Group 1 - The report from Zhongtai Securities indicates that the A-share market is expected to continue a structural upward trend driven by valuation recovery under a dual easing environment of fiscal and monetary policies, with a focus on sectors with clear policy guidance and high prosperity [1] - As of July 29, 2025, the total net asset value of non-monetary ETFs reached 4.49 trillion yuan, showing a steady increase compared to the end of Q1, with stock and cross-border ETFs dominating the market share [1] - The trading volume of stock ETFs has decreased as investors shifted towards direct stock trading to capture short-term opportunities, leading to a decline in the proportion of stock ETFs in the overall market [1] Group 2 - The proportion of scale index ETFs in stock ETFs has decreased from 75.9% at the beginning of the year to 71.6% by July, while the shares of theme and industry index ETFs have increased [2] - The bank ETF has seen significant growth, with its share exceeding 16 billion yuan, while the pharmaceutical ETF has experienced a reduction of over 14 billion yuan [2] - The semiconductor ETF has been continuously increased due to AI capital expenditure, and the bank ETF has also been significantly increased after May [2] Group 3 - The report highlights that the Huijin fund has increased its holdings in ETFs significantly, with over 200 billion yuan added in Q2, primarily in the CSI 300, CSI 1000, SSE 50, and CSI 500 ETFs [3] - The Huijin fund's increase in holdings has provided a stabilizing signal for the market, with the Huijin fund becoming the largest shareholder in several ETFs [3][4] - The total share of Huijin's major ETFs has increased significantly, with the CSI 300 ETF's total share growing by 16.18% from April 3 to April 21 [4]

Group 1 - The core viewpoint of the article highlights that China's ETF market has achieved significant net inflows, totaling $108.92 billion in the past year, making it the leader in the Asia-Pacific region [1] - As of the end of April this year, China's ETF asset scale accounted for 30.7% of the total ETF asset scale in the Asia-Pacific region [1] - The event "ETF New Ecology Long-term Investment Wins the Future" was co-hosted by Morgan Asset Management and the Shanghai Stock Exchange, indicating a growing interest in the ETF market [1]

Group 1 - The report indicates that the secondary market experienced a slight net outflow of funds, with industry ETFs showing net inflows while broad-based ETFs continued to see net outflows [2][5][10] - In July, the market risk appetite is expected to improve, with incremental funds likely to continue flowing in, primarily favoring large-cap stocks, while growth and value stocks may see a more balanced performance [2][5] - The liquidity index for A-shares shows a decrease in public fund issuance to 4.251 billion, a drop in ETF net subscriptions to -20.657 billion, and an increase in financing net purchases to 12.607 billion [4][29] Group 2 - The report highlights that overall, ETFs have been experiencing continuous net outflows this year, with industry ETFs showing a slow net inflow while broad-based ETFs have seen significant outflows [5][10][13] - The report notes that the net inflow for industry ETFs is attributed to investors' preference for participating in structural market trends through these funds [13][15] - The report also mentions that the overseas-listed Chinese asset ETFs have shown little change, indicating a slight net outflow [15] Group 3 - The report outlines that the financing balance has increased, with net purchases of financing reaching 12.61 billion, while the net outflow from ETFs was 20.66 billion [5][29] - The report indicates that the market sentiment has weakened, with a decrease in the trading activity of financing funds and a decline in equity risk premiums [39][41] - The report identifies that sectors such as defense, non-bank financials, and metals have seen significant net inflows, while sectors like banking, pharmaceuticals, and food and beverage have experienced net outflows [48][49]

Core Viewpoint - The domestic ETF market has reached a new high with a total scale of 4.31 trillion yuan as of June 30, 2023, reflecting a 15.55% increase from the end of last year, driven by over 300 billion yuan in inflows and structural market trends [1][5]. Group 1: Market Trends - The ETF market has seen significant growth since 2025, with over 300 billion yuan in new funds entering the market [1]. - As of June 30, 2023, the total scale of ETFs listed in China reached 4.31 trillion yuan, up from 3.73 trillion yuan at the end of last year, marking a 15.55% growth [1][5]. - Several ETFs have demonstrated strong performance, with multiple Hong Kong stock innovative drug ETFs and others achieving over 50% returns [1][11]. Group 2: Changes in Fund Flows - Three major changes in fund flows have been identified in the ETF market for the first half of the year: 1. The top ten ETFs by net inflow are no longer exclusively broad-based ETFs [2][4]. 2. Bond ETFs have contributed significantly to the market's growth [5][6]. 3. Industry-specific ETFs have gained popularity, particularly dividend-themed ETFs [7][10]. Group 3: Performance of Specific ETFs - The top ten ETFs by net inflow include various products, with the top performers being the HuShen 300 ETF and several bond ETFs, collectively attracting significant capital [3][9]. - Despite some core broad-based ETFs experiencing net outflows since May, they still ranked high in net inflows for the first half of the year, with several exceeding 100 billion yuan [8][9]. - The performance of ETFs tracking innovative drug and technology indices has been particularly strong, with many achieving returns exceeding 50% [11][13]. Group 4: Investor Behavior and Market Sentiment - The divergence between fund flows and returns can be attributed to investor behavior, where institutional investors may redeem funds upon reaching target returns, leading to net outflows despite high returns [15]. - Market sentiment also plays a role, as investors may preemptively invest in broad-based ETFs based on economic recovery expectations, while taking profits from high-performing ETFs [15]. Group 5: Future Outlook - Analysts suggest that the market may continue to experience high volatility, with a focus on sectors such as defense and technology for potential growth opportunities [16][17]. - The ongoing low interest rate environment and policies favoring dividends are expected to support high-yield assets, while the economic recovery may enhance market risk appetite [17].

