Core Viewpoint - The "ETF Connect" program has reached 265 products, showing increasing popularity and trading volume, with significant growth in both northbound and southbound transactions since its launch in July 2022 [1][3][6]. Product Expansion - The number of products under "ETF Connect" has increased by 178 since its inception, with 160 from the Shanghai Stock Connect, 88 from the Shenzhen Stock Connect, and 17 from the Hong Kong Stock Connect [3][4]. - The program is set to expand further in June 2024, with relaxed rules such as lowering the scale threshold from 1.5 billion to 500 million and adjusting index weight requirements from 90% to 60%, allowing more small-cap and thematic ETFs to be included [3][4]. Trading Volume Growth - Northbound trading volume reached 415.14 billion RMB in May 2023, a 95-fold increase compared to the first month of operation in July 2022, with historical peaks of 1,090.15 billion RMB in October 2024 [7][8]. - Southbound trading also saw significant growth, with May 2023 transactions at 460.39 billion HKD, and monthly averages for the first five months exceeding 760.51 billion HKD, with April 2023 hitting a record high of 1,207.06 billion HKD [7][8]. Market Dynamics - The increase in trading activity is attributed to multiple factors, including policy support, market liquidity, and diverse investor demand, alongside product innovation and improved market sentiment [7][8]. - The attractiveness of Hong Kong stocks to mainland investors is highlighted by the performance of specific ETFs, such as the innovative drug ETF and high-dividend ETFs, which have seen substantial gains [8]. Future Development - The future of "ETF Connect" is seen as promising, with expectations for further product diversification and the inclusion of other asset classes like bonds [10][16]. - Fund companies are encouraged to innovate in product design, enhance liquidity, and improve investor education to better serve both domestic and international investors [12][14][15]. - Optimizations in the trading mechanism and product admission criteria are suggested to enhance the efficiency and appeal of "ETF Connect" [17][18].