China's ETF market hits record 6 trln yuan

The combined scale of China's exchange-traded funds (ETFs) has hit a record 6.02 trillion yuan (855.6 billion U.S. dollars), up more than 2.2 trillion yuan from the end of last year, Shanghai Securities News reported Saturday, citing data from Choice, a financial information provider.

China introduced its first ETF in 2004. The market has expanded rapidly in recent years, with total ETF assets exceeding 4 trillion yuan in April this year and topping 5 trillion yuan in August.

Large ETFs have grown rapidly, with the number of funds managing over 10 billion yuan increasing to more than 120, up from just 66 at the end of last year.

In addition to strong asset growth, ETF product offerings have continued to increase. The number of newly launched ETFs this year has reached a record high.

Commenting on the rapid expansion of ETF assets, Zhang Yanmin, general manager of the equity investment department at Southern Asset Management, said regulators have continued to encourage long-term capital to enter the market in recent years. Central Huijin and other long-term funds have repeatedly subscribed to broad-based ETFs to help stabilize the market, sending a strong signal to investors, he said.

Investor preferences are also changing. The "low-cost and more transparent" features of index funds align well with investors' needs, Zhang said. A growing number of institutional investors, such as insurers and pension funds, are using ETFs as part of their core allocations, while individual investors are gradually shifting from picking fund managers to picking investment tools.

He Jiang, head of the quantitative investment department at Minsheng Royal Fund Management, said the rapid growth of fund assets is reshaping the structure of the A-share market. Public funds are injecting large volumes of long-term, stable capital, helping improve overall stability and pricing efficiency.