Investment Rating - The report maintains an "Overweight" rating for the diversified financial industry [1] Core Insights - The ETF market in September saw a total asset scale exceeding 5 trillion yuan, with a month-on-month growth of 9.9%. The stock ETF scale increased by 6.0%, driven primarily by thematic ETFs, which saw a monthly increase of 112.9 billion yuan [3][9] - The bond ETF total scale expanded by over 130 billion yuan in the same month. The competitive landscape is becoming more intense, with a decrease in the concentration of leading firms [3][5] - The public fund sales fee reform has significant implications for the industry, primarily aimed at reducing investor costs and promoting long-term investment [7][28] Total Structure - As of the end of September 2025, the total net asset value of all ETFs reached 5.63 trillion yuan, reflecting a month-on-month increase of 9.9%. The number of shares rose to 3.01 trillion, up 5.5% month-on-month [4][10] - The stock ETF net asset value totaled 3.71 trillion yuan, with a month-on-month increase of 6.0%. The thematic ETFs were the main growth drivers, contributing 112.9 billion yuan to the increase [4][10] Competitive Landscape - The concentration of the ETF market has decreased, with the CR3, CR5, and CR10 ratios at 42.0%, 54.6%, and 76.1% respectively, showing a decline of 1.7 percentage points, 2.2 percentage points, and 2.0 percentage points month-on-month [5][17] - The top three firms, Huaxia, E Fund, and Huatai-PB, maintained their positions, although their market shares have slightly declined since the beginning of the year [5][17] New Product Launches - In September, there was a peak in the issuance of stock ETFs, with a total of 12.5 billion yuan raised. Notable products included the Huazhang Hang Seng Technology Theme ETF and the E Fund China Securities Hong Kong Stock Connect Technology ETF [6][21] - Additionally, 10 new science and technology bond ETFs were launched, contributing to a total issuance scale of 40.8 billion yuan for bond ETFs [6][21] Policy Dynamics - The public fund sales fee reform aims to reshape the industry ecosystem by significantly lowering investor costs and encouraging long-term investment. The maximum sales service fee for index funds has been reduced to 0.2% per year, and long-term holdings of non-money market funds will no longer incur sales service fees [7][28] - The reform is expected to lead to an annual reduction in sales fees of approximately 30 billion yuan, benefiting the overall public fund industry ecosystem [27][28]

Core Insights - The domestic ETF market continues to attract capital, becoming an important tool for investors to capture market opportunities [1] Group 1: Market Size and Growth - The total scale of domestic ETFs is approximately 5.5 trillion yuan, surpassing Japan to become the largest ETF market in Asia [1] - The Shanghai Stock Exchange accounts for over 70% of the ETF market size, with a scale of 3.9 trillion yuan [1] Group 2: Product Composition - Within the Shanghai market, the scale of stock ETFs is 2.6 trillion yuan, while bond ETFs exceed 530 billion yuan [1] - There are over 760 ETF products available in the Shanghai market [1] Group 3: Investor Participation - The number of participating accounts in the Shanghai ETF market is approximately 10 million [1]

Core Insights - The domestic ETF market continues to attract significant capital investment, with a total scale of approximately 5.5 trillion yuan, surpassing Japan and becoming the largest ETF market in Asia [1] Group 1: Market Size and Composition - The Shanghai Stock Exchange (SSE) accounts for over 70% of the total ETF scale, with the SSE ETF scale reaching 3.9 trillion yuan [1] - Within the SSE, the stock ETF scale is 2.6 trillion yuan, while the bond ETF scale exceeds 530 billion yuan [1] - The number of ETF products in the SSE exceeds 760, with approximately 10 million participating accounts [1]

Core Viewpoint - The "national team" has significantly increased its holdings in ETFs and other Chinese stock assets during the first half of the year, demonstrating its influence and stabilizing effect on the A-share market amidst volatility [1][3][11]. Group 1: National Team's Investment Strategy - As of June 30, the "national team" institutions, including Central Huijin and China Reform Holdings, held a total of 3.769 billion ETF shares, an increase of 659.41 million shares year-to-date, with a total market value of 1.28 trillion yuan, reflecting a growth of over 20% [8][9]. - Central Huijin maintained a stable overall holding, with 21 ETFs and a total of 1.971 billion shares, while Central Huijin Asset Management significantly increased its holdings by 658.86 million shares to 1.785 billion shares, a 58.5% increase from the end of last year [4][9]. - The top five ETFs held by the "national team" include Huatai-PB CSI 300 ETF (market value of 292.9 billion yuan), E Fund CSI 300 ETF (217.7 billion yuan), and others, which together account for over 75% of the total market value of their ETF holdings [9]. Group 2: Market Trends and ETF Growth - The total market size of ETFs surpassed 5 trillion yuan by August 31, 2023, marking a 37.25% increase from the end of the previous year, with a record increase of 1.39 trillion yuan in the first eight months [11][12]. - The rapid growth of the ETF market is attributed to multiple factors, including policy support, improved market sentiment, product innovation, and increased investment demand [13][14]. - The "national team" played a crucial role in stabilizing the market during downturns, with significant inflows from long-term funds such as insurance capital, which is expected to reach a net inflow of 1 trillion yuan into equity assets this year [11][12].

