On December 30th, the Shanghai Composite Index achieved a remarkable 10-day winning streak, approaching the 4000-point mark, with the two markets recording a turnover of 2.14 trillion yuan, surpassing the 2 trillion threshold for three consecutive trading sessions, indicating sustained market fervor as the year draws to a close.
The brokerage sector showed relative intraday activity; the top-tier Broker ETF (512000) consolidated narrowly below the waterline during the morning session, experienced an upward pulse driven by popular sectors in the afternoon, and retreated by the close with high-frequency premiums within its range, signaling aggressive buying interest from investors.
Performance diverged among the 49 constituent stocks in the sector, with Hualin Securities leading gains by over 3%, Huaxin Co., Ltd. rising more than 1%, followed by Jinlong Co., Ltd., East Money Information Co.,Ltd., and Industrial Securities Co., Ltd.; on the downside, Guotai Junan Securities and Haitong Securities fell over 1%, with CITIC Securities, China International Capital Corporation Limited, and China Galaxy Securities also declining. Since the start of 2025, major A-share indices have surged significantly, with trading volume and margin financing remaining elevated; however, the brokerage sector, often dubbed the "bull market bellwether," has exhibited sluggish performance. As of December 30th, the CSI All Share Securities Companies Index, tracked by Broker ETF (512000), has gained a mere 3.04% year-to-date, significantly underperforming the broader market, while its price-to-book ratio (PB (LF)) stands at 1.5 times, positioned at a low-to-mid level of just the 41.19th percentile over the past decade. This stagnation presents a stark contrast to the sector's robust earnings growth, highlighting a pronounced divergence.
Note: Broker ETF passively tracks the CSI All Share Securities Companies Index, which has a base date of June 29, 2007, and was launched on July 15, 2013. The index's annual gains/losses from 2020 to 2024 were 16.55%, -4.95%, -27.37%, 3.04%, and 27.26%, respectively. The index's constituent stocks are adjusted according to its compilation methodology, and its historical performance does not indicate future results. Q3 reports also revealed that public funds' allocation to traditional brokerages was only 0.52%, indicating a severe underweight position. With the release of the "Guidelines for Performance Benchmarks of Publicly Offered Securities Investment Funds (Draft for Comments)," the probability of increased allocations from public funds in the future appears substantial.
Simultaneously, the brokerage sector is poised to benefit from multiple positive catalysts. China International Capital Corporation Limited (CICC) pointed out that industry optimization, intrinsic stability, and an uplift in profit margins will effectively drive the long-term配置 value of the brokerage sector, suggesting that investing in high-quality Chinese brokerages is timely. 1) Regulatory emphasis on fostering strong players and restricting weaker ones, heightened professional requirements for emerging businesses, and an accelerated pace of industry consolidation will propel increased market concentration and foster both comprehensive and specialized development; 2) Leading brokerages are achieving greater balance in their business structures across equities/bonds, primary/secondary markets, institutional/retail clients, capital-intensive/fee-based services, domestic/international operations, and on-exchange/off-exchange activities, while their balance sheet usage is shifting from seeking volatility towards risk neutrality, resulting in more stable earnings; 3) The industry's increased focus on high-quality development, coupled with expectations for enhanced balance sheet management capabilities and long-term leverage growth among leading players, alongside optimized cost structures, is set to improve long-term Return on Equity (ROE) and dividend yields.
Looking ahead to 2026, Bank of China Securities expressed optimism about the upside potential for brokerage sector valuations. Ongoing regulatory reinforcement of the financial sector's functional importance outlines a path for capital market reform and high-quality industry development in 2026; against a backdrop of rising industry景气度, the sector's long-term valuation midpoint is expected to rise.
China Galaxy Securities stated that national policy objectives of "stabilizing growth and the stock market" and "boosting the capital market" will continue to shape the sector's trajectory, with factors such as sustained appropriately loose liquidity, continuous optimization of the capital market environment, and the rebuilding of investor confidence collectively driving an uptick in the brokerage sector's景气度. Current sector valuations reside at historically low levels, offering a defensive stance with rebound potential, balancing offense and defense.
When there's a market rally, buy brokerages! Broker ETF (512000) and its feeder fund (Class A 006098; Class C 007531) passively track the CSI All Share Securities Companies Index, providing a single-ticket investment encompassing 49 listed brokerage stocks, serving as an efficient tool for concentrating exposure to leading brokers while also covering mid-sized and small brokers. Broker ETF (512000) boasts an average daily turnover exceeding 1 billion yuan year-to-date, ranking it among the top-tier brokerage ETFs in terms of A-share liquidity.
Reminder: Recent market volatility may be significant; short-term price movements do not预示 future performance. Investors must invest rationally based on their own financial situation and risk tolerance, paying close attention to position sizing and risk management.
Data sourced from the Shanghai and Shenzhen Stock Exchanges, public information, etc. Risk Disclosure: The above products are issued and managed by the fund manager; selling agencies do not assume responsibility for the investment, redemption, and risk management of the products. Investors should carefully read the "Fund Contract," "Prospectus," "Fund Product Summary," and other legal fund documents to understand the fund's risk-return characteristics and choose products that match their own risk tolerance. Past performance of a fund does not indicate its future results; fund investment carries risks! Selling institutions (including the fund manager's direct sales channels and other selling institutions) assess the risk of this fund according to relevant laws and regulations. Investors should promptly pay attention to the appropriateness opinions issued by the fund manager. Appropriateness opinions from various selling institutions may not necessarily be consistent, and the risk rating results for the fund product issued by fund selling institutions shall not be lower than the risk rating results determined by the fund manager. Discrepancies may exist between the fund's risk-return characteristics as described in the fund contract and its risk rating due to different consideration factors. Investors should understand the fund's risk-return profile and cautiously select fund products based on their investment objectives, horizon, experience, and risk tolerance, bearing their own risks. The China Securities Regulatory Commission's registration of the aforementioned funds does not constitute a substantive judgment or guarantee of their investment value, market prospects, or returns. Fund investment requires caution.
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