Core Insights - The article posits that the most influential export of the United States may be the continuous rise of its stock market rather than physical products, highlighting the significant demand for U.S. asset exposure among global investors [2][3]. Group 1: Global ETF Market Overview - The total global ETF assets amount to $16 trillion, with approximately $9.8 trillion focused on the U.S. market, indicating a strong preference for U.S. assets over the past decade [2][3]. - Nearly 70% of global ETF assets are linked to the U.S. market, with only 11% and 16% allocated to Europe and Asia-Pacific, respectively [4][6]. Group 2: Performance of ETFs - The difficulty of outperforming the S&P 500 index is notable, with only about 29% of over 8,000 global stock ETFs outperforming the index in the past year, and a mere 7% doing so over a ten-year period [8]. - U.S.-launched ETFs tracking the S&P 500 dominate in three of the four major regional markets, with Vanguard's S&P 500 ETF leading in the U.S., while BlackRock's iShares ranks first in Europe [8].

Core Viewpoint - The A-share market has shown a rebound since April, with the Shanghai Composite Index rising by 9.43% as of June 16, leading to a significant inflow of over 300 billion yuan into ETF funds, reversing the net outflow trend from the first quarter [1][2]. Group 1: ETF Market Performance - The ETF market has transitioned from a net outflow in the first quarter to a net inflow of 3019.93 billion yuan since the beginning of the second quarter, with stock ETFs attracting 1132.31 billion yuan [3]. - The CSI 300 ETF has been a major beneficiary, attracting over 1095.99 billion yuan in the second quarter, with leading products like Huatai-PB CSI 300 ETF and Huaxia CSI 300 ETF each gaining over 320 billion yuan [3]. - Other broad-based indices such as CSI 1000, CSI 500, and SSE 50 also saw significant inflows, with notable contributions from Southern CSI 500 ETF and Huaxia SSE 50 ETF, which received 162.23 billion yuan and 150.07 billion yuan respectively [3]. Group 2: Gold and Bond ETFs - The gold sector has emerged as another key area for investment, with gold ETFs collectively attracting 464.49 billion yuan in the second quarter and over 637 billion yuan year-to-date, driven by rising gold prices [4]. - The Huaan Gold ETF has seen the most significant growth, with a net inflow of 161.57 billion yuan in the second quarter, bringing its total size to 617.85 billion yuan [4]. - Bond ETFs have also experienced accelerated inflows, with 996.34 billion yuan entering the market in the second quarter, indicating strong demand for these products [4]. Group 3: Divergence in the Pharmaceutical Sector - The Hong Kong pharmaceutical sector has shown mixed results, with 9 out of 17 cross-border ETFs tracking medical or pharmaceutical indices experiencing net outflows, while some innovative drug ETFs have seen inflows [5]. - The Bosera Hang Seng Healthcare ETF has faced significant outflows, totaling 64.83 billion yuan in the second quarter, contrasting with the inflows into other innovative drug ETFs [5]. Group 4: ETF Market Challenges - The ETF market is undergoing intense competition, leading to a significant number of products facing liquidity issues and potential delisting, with at least 16 ETFs having issued warnings about possible liquidation this year [6][8]. - As of June 13, 151 ETFs had assets below the 50 million yuan threshold, indicating a growing concern over the viability of smaller ETFs [8]. - Low liquidity in certain ETFs poses risks for investors, as highlighted by instances where daily trading volumes fell below 1 million yuan for many products [8][9]. Group 5: Industry Trends and Product Differentiation - The rapid expansion of the ETF market has led to product homogenization, complicating investor choices and increasing the risk of confusion [9]. - Fund companies are responding by standardizing product naming conventions to enhance clarity and help investors better understand ETF characteristics [9].

