry, the communications sector’s market scale is expected to continue growing.

19 ETFs had weekly trading values exceeding RMB 10 billion

This week, there were 19 ETFs with weekly trading values exceeding RMB 10 billion, including stock ETFs and cross-border ETFs. Among them, 广发 Hong Kong-listed innovative drug ETF, 华泰柏瑞 A500 ETF, 南方 A500 ETF, and 中证A500 ETF (Guotai) each had weekly trading values exceeding RMB 30 billion.

It is worth noting that multiple Hong Kong-listed related ETFs hit their lowest prices in 60 days this week.

One securities firm said the non-rational adjustment of the Hang Seng Tech Index in this round has already released short-term sentiment risk to a significant extent. Currently, it shows a fourfold “bottom” profile: oversold conditions and valuation troughs, funds accumulating in opposition to the trend, an improved fundamental outlook for the AI sector, and company share buybacks likely to be increased soon. Sector support is clear, and the attractiveness of allocations on a cost-effectiveness basis has improved significantly.

9 ETFs to be issued next week

Investors have long been focused on the heavily held stocks of funds, but for actively managed funds, their heavily held stocks tend to surface with some lag. However, the underlying assets for ETF allocations are very clear. By tracking newly listed ETFs, investors can usually identify hot stocks in the near term. The additional capital brought by newly listed ETFs is also worth paying attention to.

Currently, 1 ETF has disclosed it will be listed next week; the tracked underlying is natural gas and petroleum.

Currently, 9 ETFs have disclosed they will be issued next week. The tracked underlying assets include nonferrous metals, Hong Kong Stock Connect information technology, home appliances, automobiles, natural gas and petroleum, and more.

(Source: 每日经济新闻)