Market volatility, yet fund companies rush to file new products - which themes are heavily deployed?

Why is AI regulation slowing down the approval of popular ETFs? What risk considerations are involved?

Cailian Press, March 23 (Reporter Zhou Xiaoya) Despite a general pullback in the A-share market, the enthusiasm for reporting new fund products remains high.

One of the directions for new product filings is grid equipment. Recently, more than 10 fund companies have reported clustered filings of index products related to power grid equipment, marking the second wave of concentrated layout in this sector this year. Capital also shows strong interest in this track, with existing funds growing from around 3 billion yuan to over 30 billion yuan this year, surpassing the 300 billion yuan mark.

In addition, several fund companies are simultaneously deploying in sectors such as construction machinery, electricity, industrial non-ferrous metals, and others. Some are also shifting focus to more volatile Hong Kong tech stocks or continuing to strengthen positions in sectors like CSI 300 and dividend strategies to address product “shortcomings.”

Power Grid Equipment ETFs See Another Clustered Filing

As the “HALO” strategy draws market attention to the appeal of utilities and power sectors, fund companies are also engaging in concentrated layout.

According to the China Securities Regulatory Commission (CSRC) official website, recently, 11 new products related to power grid equipment funds have been filed, of which 8 are ETFs, 2 are linked funds, and 1 is an off-exchange index fund.

Specifically, Huabao Fund, Penghua Fund, Huitianfu Fund, Southern Fund, ICBC Credit Suisse Fund, Bosera Fund, Ping An Fund, and GF Fund have all filed for Hang Seng A-Share Power Grid Equipment ETFs; E Fund and GF Fund, which already have related ETFs established, have filed for ETF-linked funds; China Merchants Fund has filed for an off-exchange launched fund.

All these products track the same index—the Hang Seng A-Share Power Grid Equipment Index. Public information shows that this index comprises up to 50 listed companies in Shanghai, Shenzhen, and Beijing involved in power grid and related equipment, reflecting the performance of mainland-listed companies related to power grid equipment. It is calculated using a free-float market capitalization weighting method, with each component stock’s weight capped at 10%.

This index has performed remarkably this year, rising nearly 40% at one point. Although recent A-share market adjustments have tempered its gains, as of March 23 close, the index’s year-to-date increase still reached 18.01%. Currently, three ETFs are linked to this index: Guotai Hang Seng A-Share Power Grid ETF and GF Hang Seng A-Share Power Grid ETF, both established in 2024 and receiving net capital inflows this year; and E Fund’s Hang Seng A-Share Power Grid ETF, established in mid-February, which exceeded 1.5 billion yuan in scale by March 20.

In fact, this is not the first time this year that multiple power grid equipment funds have been filed simultaneously. Choice data shows that Huabao Fund, Penghua Fund, Bosera Fund, and Huitianfu Fund filed for power grid ETF products in January and February, but their application statuses remained “received” without further updates. Over a longer period, since November last year, fund managers have been submitting filings for power grid ETFs, but approval progress has been stalled.

As of now, except for E Fund’s Hang Seng A-Share Power Grid ETF, which was approved and established this year, most other filings remain in the “received” status.

Industry insiders reveal that although market enthusiasm is high, regulatory authorities have been cautious in approving related products, possibly due to the overall high valuation of the index, and have deliberately slowed approval processes to prevent overheating. Fund managers may also proactively slow down the submission of new products in hot sectors.

The strong performance of existing products reflects market enthusiasm for power grid equipment themes. As the earliest established ETF in this sector, Huaxia CSI Power Grid Equipment ETF’s assets under management have grown from 3.888 billion yuan to over 30 billion yuan this year, leading the market with net inflows of 137.29 billion units.

Other Sectors Like Non-Ferrous Metals, Oil & Gas, and Dividends Also See Concentrated Deployment

Before the power grid sector, non-ferrous metals ETFs also gained market popularity, becoming another focus for fund companies’ filings this year. Similar to the power grid ETFs, multiple fund companies reported new non-ferrous metals ETF products in January, but their approval status also remained “received.”

Since March, after sector corrections, some fund companies have resumed filings. As of March 16, five fund companies—Huatai-PineBridge, GF Fund, Guotai, E Fund, and Pudong Development Bank’s Ansheng—have updated their approval statuses for non-ferrous metals ETFs, with “acceptance notices” issued. Additionally, Industrial Securities Fund and Xin Yuan Fund filed for non-ferrous metals off-exchange index funds, and Bosera Fund filed for a non-ferrous metals ETF linked fund, with approval progress updated accordingly.

On the same day, Bank of China Fund filed for CSI Industrial Non-Ferrous Metals ETF, and Invesco Great Wall Fund filed for a CSI Metals & Mining ETF launch-linked fund. The sector has experienced volatility this year, with the CSI Industrial Non-Ferrous Metals Index’s gains wiped out by March 23.

Oil and gas theme funds also saw filings from 12 fund companies this year. After a concentrated filing phase in February, since March, Southern Fund filed for an oil & gas ETF, Huaxia Fund and E Fund filed for oil & gas ETF linked funds, and GF Fund filed for an off-exchange oil & gas index fund.

Previously, several oil & gas-themed products had been approved this year, with six ETFs already issued. Most have a scale around 200 million yuan, indicating seed planting for future growth.

Dividend-themed products continue to be actively filed by fund companies. So far this year, 17 fund companies have reported new dividend-related products, with product lines becoming more segmented—some focusing on factors like low volatility and dividend quality, while others target specific markets such as Hong Kong stocks, China A-shares, or Chinese state-owned enterprises. Some fund companies are also actively filing for active equity dividend products.

In Hong Kong stock products, information technology themes have attracted multiple fund companies. Eight fund companies have filed for CSI Hong Kong Stock Connect Information Technology ETFs this year, with some filings made in February and then refiled in March. Approval updates show that Huaxia Fund and E Fund’s filings in early February have been approved and are currently being issued; additionally, on March 9, approval notices were issued for five Hong Kong Stock Connect Information Technology ETFs.