Quantitative Models and Construction Methods - **Model Name**: Absolute Return ETF Simulation Portfolio **Model Construction Idea**: The model determines the allocation weights of major asset classes based on "momentum + risk budgeting" and enhances returns at the stock industry level by incorporating an industry rotation model and timing views on dividend assets[3][26] **Model Construction Process**: 1. **Risk Budgeting**: Assign higher risk budgets to assets with stronger recent trends 2. **Industry Rotation**: Use a monthly frequency industry rotation model to allocate weights within equity assets 3. **Dividend Timing**: Incorporate timing views on dividend assets 4. **Portfolio Adjustment**: Adjust weights periodically, such as removing steel, basic chemicals, non-bank finance, and computers while adding pharmaceuticals, consumer services, and dividend assets in the latest rebalancing[26][29] **Model Evaluation**: The model effectively balances risk and return, leveraging momentum and industry rotation to enhance performance[26] Model Backtesting Results - **Absolute Return ETF Simulation Portfolio**: - Annualized Return: 6.45% - Annualized Volatility: 3.85% - Maximum Drawdown: 4.65% - Sharpe Ratio: 1.68 - Calmar Ratio: 1.39 - Year-to-Date Return: 3.94% - Weekly Return: 0.30%[28] Quantitative Factors and Construction Methods - **Factor Name**: Credit Bond ETF as Collateral for Repurchase **Factor Construction Idea**: The factor leverages the inclusion of credit bond ETFs in the general collateral pool for repurchase agreements to enhance liquidity and risk diversification in the credit bond market[7][9] **Factor Construction Process**: 1. **Selection Criteria**: ETFs tracking benchmark market-making credit bonds with large scale and high credit quality are selected 2. **Approval Process**: ETFs meeting the criteria apply to China Securities Depository and Clearing Corporation for inclusion as general collateral for repurchase agreements 3. **Implementation**: The first batch of 9 credit bond ETFs was approved and implemented on June 6, 2025[7][8] **Factor Evaluation**: This factor improves market liquidity, optimizes market structure, and supports the development of the real economy[9] Factor Backtesting Results - **Credit Bond ETF as Collateral for Repurchase**: - Example ETFs: - South China Benchmark Market-Making Corporate Bond ETF (Code: 511070.SH): Scale 124.81 billion, Monthly Average Turnover 48.89 billion - Huaxia Benchmark Market-Making Corporate Bond ETF (Code: 511200.SH): Scale 83.09 billion, Monthly Average Turnover 45.89 billion - Ping An ChinaBond High-Grade Corporate Bond Spread Factor ETF (Code: 511030.SH): Scale 170.70 billion, Monthly Average Turnover 17.76 billion[8]

ETF Industry News Summary - The three major indices collectively rose, with the defense and military sector ETFs leading the gains, including a 5.53% increase in the military leader ETF (512710.SH) and a 5.05% increase in the national defense ETF (512670.SH) [1] - The bond ETF market has accelerated, surpassing 250 billion yuan in total scale, reaching 253.1 billion yuan, with 503 million yuan net inflow this year [2] - New indices are being launched, providing more options for multi-asset ETFs, which are expected to diversify asset allocation and reduce investment risks [3] Market Performance Overview - The A-share market saw all three major indices rise, with the Shanghai Composite Index up 0.82% and the ChiNext Index up 2.63% [4] - The defense and military sector, along with electric equipment and machinery, ranked high in sector performance, with daily increases of 4.8%, 2.69%, and 2.24% respectively [7] ETF Market Performance - The average performance of various ETF categories showed that thematic stock ETFs had the best average increase of 1.30%, while commodity ETFs had the worst performance with an average decrease of 1.55% [10] - The top-performing ETFs included the China Securities 2000 Enhanced ETF (159552.SZ) with a 6.44% increase, followed by the military leader ETF (512710.SH) and the national defense ETF (512670.SH) [13] - The top three ETFs by trading volume were the A500 ETF (512050.SH), the CSI 300 ETF (510300.SH), and the ChiNext ETF (159915.SZ), with trading volumes of 3.826 billion yuan, 3.327 billion yuan, and 3.150 billion yuan respectively [16]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In the past two weeks, most ETF products have performed poorly, with only a few exceptions. The capital flow trends of different types of ETFs vary, and the scale of most ETFs has changed to some extent compared to the end of 2024 [2]. 