Core Viewpoint - The recent surge in demand for cross-border ETFs among domestic investors is accompanied by significant premium pricing, raising concerns about market overheating and potential risks for investors [1][2]. Group 1: Market Trends - As of November 18, 19 public fund companies have issued over 330 risk warning announcements regarding 34 cross-border investment products, indicating a heightened awareness of premium risks [1]. - The average premium rate for 192 cross-border ETFs in the market is 0.79%, with 32 products exceeding 1% and 2 products surpassing 10%, highlighting a significant disconnect between price and value [1]. - The Nikkei 225 index has recently declined from historical highs, and major U.S. stock indices have also experienced notable drops, exacerbating the risks associated with high premiums [1]. Group 2: Investor Behavior - Professor Tian Lihui from Nankai University emphasizes that while cross-border ETFs are essential for global asset allocation, the current premium phenomenon suggests that investor enthusiasm may have surpassed rational valuation [2]. - Analysts suggest that the cash creation and redemption mechanism of cross-border ETFs, combined with foreign exchange quota restrictions, can lead to mismatches in supply and demand, driving up secondary market prices and resulting in high premiums [4]. Group 3: Long-term Outlook - Despite short-term risks, the long-term demand for cross-border ETFs remains strong, with a year-to-date growth of 116.86%, reaching 919.949 billion yuan, and a net inflow of over 34 billion yuan in November alone [4]. - Industry experts advocate for a rational investment framework and ongoing investor education to mitigate the risks associated with high premiums and to promote a long-term perspective on cross-border ETF investments [4].

Core Viewpoint - The recent surge in small-cap cross-border ETFs has raised concerns about the risks associated with high premium rates, particularly highlighted by the Invesco Great Wall S&P Consumer ETF, which saw a premium exceeding 40% [4][5][10] Group 1: Market Performance - On March 25, the Invesco Great Wall S&P Consumer ETF was suspended due to significant premium rates, which later resumed trading with a daily increase of 4.94% and a premium rate of 42% [5][6] - Other ETFs, such as the Guotai Fund's S&P 500 ETF and the Southern Fund's Saudi ETF, also experienced high premium rates of 22.9% and 11.7%, respectively, with notable daily increases of 6.25% and 2.37% [5][6] - As of March 25, 19 cross-border ETFs had premium rates exceeding 2%, indicating a broader trend of high premiums in the market [4][5] Group 2: Investor Risks - Historical data shows that high premium ETFs typically maintain their premium for an average of only 1.7 days, leading to potential risks of "premium evaporation + net value decline" for investors [10] - Analysts warn that the high premium phenomenon is closely linked to the performance of the A-share market, with increased volatility driving funds into perceived "safe-haven" cross-border ETFs [8][9] - The limited foreign exchange quotas for Qualified Domestic Institutional Investors (QDII) hinder the arbitrage opportunities that could stabilize premium rates, contributing to the persistent high premiums [9] Group 3: Investment Strategy - Investors are advised to be cautious and avoid blindly investing in high premium ETFs, particularly those with premium rates exceeding 10%, and to prioritize larger, more liquid ETFs [9][10] - The Invesco Great Wall Fund has indicated that investors can trade its S&P Consumer ETF in the secondary market, but the Guotai Fund's S&P 500 ETF has suspended subscription services, limiting investor options [9]