Core Viewpoint - The approval of the first batch of the Shanghai Stock Exchange 580 ETF and its linked funds, along with the E Fund Shanghai Stock Exchange 380 ETF, provides new investment tools for capturing small-cap growth opportunities and focusing on mid-cap new blue chips [1][2]. Group 1: New Index Products - The newly approved products track the Shanghai Stock Exchange 580 Index and the Shanghai Stock Exchange 380 Index, which, along with the more familiar Shanghai Stock Exchange 50 Index and 180 Index, form a comprehensive index series for investors [1]. - The Shanghai Stock Exchange 580 Index consists of 580 small-cap stocks, reflecting the overall performance of small-cap stocks in the Shanghai market, covering approximately 10% of the total market capitalization of A-shares [1][2]. - The Shanghai Stock Exchange 580 Index has shown strong growth, with a cumulative increase of 56.63% since its inception and an annualized return of 7.39% as of June 30 [1]. Group 2: Characteristics of the Indices - Approximately 30% of the sample weight in the Shanghai Stock Exchange 580 Index belongs to companies listed on the Sci-Tech Innovation Board, and around 40% are specialized and innovative enterprises, indicating a focus on new economic drivers [2]. - The Shanghai Stock Exchange 380 Index, established in 2010, reflects the overall performance of mid-cap stocks and has undergone optimization to enhance its representativeness, stability, and industry balance [2][3]. - The optimized Shanghai Stock Exchange 380 Index includes 380 stocks with a median market capitalization of approximately 1.836 billion, focusing on both traditional and emerging industries [2][3]. Group 3: Investment Value and Market Coverage - The optimized Shanghai Stock Exchange 380 Index is aligned with the direction of economic transformation and upgrade, featuring high-revenue growth and stable profitability companies, with nearly 30% being specialized and innovative enterprises [3]. - Currently, there are only two ETFs tracking the Shanghai Stock Exchange 380 Index, with the newly approved E Fund product being the second [3]. - The Shanghai flagship broad-based index system has been upgraded to include the Shanghai Stock Exchange 50 Index (large-cap), 180 Index (big-cap), 380 Index (mid-cap), and 580 Index (small-cap), covering 1,140 sample securities and approximately 50% of the market [3].

Core Viewpoint - The approval of the first batch of Shanghai Stock Exchange 580 ETF and 380 ETF, along with their ETF linked funds, provides investors with new options for diversifying their investments in mid and small-cap stocks, filling a gap in the flagship broad-based index system of the Shanghai Stock Exchange [2][4]. Summary by Sections ETF Product Approval - On July 11, the first batch of Shanghai Stock Exchange 580 ETF and 380 ETF, along with their linked funds from Huaxia and E Fund, received approval [4]. - The Shanghai 580 Index focuses on small-cap growth opportunities, while the Shanghai 380 Index targets mid-cap new blue-chip stocks [2][4]. Index Characteristics - The Shanghai 580 Index is designed as a small-cap index, comprising stocks with market capitalizations between 5 billion and 10 billion yuan, covering approximately 10% of the total market capitalization of A-shares in the Shanghai market [4]. - The median market capitalization of the index's constituent stocks is about 8.5 billion yuan, with an average market capitalization of approximately 9.4 billion yuan [4]. Performance Metrics - As of July 10, the Shanghai 580 Index has increased by 58.96% since its base date, with an annualized return of 7.6%, indicating strong growth potential for small-cap innovative stocks in the Shanghai market [4][5]. - The Shanghai 380 Index has shown a remarkable increase of 460.86% since its base date, with an annualized return of 8.6%, highlighting the characteristics of mid-cap growth-oriented blue-chip stocks [7][8].

Core Viewpoint - The introduction of the new Shanghai Stock Exchange 580 Index has prompted immediate interest from fund companies, with both Huaxia Fund and E Fund applying to launch ETFs tracking this index, indicating a competitive landscape for new index funds [1][2]. Summary by Sections New Index Launch - The Shanghai Stock Exchange 580 Index was launched in mid-June 2023, focusing on small-cap stocks. It includes 580 securities selected from the Shanghai market based on smaller market capitalization and good liquidity [1][2]. - The total free float market capitalization of the index's constituent stocks is approximately 2.67 trillion yuan, with the largest stock having a free float market cap of 145.26 million yuan and the smallest at 6.82 million yuan [2]. Characteristics of the 580 Index - The index emphasizes innovation and supports high-quality development of the real economy, with around 30% to 60% of its weight allocated to sectors like the Science and Technology Innovation Board, specialized and innovative companies, private enterprises, and emerging industries [2]. - As of June 20, 2023, the index has seen a cumulative increase of 48.1% since its base date, with an annualized return of 6.46%, showcasing strong growth potential for small-cap innovative stocks in the Shanghai market [2]. Overview of the 380 Index - The Shanghai Stock Exchange 380 Index, established in 2010, reflects the performance of medium-cap companies and includes 380 securities selected for their medium market capitalization and liquidity [3]. - The total free float market capitalization of the 380 Index is approximately 4.10 trillion yuan, with the largest stock at 449.26 million yuan and the smallest at 17.06 million yuan [3]. Optimization of the 380 Index - The 380 Index has undergone a recent optimization, which includes revisions to the sample space, investment criteria, and the introduction of ESG screening, enhancing its representativeness and stability [4][5]. - The optimized index aims to better represent the mid-cap segment of the market, with a median market cap of approximately 183.6 million yuan for its constituents [4]. Relationship Among Indices - The 580 and 380 indices, along with the more established 50 and 180 indices, form a comprehensive index series that reflects the performance of companies across different market capitalizations in the Shanghai market [6]. - This series provides a clearer tiered structure for investors, covering a total of 1,140 sample securities, which accounts for about 50% of the market in terms of quantity and nearly 90% in total market capitalization [6]. Popularity of the 50 Index - The Shanghai Stock Exchange 50 Index is the most recognized and representative index, with 12 ETFs tracking it, the first being launched in 2004. The total scale of these ETFs is approximately 153.65 billion yuan, with the Huaxia 50 ETF alone accounting for 145.74 billion yuan [7]. - The competitive nature of index fund launches indicates a strong trend among fund companies to quickly respond to new index introductions, although the homogeneity of index funds can lead to significant differences in scale based on timing and resource allocation [7].