Core Viewpoint - The ETF market is expected to continue its growth in both scale and structure, with a focus on the importance of institutional funds and the potential decline in the influence of thematic ETFs in the future [3]. Domestic Market: Policy and Market Development - The regulatory environment is enhancing the ETF industry ecosystem, with various measures introduced by the CSRC and exchanges to support the establishment and expansion of ETF products [4]. Scale and Growth: Market Expansion - By the end of 2025, the ETF market size exceeded 6 trillion yuan, marking a 61.7% increase from the beginning of the year, with the number of products rising to 1,381, a growth of 33.7% [5]. - All types of ETFs experienced varying degrees of growth, with stock, bond, commodity, and money market ETFs increasing by 44%, 376%, 231%, and 11% respectively [5]. Product Structure and Trends - As of the end of 2025, stock ETFs dominated the market, comprising 93% of the total number of ETFs, while their scale accounted for 79% of the total ETF market size [7]. - Thematic and cross-border products saw significant growth, with cross-border products increasing by 120% [11]. Fund Flows and Investor Behavior - Stock ETFs experienced a net inflow of approximately 450 billion yuan in 2025, a decrease of 57% compared to 2024, indicating a "buy high, sell low" behavior among investors [12]. - Bond ETFs saw explosive growth, with a total scale increase of 376% to 828.2 billion yuan, driven by policy support and new product launches [13]. Competitive Landscape - The competitive landscape for ETFs is becoming more intense, with a decline in concentration among fund companies and products, as evidenced by the market share of the top five companies dropping from 67% to 56% [15]. Product Issuance: Record Highs - In 2025, a record 356 passive ETFs were issued, with a total issuance scale of 251.2 billion yuan, marking a 106% increase from 2024 [15]. Outlook for 2026: Growth Potential - The absolute scale of the ETF market is expected to continue rising, with a projected growth rate of 0% to 5% from new issuances, while net inflows are anticipated to contribute 10% to 30% to the growth [30]. - The market is expected to see a slight increase in the share of passive products due to ongoing reforms and the demand for tool-based passive products [31]. Active vs. Passive Investment - Active equity products are predicted to slightly outperform index products in 2026, with a forecasted excess return of 2.5% [47]. - The market is expected to remain stable or show slight upward trends, supporting the performance of active products [47]. Thematic ETFs: Future Prospects - Thematic ETFs have regained prominence in 2025, primarily driven by significant capital inflows, contrasting with previous years where growth was mainly from new product issuances [48].