Encountering "Late Spring Cold"! Total ETF Market Scale Shrinks by Nearly 150 Billion Yuan in a Week

Source: Daily Economic News Author: Peng Shuping

Last week (March 16–20), A-shares experienced volatility and adjustments. Except for the ChiNext Index, which rose 1.26% for the week, all other major indices declined. The Shanghai and Shenzhen 300 Index fell 2.19%, the CSI A500 Index dropped 3.18%, and the STAR Market 50 Index declined 4.03%. Hong Kong stocks also surged and then pulled back, with the Hang Seng Index down 0.74% and the Hang Seng Tech Index down 2.12% for the week.

Last week, both A-shares and Hong Kong stocks rose and then fell back, once again playing out the “stock-bond double kill” scenario. Against this backdrop, the ETF (Exchange-Traded Fund) market faced a “late spring cold spell,” with total scale dropping nearly 150 billion yuan in one week. Gold ETFs, once favored by funds, experienced a “free fall,” shifting from the previous weeks’ “growth king” to last week’s “shrinkage king,” providing investors with a vivid lesson on risk.

Under the dual pressures of stock market volatility and commodity asset adjustments, investors’ risk appetite significantly decreased. Funds withdrew from high-volatility products and returned to cash-equivalent ETFs for safety.

Money Market ETFs Grow Against the Trend

Last week, the market saw a “stock-bond double kill,” and commodity ETFs also underwent significant weekly adjustments. In this context, excluding money market ETFs, which grew by 3.059 billion yuan, all other major categories of ETFs declined. The total ETF scale shrank by nearly 150 billion yuan, returning to 5.1 trillion yuan. According to Wind data, as of March 21, eight new ETFs were launched last week, including seven equity ETFs and one cross-border ETF. The total number of listed ETFs reached 1,456.

In terms of specific scale changes, last week, equity ETFs and cross-border ETFs shrank by 110.251 billion yuan and 14.220 billion yuan respectively, with continued outflows from equity products. Commodity ETFs, previously favored as safe havens, also shrank by 27.749 billion yuan last week, with many investors cashing out their previous gains. Bond ETFs saw a slight decrease of 756 million yuan. Money market ETFs were the only major category to grow last week, increasing by over 3 billion yuan, as funds moved from high-volatility products to safer assets.

Since the beginning of the year (up to March 21), the total ETF scale in the market has shrunk by over 926.5 billion yuan, with stock ETFs down 896.045 billion yuan, bond ETFs down 95.148 billion yuan, and cross-border ETFs down 17.955 billion yuan. Notably, despite the deep adjustments last week, commodity ETFs have still increased by 81.719 billion yuan this year, and money market ETFs have slightly grown by 899 million yuan.

“Growth King” Turns into “Shrinkage King”

Regarding ETFs linked to indices, the scale of ETFs tracking major indices shrank again last week. Among the top 20 indices, only four saw growth in their ETF scale.

Specifically, the four leading ETFs that increased last week were those tracking the SSE 50, China Internet 50, Low-Volatility Dividends, and Hong Kong Stock Connect Innovative Drug indices. Among these, only the SSE 50 ETF grew by more than 1 billion yuan.

It is worth noting that last week, the SGE Gold 9999 ETF linked to gold shrank by over 24 billion yuan. From being the “growth king” multiple times this year, it became the “shrinkage king” last week, providing a vivid lesson: gold as a safe-haven asset is not risk-free, and its volatility can be significant.

Additionally, two other index-linked ETFs shrank by over 10 billion yuan: the CSI A500 ETF (down 13.825 billion yuan) and the segmented chemical industry ETF (down 11.974 billion yuan). The segmented chemical ETF, which had been growing steadily this year, experienced its first major weekly adjustment, largely in sync with gold products. The CSI 300 ETF linked to the index also shrank by over 6 billion yuan last week.

