As the first core broad-based index following the release of the new "Nine National Measures," the much-anticipated listing time for the CSI A500 ETF has been finally confirmed. Recently, the first batch of CSI A500 ETFs have all disclosed their listing announcements, and they will collectively debut on the Shanghai and Shenzhen stock exchanges on October 15th. This will provide a new investment tool for domestic and foreign investors to deploy high-quality Chinese assets.

Institutional investors actively participate in the initial offering. Specifically, on October 15th, the CSI A500 ETF products under Hua Tai Bo Rui, Morgan Asset Management, Fu Guo, Zhao Shang, and Tai Kang Fund will be listed on the Shanghai Stock Exchange, while those under Jia Shi, Yin Hua, Guo Tai, Nan Fang, and Jing Shun Great Wall Fund will be listed on the Shenzhen Stock Exchange.

In the listing trading announcements, the names of the top ten holders of the relevant CSI A500 ETFs are also disclosed. From the list of holders, it is evident that securities firms, insurance funds, private equity, and foreign capital have all actively subscribed. The institutional investors holding the largest proportion of fund shares are mainly the products under Jia Shi, Hua Tai Bo Rui, Morgan Asset Management, Tai Kang, and Zhao Shang Fund. Specifically, Galaxy Securities, Guolian Securities, and Zhao Shang Securities appear in several CSI A500 ETF products; Tai Kang Life Insurance holds 513 million shares of Tai Kang CSI A500 ETF; Allianz Life Insurance holds 31.962 million shares of Jia Shi CSI A500 ETF and 13.1649 million shares of Fu Guo CSI A500 ETF; Xingye Futures Asset Management Plan holds several CSI A500 ETF products from Morgan Asset Management, Jia Shi Fund, and others; Barclays Bank holds 10.0003 million shares of Guo Tai CSI A500 ETF; Ping An Life Insurance holds 447 million shares of Morgan CSI A500 ETF, with a holding ratio exceeding 20%. In addition, fund managers have also actively purchased their own products, such as Jia Shi Fund subscribing to 200 million shares of its CSI A500 ETF.

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Currently, the first batch of CSI A500 ETFs has begun to build positions, with 9 CSI A500 ETFs experiencing net value changes, and incremental funds are entering the market. Among them, the construction speed of CSI A500 ETFs under Jing Shun Great Wall, Morgan Asset Management, and Jia Shi Fund is relatively fast. According to the data from the Tian Tian Fund website, as of October 8th, the Morgan CSI A500 ETF, Fu Guo CSI A500 ETF, Nan Fang CSI A500 ETF, Jing Shun Great Wall CSI A500 ETF, and Jia Shi CSI A500 ETF have the highest increase since their establishment, at 5.97%, 5.42%, 5.07%, 4.82%, and 4.49%, respectively. According to the announcement, before the first trading day, the stock investment ratio of the CSI A500 ETF will not be lower than 90%.

Broad-based indices contain more "new" elements. In the view of industry insiders, broad-based indices are a category of ETF products with continuous vitality, and their proportion and scale will continue to rise. "Our core idea is that if we are going to do broad-based indices, we must do high-quality ones," said a person in charge of Huaxia Fund at the recent high-quality development ecological conference of the ETF market.

As a more complete depiction of the characteristics of industry leaders in China's capital market, taking into account the core assets of both new productive forces industries and traditional industries, the CSI A500 Index has obvious growth and dividend characteristics. Jia Shi Fund stated that on the one hand, the CSI A500 Index is balanced in terms of future industry distribution, with a higher "new" content, with the proportion of new productive forces industries close to 50%, reflecting the structural changes in China's capital market and industrial transformation and upgrading. On the other hand, the CSI A500 Index has a stronger dividend attribute. According to the data released by the China Securities Index Company, the dividend yield of the CSI A500 Index in 2023 is 2.66%, and since 2020, the dividend yield of the CSI A500 Index has been increasing year by year, indicating that the dividend capacity of the index components is continuously improving, which is expected to provide a dividend cash source for ETF products tracking the CSI 500 Index.

