The ETF market continued its robust expansion with scale increasing by more than 30% in the third quarter. By the end of September, total ETF assets under management exceeded 5.6 trillion yuan, with non-monetary ETF assets reaching 5.47 trillion yuan. During the third quarter, non-monetary ETF assets grew by 1.33 trillion yuan, representing an increase of over 30%. The number of 100-billion-yuan-scale ETFs increased to 117 by the end of Q3, up from 81 at the end of Q2, adding 36 new products to this elite tier.
**36 New ETFs Join the 100-Billion-Yuan Club**
Behind the emergence of new 100-billion-yuan ETFs, capital demonstrated its tactical approach of buying low and selling high. Among the newcomers to the 100-billion-yuan category, E Fund CSI Hong Kong Securities Investment Theme ETF showed the largest scale increase. By the end of September, this ETF's assets reached 343.53 billion yuan, up from 97.03 billion yuan at the end of June—an increase of 246.51 billion yuan, more than tripling in size.
Newly established technology bond ETFs in Q3 made significant contributions, with 16 products surpassing the 100-billion-yuan threshold, accounting for nearly half of the new entrants. Among these, Harvest CSI AAA Technology Innovation Corporate Bond ETF led Q3 technology bond ETF growth with an increase of 210.79 billion yuan.
Equity ETFs also demonstrated remarkable performance. Penghua CSI Segmented Chemical Industry Theme ETF's assets surged from 14.15 billion yuan at the end of June to 185.43 billion yuan by the end of September—an increase of more than 12 times. Other notable performers included GF CSI Hong Kong Stock Connect Non-Bank Financial Theme ETF, China Universal CSI Hong Kong Stock Connect Innovative Pharmaceutical ETF, GF CSI New Energy Vehicle Battery ETF, and E Fund CSI Robot Industry ETF, all experiencing asset growth exceeding 100 billion yuan during Q3. Southern CSI SWHY Non-ferrous Metals ETF approached 100 billion yuan in growth.
However, amid overall growth, two ETFs dropped out of the 100-billion-yuan tier. Invesco Great Wall CSI A500 ETF's assets declined from 115.27 billion yuan at the end of June to 71.37 billion yuan by September-end, a decrease of 43.9 billion yuan. Tianhong CSI 300 ETF also temporarily fell below the 100-billion-yuan mark, ending September with 91.6 billion yuan in assets, down 8.8 billion yuan from June.
**Broad-Based ETFs Face Redemptions, STAR 50 Shows Notable Outflows**
The appearance of new 100-billion-yuan ETFs reflected capital's continued strategy of profit-taking at highs and value-hunting at lows. Data shows that while non-monetary ETFs added 289.446 billion shares in Q3, broad-based ETF shares decreased by 148.223 billion shares.
STAR 50 became the primary direction of capital outflows. China AMC SSE STAR Market 50 ETF experienced the largest net redemptions, with 31.118 billion shares redeemed in Q3, causing assets to shrink by 77.18 billion yuan. Overall, STAR 50-linked broad-based ETFs faced net redemptions exceeding 50 billion shares. Besides China AMC STAR 50 ETF, E Fund STAR 50 ETF also experienced net redemptions exceeding 10 billion shares. STAR 50 ETFs gained approximately 48% in Q3, prompting continuous profit-taking by investors.
Similar patterns emerged in ChiNext-tracking ETFs. Huaan ChiNext 50 ETF and E Fund ChiNext ETF both experienced net redemptions exceeding 5 billion shares in Q3. Additionally, E Fund STAR Innovation ETF, one of Q3's best-performing broad-based ETFs, saw net redemptions of 1.857 billion shares.
CSI A500-linked broad-based ETFs faced net redemptions of 31.667 billion shares. While ETFs from E Fund, Huatai-PineBridge, Fuguo, and Southern still attracted net inflows, products from Harvest, Invesco Great Wall, GF, China Merchants, Taikang, and ICBC Credit Suisse experienced net redemptions exceeding 3 billion shares each.
Conversely, broad-based ETFs tracking small-cap indices like STAR 200 and CSI 2000 received overall net inflows. For instance, STAR 200 ETFs from Huatai-PineBridge and Fuguo both attracted net inflows exceeding 300 million shares. Compared to ChiNext 50 and STAR 50, STAR 200 ETFs showed more modest Q3 gains of around 33%, and small-cap indices typically offer greater elasticity, making them periodically attractive to investors.
**Securities and Chemical ETFs Most Favored**
Unlike the overall redemption trend in broad-based ETFs, thematic ETFs became the primary destination for capital inflows. Thematic index ETFs added 131.851 billion shares in Q3, while sector index ETFs collectively gained 84.415 billion shares.
At the individual product level, bargain-hunting behavior was particularly evident. Huabao CSI Securities Companies ETF attracted the highest net inflows in Q3, with fund shares increasing by 37.934 billion. During this period, the securities sector rallied on the second-to-last trading day of September, but gained only 11% for the entire quarter.
Fuguo CSI Hong Kong Stock Connect Internet ETF received net inflows of 36.955 billion shares, doubling its assets to 976.52 billion yuan by Q3-end, with the product's net asset value rising over 20% during the period.
Penghua CSI Segmented Chemical Industry Theme ETF also attracted net inflows of 23.101 billion shares, with assets soaring from 14.15 billion yuan at June-end to 185.43 billion yuan by September-end. The fund's net asset value gained over 26% in three months, slightly outperforming passive index funds.
Other products experiencing net inflows exceeding 10 billion shares in the past three months included Cathay CSI Securities Companies ETF, Huabao CSI Hong Kong Stock Connect Internet ETF, China AMC Hang Seng Tech ETF, Penghua CSI Liquor ETF, Huatai-PineBridge Hang Seng Tech ETF, Huabao CSI Banking ETF, and China AMC Hang Seng Internet Technology ETF.