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As a weather vane, the operation of the "national team" Central Huijin is the focus of market attention. Recently, with the disclosure of the second quarter report of the fund, the situation of Central Huijin's sweeping ETFs surfaced.

According to statistics from the 21st Century Business Herald reporter, in the second quarter, Central Huijin continued to buy up six "super-sized" ETFs, including Huatai-PineBridge CSI 300 ETF, E Fund CSI 300 ETF, Hua Xia CSI 300 ETF, Harvest CSI 300 ETF, Hua Xia SSE 50 ETF, Southern CSI 500 ETF and Hua Xia SSE 50 ETF, increasing its holdings by 9.6 billion shares.

According to the estimated average transaction price in the second quarter, Central Huijin spent more than 30 billion yuan to increase its holdings in the above six ETFs.

Available second quarter report data shows that as of the end of the second quarter, Central Huijin Investment held a large position (holding more than 20%) in 9 ETFs with a market value of nearly 480 billion yuan.

Huijin sweeps up ETF

Since the fourth quarter of 2023, the main path for the "national team" to enter the market has been to invest in ETFs.

Generally speaking, the "national team" Central Huijin includes Central Huijin Investment Co., Ltd. (hereinafter referred to as "Central Huijin Investment") and Central Huijin Asset Management Co., Ltd. (hereinafter referred to as "Central Huijin Asset"). As of the end of 2023, the two held a total of 43.812 billion ETF shares, with a holding value of 117.695 billion yuan.

In the first half of this year, Central Huijin accelerated the pace of buying ETFs.

Since the quarterly report only discloses situations where a single investor holds 20% or more of the fund shares, a reporter from 21st Century Business Herald found through a comprehensive analysis of the 2023 annual report, the first quarterly report of 2024, and the second quarterly report of 2024 that in the second quarter of this year, Central Huijin Investment increased its holdings of a total of 6 ETFs.

Specifically including: 3.051 billion shares of Huatai-PineBridge CSI 300 ETF, 2.883 billion shares of E Fund CSI 300 ETF, 1.051 billion shares of Hua Xia CSI 300 ETF, 1.258 billion shares of Harvest CSI 300 ETF, 564 million shares of Hua Xia SSE 50 ETF, and 833 million shares of Southern CSI 500 ETF.

Based on the average price of the above six ETF funds in the second quarter, it is estimated that Central Huijin increased its holdings of the above six ETFs by RMB 10.892 billion, RMB 5.016 billion, RMB 3.836 billion, RMB 4.667 billion, RMB 1.399 billion and RMB 4.465 billion respectively in the second quarter, with a total increase in ETF holdings of approximately RMB 30.275 billion.

It is worth mentioning that compared with the data in 2023, among the 9 ETFs that Central Huijin Investment swept up, in the first and second quarters of this year, Central Huijin Investment only increased its holdings of the above 6 ETFs. For Huaan SSE 180 ETF and Cathay SSE 180 Financial ETF, Central Huijin Investment did not subscribe, and continued to maintain its holdings at the end of last year.

As for another E Fund Shenzhen Stock Exchange 100 ETF, Central Huijin Investment held less than 1% last year, so it was not disclosed in the quarterly report. However, another member of Central Huijin Group, Central Huijin Asset Management, holds more than 20% of E Fund Shenzhen Stock Exchange 100 ETF. According to the disclosure of its first and second quarter reports, Central Huijin Asset Management did not increase or decrease the ETF fund, and continued to hold 693 million shares. At the end of the second quarter, the holding ratio was 27.42%, and the market value of holdings was 1.641 billion yuan.

In 2023, Central Huijin Investment and Central Huijin Asset Management have a total of more than 12 ETFs (two of which overlap), of which three were not disclosed in the quarterly report because the proportion of fund shares held by a single investor did not reach 20%.

According to the information disclosed in the second quarter report, Central Huijin continued to hold 9 ETF funds at the end of the second quarter, with a share of more than 170 billion shares.

