Market Overview - The A-share market showed a stabilizing rebound during the week of October 27-31, 2025, with the ChiNext Index and STAR Market 50 Index leading the gains, while the Shanghai Composite Index fluctuated around 4000 points, reaching recent highs [1] - Major indices mostly closed higher, with the Shanghai Composite Index, Shenzhen Component Index, and ChiNext Index rising by 0.11%, 0.67%, and 0.50% respectively [1] - The two-in-one margin balance quickly rebounded, indicating an increased willingness among some investors to engage in leveraged trading under the current market conditions [1] ETF Performance - New energy-related ETFs continued their upward trend, supported by significant policies in the "14th Five-Year Plan," with technology being a key focus [2] - The top ten ETFs by growth included several technology-focused products, such as the China-Korea Semiconductor ETF and battery ETFs, which saw gains exceeding 7% [2] - In September, new energy vehicle sales reached 1.604 million units, a year-on-year increase of 24.6%, with a market penetration rate climbing to 49.8% [2] - The demand for lithium batteries remains strong, with a 47.3% year-on-year increase in installed capacity for power batteries in the first half of 2025 [2] Decline in Certain Sectors - The storage chip sector faced a downturn following Samsung's announcement of a 30% price reduction for its 12-layer HBM3E storage chips, leading to a collective cooling in the storage chip sector [3] - Despite the recent decline, analysts predict that AI will drive a structural and long-term demand for storage chips, expanding the demand base beyond consumer electronics [3] - By 2026, demand for storage chips from AI servers is expected to increase significantly, indicating a dual-driven growth model for the sector [3] Fund Trends - During the week of October 27-30, 2025, the average daily trading volume fell below 2 trillion, reflecting a decrease in market activity and a slight net inflow of 33.3 billion [4] - Bond ETFs saw significant inflows, with 110.59 billion entering, indicating a shift towards fixed-income products amid changing market conditions [7] - The Tianhong Science and Technology Bond ETF led inflows with over 40 billion, followed by other bond ETFs with substantial inflows as well [7] ETF Issuance - Six new ETFs are set to be launched next week, including the China Life Asset Management CSI A500 Dividend Low Volatility ETF, which focuses on high dividend and low volatility stocks [9] - The Bosera Securities Company ETF tracks the CSI All Share Securities Company Index, reflecting the overall performance of the securities industry in China [10] - The E Fund Hang Seng Biotechnology ETF aims to reflect the performance of the largest 30 biotechnology companies listed in Hong Kong, highlighting the growth potential in this sector [11]

Group 1 - Tianhong Zhongzheng AAA Sci-tech Bond ETF (159111) was launched on September 12 and completed fundraising on the same day, offering transparent holdings and efficient T+0 trading [1] - The ETF closely tracks the Zhongzheng AAA Sci-tech Company Bond Index, which has shown an annualized return of over 4% and a low annualized volatility of 1.07% over the past three years [1] - The index covers 986 sci-tech bonds from the Shanghai and Shenzhen stock exchanges, indicating a diversified sample [1] Group 2 - The Central Financial Work Conference in October 2023 emphasized the importance of "five major articles," with sci-tech finance being the top priority, aligning with the government's push for high-level technological self-reliance [1] - Sci-tech bonds, as a new financing tool in the bond market, are crucial for enhancing direct financing efficiency for tech enterprises and promoting a positive cycle among technology, industry, and finance [2] - The growth of bond ETFs in China positions sci-tech bond ETFs as a significant component in the bond ETF landscape [2] Group 3 - Tianhong Fund's other bond ETF, Tianhong Credit Bond ETF (159398), showed a slight increase of 0.02% during trading [3]