Year-to-date, the CSI 300 ETF linked to the index has shrunk by 619.071 billion yuan, with the latest scale at 566.486 billion yuan. The ETFs tracking the CSI 1000 and SSE 50 indices have shrunk by 135.664 billion yuan and 106.969 billion yuan respectively this year. Despite these large weekly declines, ETFs linked to SGE Gold 9999, segmented chemicals, and the Hang Seng Tech Index have still grown by over 100 billion yuan each this year, at 66.138 billion yuan, 23.943 billion yuan, and 17.479 billion yuan respectively.

Institutional Management Scale Changes

In terms of management institutions, among the top 20 managers, only two saw ETF scales grow last week, while seven institutions experienced outflows exceeding 10 billion yuan. In rankings, BOCOM Fund, Hua An Fund, and Penghua Fund each dropped one position due to significant shrinkage. GF Fund surpassed BOCOM Fund to rank 8th, Hwabao Fund overtook Hua An Fund to re-enter the top 10, and Huitianfu Fund replaced Penghua Fund at 15th.

Regarding scale changes, two institutions saw growth. The most notable was HFT Fund, whose ETF scale increased by 5.453 billion yuan last week, and Yinhua Fund, which grew slightly by 170 million yuan, performing relatively well.

Last week, Hua Xia Fund’s ETF scale shrank by 22.856 billion yuan. Six other institutions also saw declines exceeding 10 billion yuan, including Guotai Fund, E Fund, Hua An Fund, Penghua Fund, Southern Fund, and BOCOM Fund, which hold relatively large gold ETF scales. Additionally, GF Fund and Harvest Fund also experienced significant reductions.

Year-to-date, Guotai Fund, HFT Fund, BOCOM Fund, and Hua An Fund have each increased their ETF scales by over 100 billion yuan, at 27.731 billion yuan, 22.086 billion yuan, 13.235 billion yuan, and 13.023 billion yuan respectively. Conversely, Hua Xia Fund, E Fund, and Huatai-PineBridge Fund saw declines exceeding 200 billion yuan, at 253.642 billion yuan, 231.114 billion yuan, and 206.815 billion yuan. Southern Fund and Harvest Fund also shrank by 128.622 billion yuan and 113.496 billion yuan respectively.

Gold ETF Collective Shrinkage

In terms of top ETF products, last week saw a scene of widespread decline, with only two products among the top 20 increasing in scale. Due to varying degrees of shrinkage, the rankings of many gold ETFs changed significantly. For example, the Bosera Gold ETF dropped from 11th to 13th place, and the Guotai Gold ETF fell by one rank; the Harvest Internet ETF (Hong Kong Stock Connect) also dropped from 7th to 9th.

Specifically, China Asset Management’s SSE 50 ETF and E Fund’s China Concept Internet ETF were the only two among the top 20 to see scale growth last week, increasing by 1.3 billion yuan and 201 million yuan respectively.

Gold ETFs experienced a large-scale decline last week, with Hu’an Gold ETF shrinking by 10.667 billion yuan, making it the only product to shrink by over 10 billion yuan. Other gold ETFs, including Guotai, Bosera, E Fund, and the Hong Kong Stock Connect Internet ETF, all shrank by over 3 billion yuan.

Year-to-date, despite the overall decline last week, three gold ETFs still increased by over 100 billion yuan: Hu’an Gold ETF, Guotai Gold ETF, and Bosera Gold ETF, with increases of 23.37 billion yuan, 13.518 billion yuan, and 10.322 billion yuan respectively. E Fund Gold ETF also grew by 8.702 billion yuan this year.

It is noteworthy that five products have shrunk by over 1 trillion yuan this year, including CSI 300 ETF (Huatai-PineBridge), CSI 300 ETF (E Fund), CSI 300 ETF (Hua Xia), SSE 50 ETF (Hua An), and CSI 300 ETF (Harvest), with declines of 2,166.72 billion yuan, 1,594.45 billion yuan, 1,367.43 billion yuan, 1,053.52 billion yuan, and 1,021.83 billion yuan respectively.