Specifically, Central Huijin Investment holds 8 ETF shares, namely: Huatai-PineBridge CSI 300 ETF 35.655 billion shares, E Fund CSI 300 ETF 54.735 billion shares, Huaxia CSI 300 ETF 20.937 billion shares, Harvest CSI 300 ETF 19.544 billion shares, Huaxia SSE 50 ETF 28.790 billion shares, Southern CSI 500 ETF 5.278 billion shares, Huaan SSE 180 ETF 5.232 billion shares, Guotai SSE 180 Financial ETF 2.564 billion shares. In addition, Central Huijin Asset Management held 693 million shares of E Fund SSE 100 ETF at the end of the second quarter.

Based on the closing prices of the above 9 ETFs at the end of the second quarter, Central Huijin Investment held approximately 480 billion yuan of ETFs at the end of the second quarter.

“National Team” Investment Style

Looking only at the most representative Central Huijin Investment, Wind data shows that as of the end of 2023, "Central Huijin Investment" was one of the top ten holders of nine broad-based ETFs, holding a total of 40.13 billion shares, and increased its holdings by 13.139 billion shares in 2023.

However, in 2024, the number of ETF shares held by Central Huijin Investment increased to 163.095 billion at the end of the first quarter, and continued to increase to 172.735 billion at the end of the second quarter. Simply calculated, the national team increased its ETF holdings by at least 123 billion shares in the first quarter and about 9.6 billion shares in the second quarter.

That is to say, in the first quarter, the national team bought a large amount of ETFs, and in the second quarter, the pace slowed down significantly, but it was still increasing. Judging from the data available in the first and second quarter reports, the national team did not redeem ETFs, which means that there was no withdrawal at all.

Data available in the quarterly report show that Central Huijin bought a large number of large-cap stocks in the first half of this year, especially many CSI 300 ETFs, and this trend continued in the second quarter.

However, this is not all of the "national team's" investment, because during the period around the Spring Festival in the first quarter, the "national team" also bought a large number of small and medium-cap related broad-based ETFs such as CSI 500, CSI 1000, and CSI 2000. However, since there is no such data in the 2023 annual report, it is impossible to infer the investment of the "national team" in the above-mentioned small and medium-cap broad-based ETFs based on the annual report data in the first and second quarters of this year.

However, from the market perspective, the strong small-cap style in 2023 has retreated, especially the decline of small-cap stocks at the beginning of the year triggered negative liquidity feedback, while large-cap stocks were relatively stable, and the dividend style performed better under the demand for risk aversion.

In general, large-cap ETFs have always been the favorite of the "national team" as a weather vane. This has also led to the large-cap value style being dominant in the first half of this year, while the small-cap growth style is relatively lagging behind. In the second quarter, high dividend strategies continued to be popular.

In this regard, Hua Xia CSI 300 ETF's second quarter report stated that in terms of the market, following the V-shaped reversal trend of first decline and then rise in the first quarter, the slow economic recovery process, net outflow of northbound funds, and rapid market style rotation led to the weak operation of the A-share market in the second quarter. In terms of style, the large-cap value style is relatively dominant, while the small-cap growth style is relatively weak. In terms of sectors, high-dividend sectors such as banks and utilities still perform strongly, while growth sectors such as computers and media perform poorly.

As for the future market, many fund managers are optimistic about subsequent investment opportunities.

Liu Jun, fund manager of Huatai-PineBridge CSI 300 ETF, said in the second quarter report that looking forward to the third quarter, entering the mid-term performance disclosure period and the key policy window period, the market will be affected by the resonance of the performance of listed companies and the expectations of the intensity of reform, and may show more volatile market conditions. It is recommended to look for structural opportunities, and the market style may continue to have relative returns. In the medium term, with the Chinese economy ushering in a new round of profit cycle and the dislocation of the Sino-US economic cycle into the second half, the valuation of the A-share market is relatively attractive, with outstanding cost performance, and the allocation opportunities outweigh the risks.

E Fund managers Yu Haiyan and Pang Yaping believe that the current A-share market valuation is still at its historical bottom and is significantly lower than the global market, and has good investment attractiveness both vertically and horizontally.