Core Insights - As of the end of July, China's ETF market has surpassed Japan, becoming the largest ETF market in Asia with an asset management scale of $640.6 billion compared to Japan's $622.3 billion [1][2][5] Group 1: Market Growth and Dynamics - China's overall ETF scale reached 4.97 trillion yuan ($747.5 billion) by August 22, showing a remarkable increase of over 1.2 trillion yuan ($184.5 billion) year-to-date [5] - The growth in China's ETF market is driven by strong net inflows, particularly in industry and bond ETFs, with net inflows of 534.1 billion yuan ($82.5 billion) and 451.9 billion yuan ($70.1 billion) respectively [5] - Equity ETFs have seen a significant increase, with a growth of nearly 800 billion yuan ($123.5 billion) this year, surpassing the 4 trillion yuan ($615.5 billion) mark for the first time [5][6] Group 2: Structural Comparison with Japan - Japan's ETF market growth has slowed, with its first ETF launched in 1995 taking 20 years to reach $100 billion and 30 years to reach $600 billion, while China achieved similar milestones in 15 and 21 years respectively [8] - The structure of Japan's ETF market is heavily weighted towards large-cap stocks, with 96.86% of its ETFs being stock-based, while China's ETF market is more diversified, with significant growth in bond and cross-border ETFs [9][10] Group 3: Future Outlook - The internal drivers for China's ETF growth include state-owned investment and strong regulatory support, which are expected to maintain China's lead over Japan in asset management scale [7][11] - The rapid approval of new ETF products and the potential for more diverse offerings, including actively managed and derivative-based ETFs, are anticipated to further enhance the market's growth potential [11]

Core Insights - As of the end of July, China's ETF market has surpassed Japan, becoming the largest ETF market in Asia with an asset management scale of $640.6 billion compared to Japan's $622.3 billion [1][3][8] - The growth of China's ETF market is driven by state-backed investments and strong regulatory support, with expectations for record-breaking asset management scale, capital flow, liquidity, and product supply in the coming years [8][12] ETF Market Size and Growth - By August 22, the total size of domestic ETFs reached 4.97 trillion yuan, up from 3.73 trillion yuan at the end of the previous year, indicating a growth of over 1.2 trillion yuan within the year [6] - The increase in ETF size is significantly attributed to market appreciation, with a net inflow of 534.1 billion yuan into industry ETFs and 451.9 billion yuan into bond ETFs recently [6] Types of ETFs and Their Performance - Equity ETFs have seen a robust growth of nearly 800 billion yuan this year, surpassing the 4 trillion yuan mark, setting a historical record [6] - Bond ETFs have also experienced substantial growth, with their total size increasing from 173.97 billion yuan at the end of last year to 553.69 billion yuan as of August 22, marking a 218.26% increase [7] Comparison with Japan's ETF Market - Japan's ETF market growth has slowed, with its first ETF launched in 1995 taking 20 years to reach $100 billion and 30 years to reach $600 billion, while China achieved $600 billion in just 21 years since its first ETF launch in 2004 [9] - The structure of Japan's ETF market is heavily weighted towards domestic large-cap stocks, while China's ETF market is more diversified, with significant growth in bond and cross-border ETFs [9][10] Future Outlook - The Chinese ETF market is expected to continue its rapid growth due to factors such as a large population, accelerated product approvals, and the current underdevelopment of various ETF products [12] - The increasing popularity of passive management funds and the role of ETFs in enhancing market liquidity and stability are anticipated to further diversify the types and forms of ETF products available in the future [12]

Core Insights - The Chinese ETF market has surpassed Japan, reaching an asset management scale of $681 billion, making it the largest ETF market in the Asia-Pacific region [1] - Since 2015, both China and Japan's ETF markets have shown steady growth, but the growth rate has diverged significantly, with China's market accelerating post-2022 [3] - In 2024, Japan's ETF market saw a net inflow of $13 billion, while China's inflow reached $133 billion, indicating a substantial difference in market dynamics [3] Market Growth Comparison - Japan's ETF market has experienced slower growth, taking approximately 20 years to reach $100 billion and 30 years to exceed $600 billion [4] - In contrast, China's first ETF was launched in December 2004, and it took over seven years to surpass $1 trillion in scale, with the latest market size exceeding $480 billion in August 2023 [3][4] - The Asia-Pacific ETF market is projected to grow at a compound annual growth rate (CAGR) of 18%, potentially reaching $8 trillion by 2035 [4] Regulatory Support - Chinese regulatory bodies have actively supported the ETF market by expediting product approvals and removing financing limits, which has contributed to its rapid growth and increased product offerings [4] - The rise in acceptance of low-cost, high-liquidity investment products among retail investors has also been a significant factor in the growth of the Chinese ETF market [4]

