According to media statistics, as of Jan. 15, the share of equity ETFs fell by more than 11.3 billion shares compared with the end of 2020, with a market value of about 18.5 billion yuan based on the average price in the past half month. Due to the special properties of the funds that subscribe to ETF funds, such funds are often regarded as the “stabilizer” of the market.
The brokerage China reported on Jan. 18 that at the beginning of the New Year in 2021, the share of China’s A-share ETFs has shrunk sharply. According to the brokerage China reporter, as of Jan. 15, the share of equity ETFs has slipped by more than 11.3 billion shares compared with the end of 2020, with a market value of about 18.5 billion yuan based on the average price of the last half month.
As of the end of 2020, the total share of equity ETFs exceeded 430 billion shares. Due to the special capital attributes of subscription ETF funds, these funds are often regarded as the “stabilizer” of the market.
According to the report, from the market structure, among the shrinking funds, chip, 5G, electronics, science and technology, GEM 50 ranked in the forefront, of which the chip ETF fund shrinkage scale is very large, while the share of photovoltaic, wine, new energy vehicles and military ETFs still have growth, which may be the reason for the continued existence of the group.
ETF fund share shrinkage in 15 days in January 2021
Last Friday (Jan. 15), “one action and one statement” by the Communist Party of China’s central bank triggered market buzz.
One of the actions refers to the MLF reduction and renewal. On the morning of the same day (Jan. 15), the CPC central bank conducted 500 billion MLF operations, much lower than the market expectation of 800 billion, and actually netted back 40.5 billion; one statement refers to the current reserve requirement ratio level is not high, the CPC central bank said in a press conference.
According to Shen Wan Hongyuan, the CPC central bank’s large-scale MLF net injection in late November and mid-December 2020 was mainly aimed at neutral hedging operations for the possible high increase in government deposits to avoid a passive credit shock scenario similar to that in October, and the current policy intention is to return to “neutrality”.
A private equity source pointed out that the bull market in 2020 was triggered by liquidity. From the recent subscriptions of new funds, the Chinese stock market is still an incremental market. The source of the market comes from the liquidity injection, in recent times, China and the United States 10-year Treasury yields are on the rise, MLF reduction renewal, will not limit risk appetite, remains to be seen.
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