news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

China Fund News reporter Zhang Ling

Since the beginning of this year, fund companies have been enthusiastic about deploying ETF linked funds. Data shows that the number of newly established ETF linked funds has exceeded 100 this year, setting a record high for the same period in history.

Industry insiders believe that ETF linked funds can not only meet the investment needs of OTC traders, but also help increase the scale and liquidity of target ETFs. However, it should be noted that the performance of ETF linked funds has been quite differentiated this year. Investors are advised to consider a variety of factors when selecting targets to avoid investment risks of short-term theme speculation.

The number of funds established this year exceeded 100

Since July, fund companies are still actively deploying ETF linked funds. In addition to intensively declaring products and adding Class I shares to linked funds, some companies are also transforming their ordinary index funds or LOF products into ETF linked funds.

Wind data shows that as of July 19, the number of linked funds established this year has exceeded 100, reaching 104, calculated by consolidated shares. This is twice the number established in the same period last year and a record high for the same period in history.

Regarding the phenomenon that fund companies are actively deploying ETF linked funds, Huicheng Fund Research Center stated that generally speaking, investors of on-exchange ETFs must open an A-share securities account, while ETF linked funds are mainly for investors who apply for or redeem funds through off-exchange channels. In recent years, fund managers have actively deployed ETF linked funds for the purpose of expanding their customer base, providing investors with more diverse investment tools to achieve new scale growth.

"In addition, there are some ETFs in the current market that are small in scale, have insufficient market making, and have high premiums. ETF linked funds can be subscribed and redeemed based on net value, which can effectively avoid the aforementioned problems," Huicheng Fund added.

Jiyu Fund believes that as investors become more accepting of ETF products, the market demand for ETF linked funds, as a convenient channel for investing in ETFs, will also grow. During the year, fund companies have continuously launched new products by adding linked fund I shares and transforming ordinary index funds or LOF products into ETF linked funds to meet the diverse needs of investors from various channels.

"At the same time, issuing ETF linked funds is equivalent to injecting incremental funds into the corresponding track, which will to a certain extent drive further improvement in performance and promote the dual-wheel drive of performance and scale." said Jiyu Fund.

Performance differentiation

The difference between the first and last digits exceeds 50 percentage points point

In terms of performance this year, the differentiation of ETF linked funds is quite obvious. Wind data shows that as of July 19, the top returns this year are gold, bank theme products, cross-border ETFs and dividend strategy products, while software, medicine, animation and other theme products lag behind, with the performance gap between the top and bottom exceeding 50 percentage points.

In this regard, Huicheng Fund stated that since ETF linked funds are highly correlated with the target ETF, the performance differentiation mainly comes from the differentiation of the benchmark index returns. Therefore, from the perspective of product line layout, it is recommended that fund companies give priority to issuing linked funds corresponding to the target ETFs with better performance.

A public fund manager in Beijing also believes that the performance differentiation of target ETFs will lead to the performance differentiation of ETF linked funds. Therefore, when fund companies are planning linked funds, they should first conduct market research and analysis to find out areas with greater potential investment value and types of products that are currently vacant. On this basis, they should accurately position products, optimize strategies to increase returns, etc., so as to ensure the steady performance of linked products and enhance investors' sense of gain.

For ordinary investors, Ji Yu Fund recommends that before investing in ETF linked funds, they should fully understand the investment strategy, risk-return characteristics and other information of the index tracked by the product to ensure that the product meets their investment objectives and risk tolerance.

"Secondly, you need to diversify your investments." Jiyu Fund said that it does not recommend investors to concentrate all their funds on a single ETF linked fund, and should reduce investment risks through diversification. You can also dilute the cost through regular investment to avoid a one-time subscription at a high index level.

Huicheng Fund also believes that investors should not excessively pursue popular products and avoid investment risks of short-term theme speculation. At the same time, they should also pay attention to transaction fees. "Most over-the-counter funds will charge redemption fees for investors with a shorter holding period, so when investing, investors need to consider their own holding period comprehensively and then choose relevant linked funds."

Editor: Joey

Reviewer: Chen Siyang

Copyright Notice

"China Fund News" enjoys the copyright to the original content published on this platform. Reproduction without authorization is prohibited, otherwise legal liability will be pursued.

Contact person for authorized reprint cooperation: Mr. Yu (Tel: 0755-82468670)