Can ETFs help resolve investors' "perception gap"? In April, the ChiNext Index surged impressively, briefly breaking through the 3,685-point level to set a new near-decade high. However, beneath this exuberant performance, over 80% of related individual stocks underperformed the index, leading some investors to again experience the "perception gap" of earning returns from the index but not from their stock holdings. Additionally, while the index advanced strongly, more than 10 billion yuan in capital quietly exited through ETFs, although some niche sectors like new energy saw minor net inflows.
Luo Hao, Fund Manager of the ChinaAMC ChiNext ETF, stated that the current strength of the ChiNext Index is fundamentally driven by a convergence of policy, industry, and capital factors. The primary contributors to the index's weight remain core sectors such as new energy equipment, AI hardware/optical modules, semiconductors, and high-end manufacturing. Luo Hao analyzed that this rally is better characterized as a structural revaluation rather than a broad-based surge. The key incremental funds driving the strength of heavyweight leaders are currently visible mainly as passive funds like ETFs and margin trading funds, while active institutional funds are increasingly concentrating in leading stocks.
The ChiNext Index demonstrated strong momentum in April, frequently refreshing near-decade highs. Wind data shows that on April 17, the index briefly touched 3,685.1 points during trading, marking a new high since July 2015. By the close that day, the ChiNext Index had accumulated a gain of 15.49% since the beginning of the month. At the individual stock level, performance was also robust, with 15 ChiNext stocks rising over 50% during the month. Zhangxiaoquan (301055.SZ) led with a 90.31% increase, followed by Hongjing Technology (301396.SZ) with an 84.41% gain. Baolidi (300905.SZ) and Aoni Electronics (301189.SZ) also saw increases exceeding 75% during the same period. Furthermore, 79 ChiNext stocks reached all-time closing highs since their listings this month, primarily concentrated in subsectors like electronics, machinery equipment, and power equipment. For example, Zhongji Innolight (300308.SZ) closed at 851 yuan per share on April 17, setting a new record high since its 2012 listing.
Discussing the current market trend, Liu Tingyu, Fund Manager of the Yongying ChiNext Index Fund, noted that the recent explosion in AI computing demand has boosted the performance of companies in related infrastructure sectors. Simultaneously, opportunities in the new energy sector, driven by the transition between traditional and new energy amid high oil prices and better-than-expected energy storage production schedules, have jointly propelled the ChiNext Index to new highs. Wang Lele, ETF Investment Director at Fullgoal Fund, believes that earnings momentum is the primary driver behind the ChiNext Index's rise. He explained that ChiNext Index stocks possess strong growth attributes, encompassing leading companies in sectors like new energy, optical modules, and chips. These leading companies exhibit high performance vitality, with optical module companies showing doubled earnings growth and the new energy sector also demonstrating significant earnings increases. He further stated that developments in the AI sector, coupled with heightened national energy security concerns due to conflicts such as those between the US and Iran, are expected to boost penetration rates in the new energy industry, thereby driving the fundamental strength of the ChiNext Index.
Deng Hequan, Chief Wealth Advisor at the Market Support and Management Department of China Merchants Fund, characterized the current trend as a "structural rally led by technology and growth." He believes the core feature is the market's repricing of high-quality enterprises with technological innovation capabilities and industrial upgrading potential against the backdrop of economic transformation. Regarding the sources of funds boosting heavyweight leaders, Deng analyzed that they include active allocations from domestic institutional funds, such as mutual funds and insurance capital, which are increasing their allocations to tech and growth stocks at reasonable valuations; active participation from margin trading funds, with data showing rising ChiNext margin balances indicating leverage-driven market support; and recognition from industrial capital, with some leading companies receiving increased holdings from industrial investors, reflecting optimism about development prospects within the industry.
Song Yong'an, Fund Manager of the ABC-CA ChiNext Index Fund, views the current trend as a continuation of the long-term upward logic of growth styles, driven by industrial trends and capital consensus, forming a structural bull market. He noted that as a typical large-cap growth style index, the ChiNext Index possesses strong earnings elasticity and long-term growth attributes, consistently attracting attention and allocations from mainstream institutional funds. The core driving funds are primarily institutional funds focused on long-term performance and growth sectors.
