Broad-based ETFs are receding, gold ETFs are taking the lead—the global ETF capital battle has just begun.
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The world of ETFs is undergoing a major undercurrent, with the most symbolic event perhaps being the "change of hands" for the largest ETF.
According to the latest exchange data, as of July 3rd, the scale of Huaan Gold ETF has risen to over 90 billion yuan, surpassing the long-standing largest ETF, Huatai-Pinebridge CSI 300 ETF, and becoming the "Top Fund" in the ETF market.
The rise of Huaan Gold ETF is not only benefiting from the stabilization of gold prices over the past half year (attracting bottom-fishing funds), the boom in diversified asset management products (which commonly allocate some gold), but also, to some extent, "benefiting" from the overall decline in the scale of stock ETFs.
The latter is closely related to the change in the flow of important institutional funds, which not only rewrote the ranking of individual products by size but also directly shook the long-term market structure. The "change of hands" for the largest ETF has also given its manager, Huaan Fund, more "trump cards" amid rumors of a merger with HFT Fund.
Gold ETF Surpasses to Become Number One
During the "golden era" of passive investing in the past two years, the CSI 300 ETF has always been seen as the industry’s immovable "anchor," with the three largest ETFs in the market being CSI 300 ETFs for a long time.
But now, the leader has changed.
Wind data shows that with the recent rebound in international gold prices, market funds have quickly returned to domestic gold ETFs. At the close of July 2nd, Huaan Gold ETF's scale was only 87.162 billion yuan, ranking second in the industry. However, after just one trading day, the balance has completely tilted. On July 3rd, Huaan Gold ETF saw a net inflow of as much as 2.936 billion yuan in a single day, with its latest scale soaring to 90.098 billion yuan. Meanwhile, the largest CSI 300 ETF in the industry experienced fund outflows.
With this rise and fall, Huaan Gold ETF officially becomes the largest ETF product in the domestic market.
Strong Momentum for Commodity and Gold ETFs
The ascent of Huaan Gold ETF reflects a shift in overall ETF market fund flows—stock funds' short-term attraction has weakened, while commodity ETFs and some sector-themed ETFs' "money absorption" ability is significantly rising.
A typical example is that among large ETFs exceeding 10 billion yuan in scale, there are now at least Huaan Gold ETF, Hua Xia STAR 50 ETF, GTJA Securities ETF, Harvest STAR Chip ETF, and GTJA Communications ETF, each with a scale exceeding 50 billion yuan.
Sector ETFs and commodity ETFs are rising among their peers.
In addition, the internal structure of the stock ETF market is also undergoing profound changes. Data shows that since the beginning of this year, the scale of broad-based ETFs has fallen from 2.57 trillion yuan to less than 1 trillion yuan. During the same period, the scale of sector-themed ETFs has risen from 1.09 trillion yuan to about 1.43 trillion yuan against the trend. In other words, the scale of sector and themed ETFs has already exceeded broad-based ETFs.
"Weight" Change in "Hua-Hai Merger"
After Huaan Gold ETF became the largest, its impact may go beyond individual products to affect the status of fund companies in the industry.
On one hand, by holding the largest ETF in the industry, Huaan Fund's overall scale and influence may increase in the future.
On the other hand, as subsidiaries of GTJA Haitong, Huaan Fund and HFT Fund are currently in the process of integration. At this time, having more business highlights is obviously beneficial for Huaan Fund, one of the merger entities.
In fact, data shows that HFT Fund has also performed strongly in the ETF sector this year (ETF AUM increased by 41.118 billion yuan, ranking second in the market in growth). Their forward competition with each other undoubtedly adds interest to the future merged company.
Scale Fluctuations Will Be Normal
From a historical cycle perspective, ETF size rises and falls are normal industry phenomena. With the ups and downs of international gold prices and valuation changes in A-share indices, the contest for "Top ETF" between Huaan Gold ETF and stock ETFs may continue.
This has happened abroad as well.
Meanwhile, the ETF industry rankings driven by product size are also making headlines. On June 3rd this year, E Fund briefly "bucked the trend" and overtook Hua Xia Fund, breaking the latter’s seven-year monopoly as the ETF "number one". However, after only 11 trading days, by June 18th, Hua Xia Fund regained the top spot. As of July 3rd, Hua Xia Fund manages ETFs totaling 585.377 billion yuan, followed closely by E Fund with 568.743 billion yuan. The two giants are equally matched and the competition for the top spot has become routine.
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