The tide of technology surges, consumption quality upgrades, and industrial transformations... China is forging ahead on the path of high-quality development. Investing is a marathon, keeping pace with the index, and grasping the era's "beta". The "Index Quick Look" column deeply analyzes the characteristics of different indices, helping investors explore new investment opportunities.

As 2024 draws to a close, over 900 new funds have been issued this year. With so many new products, what are people buying?

Looking at the total number of effective subscriptions, index products related to the CSI 300 and CSI 500 stand out. Wind data shows that among the newly issued funds this year, 9 out of the top 10 funds by subscription count are index funds tracking the CSI 300, and 1 is tracking the CSI 500.

Focusing on ETFs, among the top 10 new ETFs by effective subscription count, 7 are ETFs tracking the CSI 300, and 3 are tracking the CSI 500. Notably, the CSI 300 ETF Yifangda (159361) is listed for trading today.

Advertisement

It can be said that the CSI "A Series" has become the "phenomenal" product of this year. Currently, the characteristic broad-based index system of the CSI "A Series" has preliminarily taken shape, including indices such as the CSI 50, CSI 100, and CSI 500. So, what are the characteristics of the CSI "A Series" indices, and what are the differences among these three indices?

The "Unbroken" Compilation Philosophy

The three indices of the CSI "A Series" are all selected from the CSI All-Share Index based on traditional market value and liquidity, and integrate industry balance, ESG, and interconnectivity in the selection process, expanding the evaluative dimensions of investability.

Specifically, when selecting samples for the CSI 50, CSI 100, and CSI 500 indices, stocks with a CSI ESG rating of C or below are excluded, and component stocks must be within the scope of the Shanghai-Hong Kong Stock Connect or Shenzhen-Hong Kong Stock Connect. At the same time, these three indices reflect the performance of A-share core leading companies from an industry balance perspective, albeit with slightly different methods of achieving balance.

For instance, the CSI 50 index selects leading companies in the CSI tertiary industries, requiring component stocks to be the largest in terms of average free float market value in their respective CSI tertiary industries over the past year, thus covering 50 different CSI tertiary industries. Meanwhile, the CSI 100 and CSI 500 indices, while selecting leading companies in the CSI secondary and tertiary industries respectively, also strive to make the sample's primary industry free float market value distribution consistent with the CSI All-Share Index.

This industry-balanced compilation method helps enhance the "fit" of the index with the overall market industry distribution, reduces the risk of industry concentration, and also enables the index to better depict changes in the capital market structure and macro industrial transformation, increase the proportion of emerging industries, and guide funds to better serve new quality productive forces.

Market Value Comparison: A50 > A100 > A500

Looking at the market value distribution, the average market value of the component stocks in the CSI 50, CSI 100, and CSI 500 indices gradually "sinks".

Specifically, the average market value of the component stocks in the CSI 50 index is about 270 billion yuan, and that of the CSI 100 index is about 220 billion yuan. Most of the component stocks in these two indices have a market value of over 100 billion yuan, and there are no component stocks with a market value below 20 billion yuan.

In contrast, the average market value of the component stocks in the CSI 500 index is less than 100 billion yuan, with 204 component stocks having a market value between 20 and 50 billion yuan, and 92 component stocks with a market value below 20 billion yuan, covering large, medium, and small-cap stocks in the A-share market.

Industry Distribution "Scan"

In terms of industry distribution, all three indices cover all CSI primary industries. However, upon closer examination, the CSI 50 and CSI 100 indices cover less than 30 CSI secondary industries, and the number of tertiary industry coverage is 50 or less. In contrast, the CSI 500 index covers all 35 CSI secondary industries and 91 out of 93 CSI tertiary industries, which is relatively more comprehensive.

It is worth noting that since the CSI 500 index prioritizes the selection of leading companies in the CSI tertiary industries, it covers more emerging fields, such as optical modules, power grid equipment, energy storage, and other sub-industries in the technology manufacturing sector, allowing for the timely inclusion of leading companies in some emerging fields and capturing opportunities for the development of emerging industries.

Looking at the industry weights, the industry distribution of the three indices is generally balanced, with the primary industry being industrial, with a weight of around 20%.

The second and third largest component industries for the CSI 100 and CSI 500 indices are information technology and finance, with weights of about 15%; while the financial and major consumer industries have a higher proportion in the CSI 50 index.

The "Personality" and "Commonality" of Component Stocks

Looking at the composition of the component stocks, the CSI 500 index includes all the component stocks of the CSI 50 and CSI 100 indices, while the CSI 100 includes 46 component stocks of the CSI 50.

Many well-known leading stocks are "captured" by these three indices, including Kweichow Moutai, CATL, China Merchants Bank, Yangtze Power, Ping An Insurance, etc.

However, in terms of the weight distribution of the component stocks, the three indices have their own "personality".

Due to the different number of component stocks, the concentration of the three indices also varies. The CSI 50 index has a high concentration, with the top five component stocks accounting for about 35%, and the top ten component stocks accounting for more than half; the CSI 500 index is more dispersed, with the top five component stocks accounting for less than 15%, and the top ten component stocks accounting for about 20%; the CSI 100 index is in between the two.

Overall, the three "A Series" indices are similar yet different. Investors can fully consider their own risk tolerance based on their investment objectives, investment horizon, investment experience, asset status, and other factors, and make investment decisions cautiously based on an understanding of the basic characteristics and valuation levels of the indices.

Currently, there are products such as the CSI 500 ETF Yifangda (159361), CSI 100 ETF Yifangda (159686), and CSI 50 ETF Yifangda (563080) on the market, which tracks these three indices, helping investors conveniently lay the CSI "A Series" indices and configure A-share assets with one click.