In July, wide-base ETFs became a key channel for capital entering the market. According to Wind data, as of press time, total net inflows into wide-base ETFs across the market reached 326.904 billion yuan in July, setting a new monthly record for the year. From January to June, wide-base ETFs experienced net outflows each month, but July saw a robust reversal.
Capital actively positioned in equity assets through index funds, with ETFs tracking indices like the Sci-Tech 50 and ChiNext seeing active trading, as funds continued to channel into the tech-growth theme. By index, ETFs linked to the Sci-Tech 50 index recorded total net inflows of 74.817 billion yuan, ranking first among all wide-base indices. Those tracking the ChiNext index saw net inflows of 50.183 billion yuan, while ETFs for the CSI 300, CSI A500, and CSI 1000 attracted 45.410 billion yuan, 43.737 billion yuan, and 43.503 billion yuan, respectively.
In terms of individual products, the "siphoning effect" of leading wide-base ETFs was evident. Since July, the Sci-Tech 50 ETF by China Asset Management saw net inflows of 44.681 billion yuan, pushing its scale past the 90 billion yuan mark. The ChiNext ETF by E Fund recorded net inflows of 39.331 billion yuan, increasing its scale to 71.856 billion yuan. The CSI 300 ETF by Huatai-PineBridge saw net inflows of 34.818 billion yuan, reaching a scale of 122 billion yuan, and it remains the only ETF in the market with a scale above 100 billion yuan. The scales of these three ETFs increased by 32.86%, 57.08%, and 32.78%, respectively, compared to the start of the month.
Sun Heng, Director of the Morningstar (China) Fund Research Center, noted that this round of capital inflows into wide-base ETFs exhibits distinct characteristics: First, a contrarian approach—buying on dips, with accelerated capital entry amid tech sector pullbacks, contrasting with net outflows in the first half of the year. Second, a focused direction, with tech-growth wide-base ETFs like the Sci-Tech 50 and ChiNext becoming the core of investment. Third, demand is primarily driven by institutional bottom-up allocations, as institutions use wide-base ETFs to diversify extreme sector risks. Fourth, trading volumes for leading wide-base ETFs have surged significantly, with capital prioritizing liquid benchmark products.
From a trading perspective, turnover for tech-growth ETFs has notably heated up. In July, the Sci-Tech 50 ETF by China Asset Management recorded an average daily turnover of 11.202 billion yuan, up nearly 70% from June. The ChiNext ETF by E Fund saw an average daily turnover of 9.468 billion yuan, an increase of over 60% from June. Over a longer timeframe, ETFs linked to tech-growth indices like the Sci-Tech 50 and ChiNext have seen combined net inflows of about 125 billion yuan since July, accounting for over 40% of total wide-base ETF inflows for the month.
Regarding why capital is primarily flowing into tech-growth wide-base ETFs like the Sci-Tech 50 and ChiNext, Sun Heng attributed it to these indices gathering hard-tech and innovation-growth leaders, aligning with long-term themes like AI computing power and new productive forces. After adjustments, their valuations have been digested, attracting long-term capital to invest counter-cyclically.
"ETFs offer convenient trading, low fees, and transparent holdings, making them efficient tools for quickly deploying capital into equity assets," said Yang Delong, Chief Economist at First Seafront Fund. "For individual investors, index funds help diversify stock risks. For institutional funds, ETFs serve as important vehicles for asset allocation and risk management."
Looking ahead, Nie Yixiang, Head of the Sustainable Investment Department and Fund Manager at Fidelity Fund, commented, "In the near term, our portfolio will continue to focus on areas like AI, semiconductor equipment, new energy, and their supply chains, which have long-term growth momentum. However, given the current high trading sentiment in the tech sector, we need to be cautious about phased adjustment risks from concentrated capital rebalancing. Therefore, while maintaining a growth-oriented style, we have also begun to make small defensive allocations toward value stocks to hedge against potential style shifts."
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