Ahead of the Dragon Boat Festival, major stock indices collectively rebounded, yet stock and cross-border ETFs in the Shanghai and Shenzhen markets saw a combined net outflow of 69.817 billion yuan.
From a sector perspective, ETFs related to semiconductor equipment, non-ferrous metals, and consumer electronics attracted capital inflows, while those tied to power grid equipment and chips were heavily sold off by investors.
Nearly 70 Billion Yuan Exits via ETFs
Total trading volume for the Shanghai and Shenzhen markets this week reached 12.5 trillion yuan, with 5.74 trillion yuan from Shanghai and 6.76 trillion yuan from Shenzhen. At the latest close, the Shanghai Composite Index stood at 4090.48 points, rising 1.46% for the week, while the Shenzhen Component Index closed at 16030.70 points, gaining 7.13% over the same period.
Data shows that stock and cross-border ETFs in the two markets recorded a combined net outflow of 69.817 billion yuan this week. Broad-based index ETFs saw a net outflow of 56.2 billion yuan, thematic sector ETFs had a net outflow of 11.9 billion yuan, and cross-border ETFs experienced a net outflow of 8.192 billion yuan.
A breakdown of major broad-based index fund flows indicates that ETFs tracking the CSI 300 Index saw a net outflow of 42.1 billion yuan this week, while those tracking the STAR 50 Index had a net outflow of 5.895 billion yuan.
Specifically, the ten largest broad-based ETFs by size collectively recorded a net outflow of 47.583 billion yuan. Among them, the Huatai-PineBridge CSI 300 ETF and the E Fund CSI 300 ETF each saw net outflows exceeding 10 billion yuan.
Some brokerages have commented that with relatively favorable technical and sentiment indicators, the broader market has largely stabilized and is trending positively. However, as major indices face resistance near previous highs, the market may experience repeated fluctuations to absorb selling pressure from positions held at higher levels. Additionally, patience is required for a new market theme to emerge that can take over the leadership from the current focus on hard tech, as excessive concentration in the technology sector could otherwise lead to increased market volatility.
Red-Hot Chip Sector Continues to See Capital Outflows
Among thematic sector ETFs, 24 funds saw net inflows exceeding 100 million yuan this week. Notably, the Guotai AMC Semiconductor Equipment ETF, the Wanjia Industrial Non-ferrous Metals ETF, and the China Southern Non-ferrous Metals ETF saw their units outstanding increase by 2.106 billion, 621 million, and 458 million units respectively, translating to net inflows of 3.06 billion yuan, 1.09 billion yuan, and 939 million yuan.
On the outflow side, 71 thematic sector ETFs experienced net outflows of over 100 million yuan. Specifically, the ChinaAMC Power Grid Equipment ETF, the ChinaAMC Semiconductor Chip ETF, and the Harvest STAR Board Semiconductor ETF saw their units outstanding decrease by 743 million, 442 million, and 204 million units respectively, resulting in net outflows of 1.567 billion yuan, 1.175 billion yuan, and 820 million yuan.
This week, chip-related concept stocks surged, yet associated ETFs continued to be sold off by investors.
However, some market views suggest that the global expansion in AI computing demand has exceeded the capacity limits of any single supplier. The diversification of chip manufacturing capacity is expected to accelerate, driving a sustained uptick in the business cycle for upstream equipment, materials, and design segments. The production capacity bottleneck at Taiwan Semiconductor Manufacturing (TSM) is seen as opening a window of opportunity for global second-tier foundries and China's domestic chip industry chain. Domestic AI chip design companies are anticipated to capture more incremental demand in areas like custom inference chips and high-speed interconnects.
Furthermore, it is projected that the memory industry will struggle to form large-scale, effective new supply by 2026. This trend is expected to continue impacting upstream semiconductor equipment and packaging & testing sectors, with potential beneficiaries including domestic memory chip designers, memory module manufacturers, semiconductor equipment makers, and packaging & testing firms.
19 ETFs Record Weekly Turnover Exceeding 10 Billion Yuan
This week, 19 stock and cross-border ETFs achieved a weekly turnover surpassing 10 billion yuan each. Among them, the Huatai-PineBridge China-Korea Semiconductor ETF saw a weekly turnover nearing 50 billion yuan.
The technology sector experienced a broad-based surge this week, with ETFs tracking the ChiNext and STAR 50 indices reaching new all-time highs.
On the news front, in mid-June, the ChiNext Index completed its semi-annual rebalancing, adding high-quality companies in sectors like computing power optical components and semiconductor equipment, while removing biotechnology stocks experiencing a downturn in their business cycle. Following the adjustment, the weighting of strategic emerging industries within the index has increased to 92%.
9 ETFs Scheduled for Launch Next Week
The top holdings of mutual funds are always a focal point for investors. However, the disclosure of actively managed fund holdings typically involves a lag. In contrast, the investment targets of ETFs are very clear. By tracking newly listed ETFs, investors can often identify recent market hotspots and individual stocks in favor, and the incremental capital brought by these new ETFs is also noteworthy.
Currently, two ETFs have disclosed plans to list next week, tracking the green power and rare metals themes.
Additionally, nine ETFs have disclosed plans for issuance next week, tracking themes including STAR Board chip design, STAR Board artificial intelligence, livestock farming, low-volatility high-dividend stocks, ChiNext new energy, and rare metals.
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