Core Viewpoint - China has overtaken Japan to become the largest ETF market in Asia, with a management scale of $681 billion, surpassing Japan's $668 billion, and is leading the race against Europe in the region [1][3]. Market Growth - Bloomberg's ETF team predicts that China will be a significant growth engine for the Asian ETF market over the next decade, with the market expected to reach $8 trillion by 2035, surpassing Europe [1][14]. - The Chinese ETF market recently broke the $480 billion mark on August 18, just four months after surpassing $400 billion for the first time [1][9]. Historical Context - China's ETF market reached $600 billion in 21 years, nine years faster than Japan, which took 30 years to reach the same milestone [8][9]. - The first ETF in China was launched in December 2004, and it took over seven years to exceed $100 billion in scale, while Japan's first ETF was launched in 1995 and took 20 years to reach the same level [9]. Recent Trends - Since 2020, net inflows into Japanese ETFs have significantly slowed, while Chinese ETFs have seen rapid growth, with inflows in 2024 projected to be $133 billion, ten times that of Japan's $13 billion [6][10]. - The Chinese ETF market has shown consistent growth, even during periods when the Japanese market was declining [4][10]. Regulatory Support - Chinese regulatory authorities have provided strong support for the ETF market, including speeding up product approvals and not setting limits on financing scales, which helps maintain China's leading position over Japan [10]. Future Potential - The adoption rate of ETFs among individual investors in China is currently low, with only 10 million ETF investors as of June 2024, indicating significant growth potential as financial education improves [14]. - The diversification of products in China's ETF market is still in its early stages, with potential for more products like active ETFs, derivative-based ETFs, leveraged and inverse ETFs, and cryptocurrency ETFs to be approved in the future [16].

Core Insights - China has overtaken Japan to become the largest ETF market in Asia, with a management scale of $681 billion compared to Japan's $668 billion [2][3] - Bloomberg's ETF team predicts that China will be a significant growth engine for the Asian ETF market over the next decade, with the market expected to reach $8 trillion by 2035 [1][12] - The rapid growth of China's ETF market is attributed to increased retail participation and supportive regulatory measures [1][9] Market Growth - Since 2015, both China and Japan have seen steady growth in their ETF markets, but China's growth has accelerated significantly post-2022, while Japan's growth has slowed [4][6] - In 2024, Japan's ETF market is projected to see a net inflow of only $13 billion, while China's inflow is expected to be ten times higher at $133 billion [6] Historical Context - China's ETF market reached $600 billion in 21 years, nine years faster than Japan [8][9] - The first ETF in China was launched in December 2004, and it took just over seven years to surpass $1 trillion in assets, with subsequent milestones achieved in increasingly shorter timeframes [8][9] Future Projections - The Asia-Pacific ETF market is expected to grow over 30% in 2024, with a compound annual growth rate of 18% projected until 2035 [12] - As of June 2024, only 10 million individual investors in China are engaged in ETF investments, indicating significant room for growth as financial education improves [12] Product Diversification - China's ETF market is still in the early stages of product diversification, lacking actively managed ETFs, derivative-based ETFs, leveraged and inverse ETFs, or cryptocurrency ETFs [14]

Core Viewpoint - China has overtaken Japan to become the largest ETF market in Asia, with a management scale of $681 billion, surpassing Japan's $668 billion [3][5]. Group 1: Market Growth and Comparison - The Chinese ETF market has shown remarkable growth, reaching a management scale of $681 billion, while Japan's market is at $668 billion, solidifying China's position as the leader in the Asia-Pacific region [3][5]. - Bloomberg's research team predicts that China will be a significant growth engine for the Asian ETF market over the next decade, with the market expected to reach $8 trillion by 2035, surpassing Europe [3][19]. - The Chinese ETF market recently broke the $4.8 trillion mark on August 18, 2023, just four months after surpassing $4 trillion for the first time [3][13]. Group 2: Historical Context and Development - China's ETF market has grown rapidly since the launch of its first ETF in December 2004, reaching $1 trillion in 15 years and $6 trillion in 21 years, which is 9 years faster than Japan [12][14]. - In contrast, Japan's first ETF was launched in 1995, taking 20 years to reach $1 trillion and 30 years to hit $6 trillion [12][14]. - The growth trajectory of the Chinese ETF market has accelerated, with significant milestones achieved in shorter time frames compared to Japan [13]. Group 3: Future Potential and Investor Adoption - The adoption rate of ETFs among individual investors in China is currently low, with only 10 million ETF investors as of June 2024, indicating significant potential for growth as financial education improves [20]. - The Asia-Pacific ETF market is projected to grow over 30% in 2024, with a compound annual growth rate of 18% expected to elevate the market from approximately $2 trillion to $8 trillion by 2035 [19][20]. - China's ETF market is still in the early stages of product diversification, lacking active ETFs, derivative-based ETFs, leveraged and inverse ETFs, or cryptocurrency ETFs, which could further enhance growth if introduced [22].