The Shanghai Stock Exchange (SSE) released its latest report on the exchange-traded fund (ETF) industry, showcasing impressive expansion and record-breaking milestones. As of June 30, 2024, the number of ETFs listed on domestic exchanges reached 967, marking a 9% increase from the end of 2023. Total assets under management (AUM) soared to 2.48 trillion yuan, up 21% from the previous year-end, with equity ETFs accounting for 1.81 trillion yuan—approximately 2.2% of the total A-share market capitalization.
Steady Net Inflows and Record-Breaking Growth
The report highlighted sustained net inflows into the domestic ETF market throughout the year. During the first half of 2024, non-monetary ETFs witnessed net inflows totaling 461.7 billion yuan, constituting roughly 80% of the net inflows recorded in all of 2023. Specifically, broad-based ETFs attracted net inflows of 407.6 billion yuan.
Two Decades of Evolution
This year marks the 20th anniversary of the establishment of the SSE’s ETF market and the broader domestic ETF landscape. From the inception of the first ETF in 2004 to surpassing the trillion-yuan mark in 2020, it took 17 years. The journey to the second trillion-yuan milestone was significantly shorter, achieved in just three years.
Diverse Investment Landscape
By the end of June, ETFs in China covered a wide array of asset classes, including equities, bonds, cash, commodities, and overseas equities. Equity ETFs dominated with 1.81 trillion yuan in AUM, representing 73% of the total.
New Listings and Existing ETF Expansion
In the first half of 2024, the ETF market saw a 430.9 billion yuan increase in size, with new listings contributing 43.1 billion yuan, or 10%, to the growth. The remaining 90% came from the expansion of existing ETFs, totaling 387.8 billion yuan. Notably, 87 new ETFs were launched, 69 of which were equity ETFs.
Investor Participation Grows
Channel participation has also grown, with banks and internet platforms increasingly embracing ETFs. ETF-linked funds, which facilitate investor access, had reached 427.1 billion yuan in AUM by the end of June, up 8% from the first quarter of 2024 and 17% from the second quarter of 2023. These funds now represent 17% of the total ETF market size, up from 16% at the end of Q1 2024.
SSE’s Position in the Global ETF Landscape
As of June 30, 2024, the SSE hosted 571 ETFs with a combined AUM of 1.8679 trillion yuan, marking respective increases of 6% and 20% from the end of 2023. In the first half of 2024, the SSE ranked first in Asia and third globally in ETF trading volume, while its ETF AUM placed second in Asia and eighth globally.
Broad-Based ETFs Lead the Way
Broad-based ETFs continue to be the backbone of the SSE’s ETF market. By June, the SSE had 132 broad-based ETFs (including index-enhanced ones), with a total AUM of 950.8 billion yuan, accounting for 70% of the SSE’s equity ETF market. Compared to the end of 2023, this segment grew by 47%.
STAR Market Fifth Anniversary
Coinciding with the fifth anniversary of the STAR Market(Sci-Tech Innovation Board), the SSE ETF market featured 29 products linked to the board, with a combined AUM of 151.9 billion yuan. Of these, 20 were broad-based ETFs with an aggregate AUM exceeding 140 billion yuan.
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