Core Insights - The Tianhong Sci-Tech Bond ETF (159111) has successfully raised over 2.9 billion yuan in just one day, indicating strong institutional interest in bond ETF products [1] - The scarcity of the Sci-Tech Bond ETF and its ability to fill a gap in bond investment tools are key factors driving its popularity [1] - The ETF features T+0 trading, a minimum fee rate of 0.2%, high credit quality investment targets, and high investment cost-effectiveness [1] Performance Metrics - The index tracked by the ETF, the CSI AAA Sci-Tech Bond Index, has shown an annualized return of 4.37% since the end of June 2022, with an annualized volatility of only 1.05% and a maximum drawdown of -1.41% [1] - The Sharpe ratio of the index stands at 2.42, indicating a favorable risk-adjusted return [1] Market Context - The potential increase in redemption fees for public funds may enhance the advantages of bond ETF products in the short term [1] - The underlying securities of the ETF are predominantly issued by central state-owned enterprises, with over 50% of the components being from central enterprises, ensuring manageable credit and concentration risks [1]

Core Viewpoint - Tianhong Fund has launched the Sci-Tech Bond ETF Tianhong (159111), marking its second bond ETF following the Credit Bond ETF Tianhong (159398) [1] Group 1: ETF Overview - The Sci-Tech Bond ETF Tianhong (159111) closely tracks the CSI AAA Sci-Tech Innovation Company Bond Index, which selects bonds based on remaining maturity and credit ratings from the Shanghai and Shenzhen stock exchanges [1] - As of September 11, the CSI AAA Sci-Tech Innovation Company Bond Index covers 983 sci-tech bonds with a total bond balance of 1.29 billion [1] - The index has achieved an annualized return of over 4% in the past three years, with an annualized volatility of only 1.07% [1] Group 2: Investment Characteristics - The Tianhong Sci-Tech Bond ETF adopts a cash subscription and redemption model, making it more convenient for large fund subscriptions and redemptions compared to physical redemption bond ETFs [1] - The index constituents are primarily AAA-rated, with over 98% being central and local state-owned enterprises [2] - The ETF features low investment thresholds, T+0 trading mechanisms, flexible subscription and redemption, and market maker pricing, enhancing trading flexibility and arbitrage opportunities for investors [2] Group 3: Market Dynamics - The Credit Bond ETF Tianhong (159398) has seen significant growth, with an increase of 73.4 million shares year-to-date, representing a growth rate of over 244% [3] - Short-term risks of significant declines in the index constituents of the Sci-Tech Bond ETF are considered low due to continuous growth in ETF scale and new capital inflows from the issuance of additional ETFs [4] - The issuance of new Sci-Tech Bond ETFs is expected to improve the liquidity of underlying index constituents, potentially stabilizing excess yield spreads [4]

Core Insights - Tianhong Fund has launched the Sci-Tech Bond ETF (159111) on September 12, 2023, which features T+0 trading, low fee rate of 0.2%, transparency in holdings, high credit quality, diversified investment, and policy benefits, making it valuable for both trading and allocation [1][2][3] Group 1: Product Features - The Sci-Tech Bond ETF tracks the CSI AAA Sci-Tech Innovation Company Bond Index, which has an annualized return of 4.37% since June 2022, with a low annualized volatility of 1.05% and a maximum drawdown of -1.41% [1] - The ETF has a low comprehensive fee rate of 0.2% per year, significantly lower than traditional bond funds, which helps reduce long-term holding costs for investors [7] - The ETF allows for efficient trading with T+0 features, enabling investors to buy and sell on the same day, thus improving capital utilization [7] Group 2: Market Context - Since late June, the bond market has shown signs of stabilization, with institutions starting to position themselves in the Sci-Tech Bond ETF amid a favorable interest rate environment [2][9] - The total market size of Sci-Tech bonds has exceeded 1.6 trillion yuan, with the ETF's scale surpassing 120 billion yuan, making it the second-largest credit bond ETF [2][3] - The ETF is seen as a suitable vehicle for institutions to engage in left-side positioning due to its better yield elasticity in bull markets and stronger resilience in bear markets [2][9] Group 3: Investment Performance - The CSI AAA Sci-Tech Bond Index has shown a high annualized return of 5.04% since the beginning of 2023, outperforming other indices in the same category [6] - The index consists of 886 bonds, covering 64% of all Sci-Tech bonds in the market, which enhances liquidity and provides a stable trading environment [6] - The ETF's underlying assets are primarily high-rated bonds, with over 99% of issuers being state-owned enterprises, ensuring controlled credit and concentration risks [3][6]