However, the flip side of the index's continuous rise is investors' "perception gap." The phenomenon of "earning index returns but not stock returns" has become a hot topic. Wind data shows that the average increase of nearly 1,400 ChiNext stocks since April is 7.71%, with only 237 stocks outperforming the index, accounting for less than 17% of the total. Deng Hequan attributed this perception gap to a mismatch between the structural characteristics of the ChiNext Index and individual investors' portfolio structures. From a trading behavior perspective, individual investors often exhibit a tendency to "buy high and sell low," taking profits too early during stock rises and hesitating to cut losses during declines, resulting in actual returns far below theoretical gains. He explained that although the ChiNext Index repeatedly hits new highs, the rise is primarily driven by a few heavyweight stocks and specific sectors. Many individual investors prefer small and mid-cap stocks and thematic concept stocks, which have lower weights in the index. When the index's advance is led by a few heavyweights, these investors' portfolios naturally struggle to keep pace.
Deng further noted that some individual investors lack a systematic investment framework, often making decisions based on short-term news and market sentiment rather than in-depth research into company fundamentals. This short-term trading approach is particularly disadvantageous in structural markets. Additionally, individual investors often overlook the impact of transaction costs, with frequent trading generating commissions and stamp duties that significantly erode long-term returns. Interviewees generally believe that the industry distribution characteristics of the ChiNext Index also exacerbate this偏差. Luo Hao mentioned that over 80% of the ChiNext Index's total market capitalization is concentrated in manufacturing, with the top ten heavyweight stocks accounting for 57% of the index's weight. This means that index gains do not equate to broad-based rises across most ChiNext stocks. He analyzed that the fundamental reason individual investors often "earn index returns but not stock returns" is typically not market distortion but a mismatch between personal holdings and the index's weight structure, compounded by potential frequent trading and chasing highs, which amplifies this偏差.
Song Yong'an also believes the core reason lies in the difficulty of accurately grasping the脉络 of structural trends this year, leading to deviations in sector and stock selection. He stated that the ChiNext Index's rise this year is highly structural, with gains concentrated in a few core sectors like power equipment, communications, and electronics, while most other sectors show平淡 or even adjustments. He added that the continuous expansion of ChiNext Index product sizes further guides incremental funds toward core heavyweight sectors and leading stocks, reinforcing the structural characteristics of the index to some extent.
So, for investors unable to accurately capture leading stocks, is directly allocating to ChiNext ETFs or ChiNext 50 ETFs the optimal solution to eliminate the "perception gap"? Deng Hequan said this is indeed an effective approach but not an absolute最优解. He explained that both ETFs can help investors achieve returns close to the index, avoiding underperformance due to poor stock selection. However, this approach has limitations: ETF returns depend entirely on index performance, meaning investors forgo the opportunity to achieve excess returns through selective stock picking. Additionally, while ETFs diversify individual stock risks, they cannot avoid systemic risks or sector concentration risks. Luo Hao remarked that for most individual investors, directly allocating to ChiNext ETFs is a clearer and more executable choice than frequently chasing hot themes and switching stocks, but it may not suit everyone. He suggested that in the current market environment, the key is not to blindly pursue short-term elasticity but to shift from stock speculation to optimizing allocations, using index tools to capture overall sector opportunities. Investors should also manage positions and maintain discipline based on their risk tolerance, employing scientific methods like systematic investment plans, grid strategies, and portfolio allocation to improve the overall risk-return ratio.
A fund research professional in South China stated that if investors are bullish on the ChiNext's long-term trend but struggle with stock selection and holding, then directly investing in ChiNext ETFs is the most straightforward solution. He also cautioned that the ChiNext Index has high volatility, and investors should plan expectations and assess risks carefully, avoiding impulsive entries based solely on sector rallies or individual stock popularity. Jin Dalai, Macro Strategy Researcher at the Equity Research Department of GE Fund, noted that the macroeconomic environment in the second quarter might lead to increased differentiation in individual stock performance, suggesting a more focused investment strategy rather than a扩散 one. Compared to last year, the market currently places greater emphasis on earnings considerations. She believes that in Q2 versus Q1, the market may also pay more attention to companies' cost control and pricing power, resulting in significant operational profit differences even within the same industry. Jin Dalai considers passive funds with more concentrated stock weights, like the ChiNext 50 ETF, as relatively better choices. Individual investors might also consider selecting thematic ETFs focused on high-growth sectors.
It is important to note that significant capital has already begun exiting ChiNext-related sectors. Wind data shows that as of April 17, there are 39 broad-based ETFs tracking ChiNext-related indices, with over 80% experiencing net redemptions this month, totaling more than 14.5 billion yuan. For instance, E Fund ChiNext ETF saw net outflows of 6.726 billion yuan since the start of the month, while Huatai-PB ChiNext 50 ETF and GF Fund ChiNext ETF recorded net outflows of 2.408 billion yuan and 1.816 billion yuan, respectively. Meanwhile, some niche sectors saw minor net inflows, such as Guotai ChiNext New Energy ETF, which attracted 62 million yuan in net inflows this month.
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