Market Shake-Up: Institutions Adjust Positions, 55 Sector ETFs See Heavy Inflows While Hot Semiconductor ETFs Quietly Sold Off

Deep News11-08

This week, major indices posted modest gains, with combined net inflows into domestic and cross-border stock ETFs exceeding RMB 10 billion.

Sector-wise, ETFs tracking securities brokers and power grid equipment attracted strong inflows, while semiconductor-related ETFs faced substantial outflows.

**Over RMB 10 Billion Flows into ETFs** The Shanghai and Shenzhen markets recorded a total weekly turnover of RMB 9.95 trillion (Shanghai: RMB 4.43 trillion; Shenzhen: RMB 5.52 trillion). The Shanghai Composite Index closed at 3,997.56 points, up 1.08% for the week, while the Shenzhen Component Index rose 0.19% to 13,404.06 points.

Wind data shows net inflows of RMB 106.41 billion into stock and cross-border ETFs, contrasting with RMB 195 billion in outflows from broad-based index ETFs.

Among major indices, the CSI 300 saw net outflows of RMB 88.35 billion. The top 10 broad-based ETFs collectively shed RMB 182.42 billion, led by RMB 62.11 billion outflows from CSI 300 ETFs and RMB 38.95 billion from SSE 50 ETFs.

Analysts suggest the A-share market may see more balanced sector rotations in Q4. Key recommendations include: 1. Maintaining exposure to high-growth tech and advanced manufacturing sectors. 2. Diversifying into cyclical sectors showing marginal recovery from policy support and demand stabilization.

**Sector ETF Highlights** - **Inflows**: 55 sector ETFs attracted over RMB 100 million each, with Securities Broker ETFs (+RMB 2.93 billion), Bank ETFs (+RMB 1.48 billion), and Power Grid Equipment ETFs (+RMB 1.07 billion) leading. - **Outflows**: 35 sector ETFs saw over RMB 100 million in outflows, particularly Semiconductor ETFs (RMB 1.25 billion), Semiconductor Equipment ETFs (RMB 729 million), and Chip ETFs (RMB 692 million).

Notably, the Securities Broker ETF (512880) hit a record 50 billion shares outstanding. Analysts highlight brokers' sensitivity to bull markets, with recent index gains and trading volume expansion directly benefiting commission and proprietary trading businesses.

The Power Grid Equipment ETF (159326) also reached a milestone, surpassing 1 billion shares outstanding. Strong overseas demand, especially for high-voltage equipment, continues to drive growth in this sector.

**Trading Activity** 21 stock and cross-border ETFs exceeded RMB 10 billion in weekly turnover, including the Hong Kong Securities ETF (>RMB 50 billion). The China-South Korea Semiconductor ETF and CSI 500 ETF hit record trading volumes.

With limited near-term catalysts, analysts recommend balanced exposure to dividend stocks, micro-caps, and tech trends. Sustained turnover expansion and AI-driven opportunities could revive tech sector allocations.

**Upcoming ETF Launches** Three ETFs tracking general aviation, Hong Kong internet, and fintech themes will list next week. Seven others—covering Hong Kong auto, chemicals, biotech, solar, and machinery sectors—are set to launch.

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