3. Summary by Relevant Catalogs 3.1 ETF Market Review 3.1.1 Main Type ETF Fund Flows Overview - In the past two weeks, most broad - based ETFs had net capital inflows, with the CSI 300 ETF having the largest net inflow. Among them, the products tracking the STAR 50 had the smallest decline among broad - based ETFs, and the military industry ETF had the smallest decline among industry and theme products [9][11]. 3.1.2 Main Type ETF Cumulative Fund Flows - **Broad - based ETFs**: Since 2025, broad - based ETFs have generally seen capital outflows, but recently, due to large - scale capital inflows into the CSI 300 ETF and others, most broad - based ETFs have achieved net capital inflows. In April, except for A - series ETFs, all types of broad - based ETFs have changed from net outflows to net inflows, with significant inflows into the CSI 300, CSI 1000, and CSI 2000 ETFs [12]. - **Industry and Theme ETFs**: Technology ETFs have seen capital inflows since March, and the inflow speed has accelerated in the past two weeks. Pharmaceutical ETFs have changed from outflows to inflows, while financial real - estate ETFs have changed from inflows to outflows. Dividend ETFs have seen continuous small - scale capital inflows this year, and the net inflow speed has slightly increased in the past two weeks [20]. - **Bond ETFs**: Since 2025, credit - bond and treasury - bond ETFs have had net capital inflows, while convertible - bond ETFs have had net outflows. Affected by the bond - market rebound, treasury - bond ETFs have seen accelerated capital inflows since March, but in the past two weeks, treasury - bond and convertible - bond ETFs have changed from net inflows to net outflows, while short - term financing ETFs have had net inflows [20]. 3.1.3 ETF Product Structure Distribution - **Newly - issued Products**: As of April 11, 12 new ETFs were established in the past two weeks, with a total issuance share of 4.439 billion, including 11 stock ETFs and 1 QDII ETF [25]. - **Product Scale**: Compared with the end of 2024, except for broad - based ETFs, the scales of various types of ETFs have increased. The scales of commodity ETFs, bond ETFs, industry + dividend ETFs, and QDII - ETFs have increased by 71.48%, 32.76%, 12.22%, and 2.48% respectively, while the scale of broad - based ETFs has decreased by 1.42% [25]. 3.1.4 Manager Scale Distribution - As of April 11, China Asset Management has the largest on - exchange ETF scale, reaching 67.3518 billion yuan. E Fund's ETF management scale has expanded by more than 25.449 billion yuan compared to a year ago [26]. 3.2 Classification of ETF Tracking 3.2.1 Technology Theme ETF - **Performance**: Products tracking semiconductor - related indexes such as the CSI Semiconductor have performed well in the past two weeks, and overseas technology ETFs have performed worse than domestic ones [32]. - **Fund Flows**: Products tracking Hong Kong technology indexes such as the Hang Seng Tech have had the largest net capital inflows in the past two weeks, while products tracking the CSI All - Share Semiconductor have had net outflows [32]. 3.2.2 Dividend Theme ETF - **Performance**: The ETF product tracking the MSCI China A - Share International Low Volatility (USD) has had the smallest decline in yield in the past two weeks [33]. - **Fund Flows**: Products tracking the Dividend Low Volatility index have had the largest net capital inflows in the past two weeks, while products tracking the Guoxin Hong Kong - Stock Connect Central - SOE Dividend index have had significant net outflows [33]. 3.2.3 Consumption Theme ETF - **Performance**: Products tracking agricultural indexes such as the China Securities Grain Index have performed well in the past two weeks. The S&P 500 Consumer Discretionary Select Index ETF has a high premium [36]. - **Fund Flows**: The ETF tracking the 800 Consumption Index has had the largest net capital inflows in the past two weeks, while products tracking the CSI Wine Index have had net outflows [36]. 3.2.4 Pharmaceutical Theme ETF - **Performance**: Products tracking the STAR Biotech Index have performed well in the past two weeks [39]. - **Fund Flows**: ETFs tracking the Hong Kong Innovative Drug (CNY) and Hong Kong - Stock Connect Innovative Drug indexes have had the largest net capital inflows in the past two weeks, while products tracking the Hang Seng Healthcare Index have had net outflows [39]. 