"In the new round of technological revolution, high-quality enterprises representing the development direction of new productive forces are expected to bring more source water to the capital market, allowing investors to better share the fruits of high-quality economic development," said Han Xiuyi, the fund manager of Morgan CSI A500 ETF. The CSI A500 Index, as a newly compiled broad-based index, can be said to be a broad-based index with a high "new" content, covering more leading companies in sub-industries and representatives of emerging industries. The index is expected to achieve a dual drive of "core assets" and "new productive forces," fully depicting the changes in economic development structure and industrial transformation and upgrading through full industry coverage. At the same time, it does not only select components based on market value, avoiding the omission of sub-industry leaders with development potential.

Gong Lili, the fund manager of Jing Shun Fund, said that a series of monetary and financial policy combinations in recent times have exceeded market expectations, highlighting the determination to stabilize the economy and the market and to boost the confidence of micro-entities. The CSI A500 Index balances large-cap value stocks and emerging industry leaders, focusing more on the future development direction of China's economy on the basis of sufficient market representation, and has a stronger industry-neutral attribute. Therefore, the "balanced" broad-based index of the CSI A500 Index, which takes into account both large and small-cap stocks, is expected to have an even better performance.To facilitate more efficient and convenient sharing of A-share investment opportunities for domestic and foreign funds, several China Securities A500 ETFs have set lower fees and a quarterly dividend mechanism. For instance, the management fee for Harvest China Securities A500 ETF is 0.15% per year, and the custody fee is 0.05% per year, representing a lower level of stock ETF fees in the current market. At the same time, the contract stipulates that the excess return rate of the fund relative to the benchmark index will be evaluated on the last trading day of each quarter. When the excess return rate is greater than zero, the fund will distribute profits, with the distribution ratio not less than 60% of the excess return rate, striving to enhance the investment experience while meeting investors' liquidity needs. J.P. Morgan China Securities A500 ETF has also established a mandatory quarterly dividend mechanism, which means that when the excess return rate of the ETF relative to the benchmark index is positive on the last trading day of each quarter, a mandatory dividend will be distributed, with the distribution ratio not less than 60% of the excess return rate.

Index investment aids "long-term capital for long-term investment"

The new "Nine National Articles" clearly propose to vigorously promote medium and long-term capital into the market and continuously strengthen the long-term investment force. The Central Financial Office and the China Securities Regulatory Commission recently jointly issued the "Guiding Opinions on Promoting Medium and Long-term Capital into the Market," proposing that after a period of effort, the scale and proportion of medium and long-term capital investment will be significantly increased, the investor structure of the capital market will be more rational, investment behavior will be more long-term, and the market's inherent stability will be comprehensively strengthened. Investor returns will steadily increase, the concept of long-term value investment will be deeply rooted in people's hearts, and a new situation will be formed where medium and long-term capital plays a better leading role, the development of both investment and financing ends is more balanced, and the functions of the capital market are better utilized.

Industry insiders say that promoting the development of index investment is an important tool for building a "long-term capital for long-term investment" policy system. The launch of the A500 index and related ETF products is expected to further enrich and improve China's broad-based index investment system, provide the market with diversified performance benchmarks and investment targets, meet the diverse investment needs of domestic and foreign investors, and attract more medium and long-term capital into the most representative enterprises in various industries of China's economy. It will better meet the development needs of industrial structure adjustment and accelerated transformation of old and new drivers, and help build China's modern industrial system.

Li Yimei, General Manager of Huaxia Fund, said that as the "conductor's baton" of capital flow and the market "stabilizer," index investment connects the asset end and investors, and is an important tool for promoting high-quality development of the economy and the capital market. On the one hand, index investment has become the "trumpeter" of investment opportunities in the new economy field; on the other hand, indexes and index products provide the market with efficient investment tools and tracking targets. While activating the capital market, they help investors share the fruits of high-quality economic development and have gradually become an important tool for residents' wealth management and medium and long-term capital allocation. As of October 10, the scale of ETFs in the entire market has exceeded 3.6 trillion yuan. Index investment products represented by ETFs have been driven by market recognition and policy support, and broad-based index products will continue to show strong vitality.