news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

Tuchong Creative/Photos provided by: Zhou Jingyu

Securities Times reporter Wu Qi

Recently, the expectation of the Federal Reserve's interest rate cut has increased sharply, and the US technology stocks have been sold off, and the Japanese stock market has also been affected. On July 12, the Asia Pacific Select ETF fell 6.49%, and the cumulative decline in three days was 14.67%. The Nasdaq Technology ETF, Nikkei ETF, and Nasdaq ETF fell 5.26%, 5.08%, and 5.05%, respectively.

With frequent premium risk warnings and intensified volatility in overseas markets, the enthusiasm for cross-border ETF speculation in China has weakened, some funds have taken profits, and the premiums of some on-site funds have also converged. The number of cross-border ETFs with premium rates exceeding 5% has been greatly reduced, and the latest premium rate of the Asia Pacific Select ETF, which was previously wildly speculated by funds, has converged to 1.62%.

Cross-border ETFs are back on track

Recently, the June CPI data released by the United States cooled down beyond expectations, and the month-on-month inflation hit a four-year low, and the Fed's expectations for rate cuts increased. After the data was released, the U.S. stock market rose first and then fell, and technology stocks once fell sharply. Although there was a rebound last Friday, it did not recover the previous losses.

Related cross-border ETFs that have performed well this year and are popular among investors have experienced a significant correction, and market speculation has weakened. On July 12, the Asia Pacific Select ETF fell 6.49%, the Nasdaq Technology ETF, the Nikkei ETF, and the Nasdaq ETF fell 5.26%, 5.08%, and 5.05%, respectively. The number of cross-border ETFs that fell by more than 3% in a single day reached 18.

The Asia Pacific Select ETF is a representative of the recent extreme speculation of cross-border ETFs by funds. As of July 9, the ETF had accumulated a rise of more than 22% in 4 trading days, and the premium rate soared to more than 22%. On July 11, the Asia Pacific Select ETF was actively traded, with a turnover rate of more than 5 times, ranking first in the market. The Asia Pacific Select ETF tracks the FTSE Asia Pacific Low Carbon Select Index, which covers the entire Asia-Pacific region, including Asia, Australia and New Zealand on the Pacific coast, and reflects the performance of large-cap companies in the low-carbon industry in the Asia-Pacific region.

However, the high premium of on-exchange funds is generally difficult to maintain for a long time. As of July 12, the Asia Pacific Select ETF fell for three consecutive days, with declines of 6.11%, 2.81% and 6.49% respectively, a cumulative decline of 14.67% in three days, and the premium rate converged to 1.62%.

Among the cross-border ETFs that fell on July 12, those tracking the Nasdaq Index and the Japanese Market Index were the majority.

Speculation suppressed

It is not difficult to find that on July 12, the decline of relevant cross-border ETFs was significantly higher than the decline of the corresponding index, which means that market speculation sentiment was suppressed and the asset price fluctuations on that day took into account pessimistic expectations for the future.

Since the beginning of the year, the stock indexes in overseas markets have performed well, such as the Nasdaq Index, the S&P 500 Index, and the Nikkei 225 Index, which have all risen by more than 17% this year. Wind data shows that as of July 12, among QDII products, a total of 51 cross-border ETFs have achieved positive returns this year, of which 20 ETFs, including the Nasdaq Technology ETF, the US 50 ETF, and the Nasdaq ETF, have risen by more than 20% this year.

The good performance has been greatly sought after by investors. More than 58 cross-border ETFs have achieved growth in share this year. For example, the shares of Invesco Great Wall Nasdaq Technology Market Value Weighted ETF, Harvest Nasdaq 100 ETF, Bosera S&P 500 ETF, Dacheng Nasdaq 100 ETF and Bosera Hang Seng Healthcare ETF increased by 4.119 billion, 2.621 billion, 2.119 billion, 1.848 billion and 1.8 billion shares respectively this year. The net fund inflow of Invesco Great Wall Nasdaq Technology Market Value Weighted ETF, Bosera S&P 500 ETF, Harvest Nasdaq 100 ETF and Dacheng Nasdaq 100 ETF all exceeded 2 billion yuan this year.

Investor demand is rising, but fund companies have limited foreign exchange quotas. Subject to foreign exchange quota restrictions, when fund companies use up their own foreign exchange quotas, QDII funds generally suspend over-the-counter subscriptions, and investors can only buy related on-exchange products, which will cause the net value of on-exchange funds to exceed the corresponding net value of over-the-counter funds, pushing up fund premium rates.

In addition, as indices such as the U.S. stock market, Japanese stock market, and Indian stock market continued to rise, these markets saw a certain money-making effect. Many participants frequently participated in the speculation of on-site ETFs, and even ignored the premium risk warnings. It cannot be ruled out that there are more speculative elements.

At present, the correction of US stocks has obviously suppressed the market's speculation sentiment. The most intuitive data shows that on July 12, there was only one fund with a premium rate of more than 5% among cross-border ETFs.

Beware of high volatility risks in U.S. stocks in the short term

In recent years, overseas assets have provided investors with relatively generous returns. However, some investors also said that it is lonely at the top, and for assets that have continued to provide generous returns for many years, any disturbance at this time may lead to high volatility of assets.

How will overseas assets perform in the future? What risk factors need to be considered next?

Judging from the performance of the global capital market on July 12, the Hang Seng Index, Hang Seng Technology Index, Hang Seng Pharmaceuticals and Hang Seng Consumers all saw sharp rises. U.S. technology stocks and the Nikkei 225 Index fluctuated at high levels, while the Nasdaq Biotechnology Index continued to rise.

Bosera Fund said that the current valuation of U.S. stocks has already taken into account many expectations of interest rate cuts, and we should be wary of the risk of a pullback in the short term. However, in the long run, the economy will slow down moderately and fiscal spending may continue to expand, so U.S. stocks still have investment value.

Overall, Ping An Securities predicts that the Fed's interest rate cut expectations have increased, coupled with the recent results of the British and French elections, geopolitical risks have eased, overseas liquidity has improved, and the risk appetite of the financial market may rebound, and interest rate cut transactions have entered a critical window period. At the same time, we need to pay attention to the volatility of US stocks caused by the earnings season. Starting in July, US stock earnings reports will be released one after another. Due to the strong earnings performance before, investors may have more stringent requirements on performance, which may cause fluctuations in US stocks. It is recommended to intervene after a sufficient correction.

"Hong Kong stocks as a whole are more sensitive to external factors such as the Federal Reserve's interest rate cuts and changes in U.S. Treasury bond interest rates. After the previous adjustments, valuations have been relatively cleared, and marginal changes have brought about high valuation elasticity." China Merchants Fund analyzed that whether the market trend can continue still requires observing changes in fundamentals, but conversely, it is precisely because Hong Kong stocks are relatively low in valuation that changes in performance expectations have had a relatively large impact on overall valuations.

"Volatility in overseas capital markets has increased as expected, and is expected to remain volatile in the second half of the year." Guotai Fund said that the lower-than-expected non-farm payrolls in June once again catalyzed overseas interest rate cut transactions, but the space is expected to be limited. On the one hand, the space for interest rate cut transactions has narrowed, and the continued expansion of the US fiscal policy will also raise the central interest rate of US Treasury bonds. On the other hand, the continued advancement of the US election has also intensified the style competition in overseas markets.