ETFs Hit by "Late Spring Cold"! Market-wide Contraction of Nearly 150 Billion Yuan Last Week

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Daily Economic News Reporter: Peng Shui Ping Daily Economic News Editor: Zhao Yun

Last week (March 16–20), the A-shares market experienced fluctuations 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 retreated last week, with the Hang Seng Index down 0.74% and the Hang Seng Tech Index down 2.12%.

Last week, both A-shares and Hong Kong stocks rose and then fell back, replaying the “double kill” of stocks and bonds. 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. Once favored by funds—gold-related ETFs—performed a “big jump off the platform,” transforming from the “king of inflows” in previous weeks to the “king of shrinkage” last week, providing investors with a vivid lesson on risk.

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

Cash ETFs Grow Against the Market

Last week, the market saw a “double kill” of stocks and bonds, and commodity ETFs also experienced significant weekly adjustments. In this context, aside from cash 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 in one week, falling back to 5.1 trillion yuan. According to Wind data, as of March 21, eight new ETFs were launched last week, including seven stock ETFs and one cross-border ETF. The total number of listed ETFs reached 1,456.

In terms of specific scale changes, stock ETFs and cross-border ETFs shrank by 110.251 billion yuan and 14.220 billion yuan respectively, indicating continued outflows from equity products. Previously favored safe-haven commodity ETFs also shrank by 27.749 billion yuan last week, with many funds cashing out their large previous gains. Bond ETFs saw a slight decrease of 756 million yuan. The only category that grew last week was cash ETFs, which increased by over 3 billion yuan, as funds moved into safer, less volatile assets.

Since the beginning of the year (up to March 21), the total ETF scale in the market shrank by over 926.5 billion yuan, including a decline of 896.045 billion yuan in stock ETFs, 95.148 billion yuan in bond ETFs, and 17.955 billion yuan in cross-border ETFs. Notably, despite last week’s deep adjustments, commodity ETFs still grew by 81.719 billion yuan year-to-date, and cash ETFs increased slightly by 899 million yuan.

“King of Inflows” Turns into “King of Shrinkage”

Regarding ETFs linked to indices, the scales of major index-linked ETFs shrank again last week. Among the top 20 indices, only four saw their ETF scales increase.

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

It’s worth noting that last week, the SGE Gold 9999 Index ETF shrank by over 24 billion yuan. From repeatedly being the “inflow king” earlier this year to becoming the “shrinkage king” last week, this provides a vivid lesson: gold as a safe-haven asset is not risk-free, and its volatility can be significant.

Additionally, two other index ETFs shrank by over 10 billion yuan: the CSI A500 Index ETF (down 13.825 billion yuan) and the Specialized Chemical Industry Index ETF (down 11.974 billion yuan). The latter, after a continuous increase earlier this year, experienced its first major weekly adjustment, roughly aligning with the decline in gold-related products. The CSI 300 Index ETF also shrank by over 6 billion yuan last week.

Year-to-date, the CSI 300 Index ETF shrank by 619.071 billion yuan, with the latest scale at 566.486 billion yuan. The CSI 1000 and SSE 50 Index ETFs shrank by 135.664 billion yuan and 106.969 billion yuan respectively. Despite these large weekly declines, ETFs linked to SGE Gold 9999, Specialized Chemical Industry, and Hang Seng Tech Index still grew by over 10 billion yuan each year-to-date, at 66.138 billion, 23.943 billion, and 17.479 billion yuan respectively.

Institutional Management Scale Changes

In terms of management institutions, with all major ETF categories adjusting last week, only two among the top 20 managers saw ETF scales grow. Seven institutions experienced weekly declines of over 10 billion yuan. Notably, BOCOM Fund, HuaAn Fund, and Penghua Fund saw their rankings drop by one position due to significant shrinkage. Wanguo Fund surpassed BOCOM Fund to rank 8th, and Huabao Fund overtook HuaAn Fund to re-enter the top 10. 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. Yinhua Fund’s ETF scale grew slightly by 170 million yuan, performing relatively well.

Last week, Huaxia Fund’s ETF scale shrank by 22.856 billion yuan. Six other institutions—Guotai Fund, E Fund, HuaAn Fund, Penghua Fund, Southern Fund, and BOCOM Fund—each saw reductions of over 10 billion yuan, mainly in their gold-related ETFs. Additionally, GF Fund and Jusheng Fund also experienced significant scale declines last week.

Year-to-date, Guotai Fund, HFT Fund, BOCOM Fund, and HuaAn Fund saw their ETF scales grow by over 10 billion yuan each, at 27.731 billion, 22.086 billion, 13.235 billion, and 13.023 billion yuan respectively. Conversely, Huaxia Fund, E Fund, and Huatai-PineBridge Fund experienced year-to-date declines exceeding 20 billion yuan, at 253.642 billion, 231.114 billion, and 206.815 billion yuan; Southern Fund and Jusheng Fund shrank by 128.622 billion and 113.496 billion yuan respectively.

Gold ETFs Shrink Collectively

In terms of top ETF products, last week saw a “muddy and chaotic” scene, 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, Boshi Gold ETF dropped from 11th to 13th place, and Guotai Gold ETF fell by one rank; also, the GF Hong Kong Internet ETF dropped from 7th to 9th.

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

Last week, all gold ETFs shrank significantly, with Huaxia Gold ETF shrinking by 10.667 billion yuan, making it the only product to lose over 10 billion yuan last week. Other major declines included Guotai Gold ETF, Boshi Gold ETF, E Fund Gold ETF, and GF Hong Kong Internet ETF, each shrinking by over 3 billion yuan.

Year-to-date, despite the overall decline last week, three gold ETFs still grew by over 10 billion yuan: Huaxia Gold ETF, Guotai Gold ETF, and Boshi Gold ETF, with increases of 23.37 billion, 13.518 billion, and 10.322 billion yuan respectively. E Fund Gold ETF also grew by 8.702 billion yuan this year.

It’s noteworthy that five products have shrunk by over 100 billion yuan this year: CSI 300 ETF Huatai-PineBridge, CSI 300 ETF E Fund, CSI 300 ETF Huaxia, Huaxia Fund’s SSE 50 ETF, and CSI 300 ETF Jusheng, with declines of 2166.72 billion, 1594.45 billion, 1367.43 billion, 1053.52 billion, and 1021.83 billion yuan respectively.

Daily Economic News