How significant has the recent "redeem upon break-even" phenomenon been? By examining the subscription and redemption patterns of equity ETFs (excluding cross-border ETFs investing in overseas markets), it's clear that as market sentiment has warmed, equity ETFs have maintained net redemption trends for four consecutive months. During this period, the equity ETF issuance market showed slight recovery, but frequent post-listing redemptions meant that new fund launches contributed insignificantly to total share growth. Year-to-date net outflows from the equity ETF market reached 33.959 billion yuan.

Broad-based ETFs, once the primary capital magnets, have become the main equity ETF category experiencing recent redemptions, with year-to-date net outflows (173.048 billion yuan) far exceeding the total outflows from the entire equity ETF sector. The KeShi 50 ETF, which has shown notable recent gains, is being heavily sold off, ranking among the top for net redemptions.

Behind this phenomenon, fund company personnel note that investors who have just broken even or are close to breaking even frequently engage in redemption behavior. This stems from both the psychological relief of breaking even after enduring book losses for extended periods, and intense fear of repeating past mistakes—worrying that market declines will again wipe out gains. This "psychological reversal" often leads to significantly increased redemption impulses.

However, it's worth noting that following yesterday's market correction, some broad-based ETFs are once again attracting capital.

**ETF New Issuance Market: Modest Recovery**

A recent research report mentioned that as markets strengthened, sample public fund net redemption rates rose significantly, with last week's net subscription-redemption rates exceeding 2024 averages. The equity ETF market has shown similar trends.

As August draws to a close, the ETF new issuance market shows signs of "recovery." Based on fund establishment dates, Choice data shows that as of August 25, 23 new equity ETFs were established in August, with combined issuance shares totaling 14.428 billion. This marks the second consecutive month of recovery in new equity ETF establishment scale.

Previously, new equity ETF issuance reached 13.873 billion yuan and 10.728 billion yuan in July and June respectively. On average, ETFs established since August averaged 627 million shares each, a significant increase from last month's 434 million yuan average.

This also represents the third-highest level year-to-date, with February still holding the monthly peak for new equity ETF averages at 1.191 billion yuan.

However, newly issued funds continue to experience significant shrinkage after listing. Data shows that as of August 25, the combined shares of the aforementioned 23 new funds totaled 12.95 billion, a decrease of 11.41%.

**Existing ETF Market: Redemption Trends Persist**

Redemptions aren't limited to newly issued funds. While China's ETF scale has officially entered the 5 trillion yuan era, growth in equity ETF scale has come more from fund net asset value recovery.

Choice data shows that as of August 26, equity ETFs experienced net redemptions of 7.803 billion shares in August, with estimated net redemption scale of 11.083 billion yuan. Monthly data indicates this is the fourth consecutive month of net redemptions for equity ETFs. The latest total shares for equity ETFs stand at 1.98 trillion, with combined scale of 3.45 trillion yuan, representing a 342.515 billion yuan increase from July-end.

Equity ETFs switched from net subscriptions to net redemptions as early as May. Choice data shows that from May to July, equity ETFs experienced net redemptions of 36.579 billion shares, 11.253 billion shares, and 51.4 billion shares respectively.

China Securities Investment Fund Association data shows similar trends, with equity funds represented by equity ETFs decreasing by 11.465 billion shares in July to 3.44 trillion shares at month-end.

Over a longer timeframe, equity ETFs have experienced net redemptions of 68.943 billion shares year-to-date, with combined net redemption scale of 33.959 billion yuan. Previously, annual net redemptions for equity ETFs occurred in 2017, while from 2022 to 2024, annual net subscriptions for equity ETFs were at hundred-billion yuan levels.

**Main Redemption Direction: Broad-Based ETFs**

Whether looking at monthly or year-to-date figures, the KeShi 50 ETF has been the most redeemed product in this round. Choice data shows that since August, Huaxia KeShi 50 ETF has experienced net redemptions of 17.424 billion shares, meaning this ETF lost over 20% of its fund shares in less than a month.

Compared to year-end fund shares, this ETF has experienced total net redemptions of 26.528 billion shares, with net outflows of 31.05 billion yuan. Currently, the ETF's latest fund shares total 62.584 billion, with year-to-date share shrinkage of 29.77%, and recent shares nearly falling to two-year lows.

Behind the redemptions, this product, primarily held by individual investors, experienced consecutive net subscriptions during previous net asset value correction periods, with total fund shares once climbing to 112.5 billion in October last year, when the KeShi 50 experienced a rebound after stage bottoming.

Year-to-date, the ETF has achieved net returns of 28.11%, but due to fund share shrinkage exceeding this level, its latest scale has slightly declined to 83.619 billion yuan.

However, following yesterday's market correction, Huaxia KeShi 50 ETF again experienced net subscriptions, with daily fund shares increasing by 140 million, marking the highest net subscription day since mid-August.

Additionally, Guolian An Semiconductor ETF also experienced net redemptions of 5.04 billion shares in August. Chip ETFs, ChiNext 50 ETFs, pharmaceutical ETFs, and defense ETFs also experienced significant net redemptions in August.

By category, broad-based ETFs have become the main redemption direction. Data shows broad-based ETFs saw fund shares decrease by 43.971 billion in August, with combined net outflows of approximately 41.585 billion yuan.

Year-to-date, broad-based ETF net outflows have reached 173.048 billion yuan, with total fund shares decreasing by nearly 200 billion. However, due to year-to-date net asset value growth, broad-based ETF total scale has maintained growth momentum, with current total scale of 2.44 trillion yuan, an increase of 236.351 billion yuan from year-end.