Despite the market turbulence in China, strong inflows into ETFs remained resilient in 2023 and particularly in the past two months. According to China Galaxy Research Institute, the AuM of China equity ETFs reached a record high of USD 238 billion on September 4th. A boost of ETF listings was observed since this year and E Fund Management ("E Fund"), the largest fund manager in China, became the biggest ETF issuer with 13 new ETF launches, including those tracking CSI 2000 index and STAR Growth index.
There's been a persistent surge in the assets of Chinese equity ETFs since 2019, recording an annual average net inflow of over USD 28 billion. As of September 11th, a substantial AuM increase of USD 56 billion was observed, demonstrating a robust growth in Chinese ETFs. In the meantime, the trading volume of equity ETFs has also grown by 34% YoY.
Among all, broad-based strategies attracted the biggest inflows. The CSI 300 index, STAR 50 index, and ChiNext index topped the charts with asset growth of USD 9.8, 8.2 and 3.5 billion respectively as of September 18th, according to Wind. With stronger policy stimulus, investors showed higher risk appetite and more interests in buying the dip while ETFs offered them a low-cost and efficient way.
Since beginning of the year, 108 new ETFs were launched as of September 18th, up by 30% YoY. The CSI 2000 index, tracking the performance of small and micro-cap listed companies, is gaining attention since its release on August 11th with annualized return at 9.34% since 2014. "We believed that CSI 2000 index is well positioned to meet investors' needs to diversify their exposure in small-cap category," says Lin Weibin, the Head of Index Investment at E Fund.
About E Fund Management
Established in 2001, E Fund Management Co., Ltd. ("E Fund") is a leading comprehensive fund manager in China with close to RMB 3 trillion (USD 420 billion) under management. It offers investment solutions to onshore and offshore clients, helping clients achieve long-term sustainable investment performances. E Fund's clients include both individuals and institutions, ranging from central banks, sovereign wealth funds, social security funds, pension funds, insurance, and reinsurance companies, to corporates and banks. Long-term oriented, it has been focusing on the investment management business since inception and believes in the power of in-depth research and time in investing. It is a pioneer and leading practitioner in responsible investments in China and is widely recognized as one of the most trusted and outstanding Chinese asset managers.
FX rate as of September 20th