ETF Strategy "Looks Beautiful": Huaan Fund, Industrial Fund And Other Products Are Eliminated By The Market

As of August 26, there were 557 ETF funds on the market.

And ETFs are growing faster and faster.

According to wind data, at the end of 2019, there are 269 ETFs in the whole market; By the end of 2020, the number of ETFs has reached 368, with 99 new ETFs; As of August 26, 189 new ETFs have been added this year, and 19 ETF funds are being issued.

The reverse of ETF's blowout is that the liquidation speed of ETF is also accelerating this year.

In 2020, a total of 8 ETF funds were wound up, while 10 ETF funds have been wound up since this year.

Industry insiders believe that the problem behind ETF fund "ice and fire" is that ETF fund products are issued too much and the phenomenon of product homogeneity is serious.

Issue blowout

As of August 25, the number of newly established ETFs has reached 189, with a total share of more than 124.8 billion.

In contrast, in 2020, the number of newly established ETFs was 99, and since this year, the number of newly established ETFs is 190% of that of last year.

In the whole year of 2019, the number of newly established ETFs is 87, and the number of newly established ETFs since this year is 217% of that of the whole year of 2019.

Overall, among 189 ETF funds issued by 36 fund companies this year, Huaxia Fund has the largest number and 19 ETF funds have been established this year.

Six fund companies, including Cathay Pacific Fund, e fund, Wells Fargo fund, Huabao fund, Huatai Bairui fund and Yinhua Fund, have issued more than 10 ETFs this year.

In fact, the issuance of ETF funds is still booming. At present, there are 19 ETF funds (A / C shares are calculated separately) and 8 ETF funds are being issued. Including e-fund China Securities rare earth industry ETF, southern China Securities technology 100 ETF, China Securities animation game ETF link fund, etc.

It is found that most of the ETF fund products issued by fund companies this year and are being issued are mainly industry and theme fund products.

As for the fund company's vigorous layout of ETF funds, a fund industry personage explained that everyone is rushing to occupy the product line track. ETF fund is the place that powerful fund companies have to fight for. Generally, after getting the approval document, they will send the ETF as soon as possible. ETF has the first effect, and when the style changes, it is likely that the theme Fund issued by the company will be hot.

However, there is a noticeable tendency that the daily trading volume of many ETF products is very small, among which more than 200 ETFs have a daily average trading volume of less than 100 million yuan since this year.

Acceleration of winding up

There are two sides to the coin, one is the massive issuance of ETF funds this year, and the other is the accelerated liquidation of ETF funds this year.

This year, a number of ETF funds due to the scale of substandard and sounded the liquidation alarm. Many ETFs have been wound up due to the shrinking scale and the sharp decrease in the number of holders.

On August 18, Hua'an Fund released the liquidation report of Huaan Hushen 300 low wave ETF.

According to the announcement, when the fund was established on March 7, 2019, the total number of fund units was 376 million. On the last operation day of August 9, the fund had only 5.1768 million units, with a scale of 0.05 billion yuan.

Hua'an Hushen 300 low wave ETF belongs to the style of large market value. The return of the fund in recent one year is - 2.94%, the return since its establishment is 5.03%, and the annualized return is only 2.04%.

Trading volume has shrunk significantly since April.

In this regard, Lin Jiayi, CEO of Xuanjia finance, believes that "the liquidation of ETF funds is a normal phenomenon, mainly due to the small scale and difficulty in maintaining, and the elimination of poor performance funds. At present, the industry is in the early stage of development, there are many players, and the market competition is very normal. "

In fact, the reason why most ETF funds and ETF feeder funds terminate their contracts is that the fund scale is too small, which triggers the fund liquidation mechanism.

According to laws and regulations, during the duration of the open-ended fund contract, if the net asset value of the fund is less than 50 million yuan for 60 consecutive days, or the number of fund share holders for consecutive 60 days is less than 100, the fund liquidation will be triggered.

The number of ETF funds to be wound up this year and the linked funds of ETF funds are much more than in previous years.

Wind data shows that a total of 8 ETF funds will be wound up in 2020, while 10 ETF funds and 4 ETF feeder funds have been wound up in less than 9 months since this year.

The 10 ETF funds to be wound up this year include: Societe Generale Shanghai Stock Exchange low volatility ETF, Societe Generale Shanghai Stock Exchange 1-5-year Local Government Bond ETF, China Southern Securities 500 raw materials ETF, southern China Securities 500 industrial ETF, Hua'an Hushen 300 industry neutral low volatility ETF, Hua'an MSCI China A-share international ETF, China merchants bond-0-3-year Yangtze River Delta ETF, CCB China Securities 800etf, Huaxia 3-5-year medium and high-level pledged credit bonds ETF, etc Wells Fargo Hang Seng China enterprise ETF.

The four ETF feeder funds in liquidation include: Huaxia 3-5-year medium and high-level pledged credit bonds ETF link a, Guangfa wanchuang 100 ETF link a, Hua'an MSCI China A-share international ETF link a, and GF China Securities Beijing Tianjin Hebei ETF link a.

It is worth mentioning that there are still many mini funds in the ETF. For example, according to the second quarter report data of 2021, there are 57 ETF funds whose net asset value is lower than the "red line" of 50 million yuan.

Behind polarization

The problem behind the increase of liquidation phenomenon is that ETF fund products are issued too much and the phenomenon of product homogeneity is serious.

For example, the first and second batch of entrepreneurship and innovation funds that have been approved are all ETF funds, with a total of 15.

As the same kind of products, the competition among peers is extremely fierce.

"All of a sudden, so many entrepreneurship and innovation funds were issued at the same time. It's too internal. It's estimated that few of them will live long after that." A fund person sighs.

In fact, among the first batch of entrepreneurship and innovation funds that have been listed, there are great differences in capital inflow. Wind data shows that the net inflow of e-fund and Huaxia Fund's entrepreneurship and innovation 50ETF since listing has exceeded 6 billion yuan, while that of Huabao fund, China Merchants Fund and Harvest Fund is only 100 million, 200 million and 700 million respectively.

Industry insiders believe that in the process of survival of the fittest in the market, fund companies will also be forced to focus more on competitive products, which is conducive to promoting the industry to return to its origin.

According to industry insiders, index funds are basically strong take all, others are accompanied by running.

A fund industry personage thinks that ETFs pay attention to the scale effect. The larger the scale, the stronger the ability to track the index. The more people buy, the better the liquidity, which will form a positive circular effect. Therefore, the first mover advantage of ETF products is very significant. In the end, only one or two ETFs corresponding to an index survive, and the others may be eliminated.

"The market capacity of similar ETF products is limited. For example, the CSI 300 index fund, in fact, has done relatively large in the market, that is, three; At present, there are only 2 large ETF funds in Kechuang; And the general theme index fund is basically 1-2 capacity A fund source said.

In this regard, Yang Delong, chief economist of Qianhai open source fund, said that due to the large market demand, many fund companies have made great efforts to lay out ETF funds.

"The homogeneity of ETF funds is relatively serious, and the differentiation is also very severe. Some ETF funds are welcomed by investors because of their large scale and good liquidity. While some ETF funds have to face the fate of liquidation due to their small trading volume. Therefore, ETF funds are also in the process of survival of the fittest. " Yang Delong said.

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