3.2.5 Large - scale Manufacturing Theme ETF - **Performance**: Products tracking utility - related indexes such as the Green Power Index have performed well in the past two weeks [42]. - **Fund Flows**: Products tracking the CSI Military Industry Index have had the largest net capital inflows in the past two weeks, while products tracking new - energy indexes such as the New - Energy Battery Index have had net outflows [42]. 3.2.6 QDII ETF - **Performance**: Products tracking the S&P 500 Consumer Discretionary Select Index have performed well in the past two weeks, and the QDII - ETF tracking this index has a high premium [44]. - **Fund Flows**: Products tracking the Hang Seng Tech Index have had the largest net capital inflows in the past two weeks, while ETF products tracking the Hang Seng Healthcare Index have had net outflows [44]. 3.3 Hot - Topic ETF Tracking 3.3.1 AI Theme ETF - **Performance**: AI - themed products have performed poorly in the past two weeks, with an average yield of - 9.12%. The product tracking the CS Artificial Intelligence index has the highest yield [52]. - **Fund Flows**: Since February 2024, there has been a large - scale net capital inflow. After a significant outflow from September to October 2024, the overall trend has been a rapid inflow. In the past two weeks, the capital inflow speed has slowed down, with a net inflow of 516 million yuan [52]. 3.3.2 Robot Theme ETF - **Performance**: Robot - themed products have performed poorly in the past two weeks, with an average yield of - 9.38%. The product tracking the Automobile Index has the highest yield [56]. - **Fund Flows**: After December 2024, the overall capital flow has shown a rapid inflow trend. In the past two weeks, the capital inflow speed has accelerated, with a net inflow of 1.625 billion yuan [56]. 3.3.3 "National Team" Holding ETF - As of the end of 2024, the "National Team" (only counting Huijin, Guoxin, and Chengtong) held a total of 320.396 billion shares of ETFs. In the past two weeks, there has been a large - scale net capital inflow of 186.118 billion yuan, with a net inflow of 106.611 billion yuan on April 8 alone [2].

Core Viewpoint - The article discusses the suggestions made by Feng Yidong, a member of the National Committee of the Chinese People's Political Consultative Conference and General Manager of Zhongtai Securities, regarding the optimization of the capital market during the 2025 National Two Sessions [1][2]. Group 1: Suggestions on Shareholder Regulations - Feng Yidong recommends optimizing the regulatory mechanism for major shareholders' share reductions, suggesting differentiated supervision for strategic investors and controlling shareholders. He advocates for relaxing reduction restrictions for strategic investments to facilitate timely exits and new investments, thereby promoting a healthy cycle of fundraising, investment, management, and exit [3]. - He also proposes linking share buybacks and dividends to the reduction limits of controlling shareholders, ensuring that the total amount of buybacks and dividends exceeds the total funds raised from the secondary market as a condition for share reductions, which aims to protect the interests of small investors [3]. Group 2: Market Trading and Fund Management - The article highlights the need to regulate quantitative trading in the stock market to enhance market liquidity and stability. Feng suggests increasing the capital requirements and entry thresholds for high-frequency trading strategies, implementing a dual system of "licensing + filing" for different types of quantitative institutions [4]. - Regarding the ETF market, Feng recommends relaxing or eliminating the requirements for public fund share listing conditions, such as the minimum fundraising amount and the number of fund shareholders, to support the long-term healthy development of listed funds [5]. Group 3: Delisting and Private Equity Market - Feng Yidong suggests optimizing the delisting system to protect the interests of small investors, proposing to weaken mandatory delisting requirements and allow companies to decide on their delisting, encouraging voluntary delisting through mergers and acquisitions [6]. - He advocates for establishing a secondary trading market for private equity based on the Beijing Stock Exchange to facilitate a positive cycle of investment, transfer exit, and reinvestment, along with improving legislative frameworks for private equity transactions [6]. Group 4: Market Manipulation and Investor Protection - The article emphasizes the need to strengthen the regulation of market manipulation, particularly for stocks with price limits exceeding 10% on specific boards, to prevent irrational speculation and excessive market volatility [7].