ETF Boom: Japan's Frenzy, US Reaches $7T in 10 Years
Listen up, friends, the notion that there's gold everywhere is not credible, and the era of all stocks rising together is over. In the future, pay more attention to growth stocks. While there is still speculation in junk stocks, it's much more difficult than before, as the ease of delisting, restructuring, and shell companies has changed. Remember this well, times have changed.
Note: An index bull market may be on the horizon! The whole world is going crazy, pouring into ETF index funds.
Today, in market support, [4 CSI 300 ETFs with huge trading volumes of 31.2 billion], the 4 largest CSI 300 ETFs, following two days of transaction volumes exceeding 18 billion and 17.6 billion, saw their trading volumes continue to increase today. The transaction volumes of Huatai-PineBridge CSI 300 ETF, Harvest CSI 300 ETF, Easy Fund CSI 300 ETF, and China AMC CSI 300 ETF reached 15.257 billion, 5.908 billion, 5.667 billion, and 4.355 billion respectively, with a combined transaction volume of nearly 31.187 billion yuan for the 4 CSI 300 ETFs.
In the past, the national team would support the market by directly buying bank stocks, securities stocks, and blue-chip stocks. Now, they directly buy index funds, supporting the market comprehensively through ETF index funds. The national team's approach has changed, and this is something to pay attention to. It's not just that the national team has ideas, but the times have also changed, and this must be respected. It's not a joke. In the future, it will be normal for the index to rise by ten thousand points while a large number of individual stocks do not rise, as is the case with the US and Indian stock markets.
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Data reveals that ETF funds are about to surge? The US increased by 7 trillion US dollars in 10 years, Japan is going crazy, and China's scale has also surged by 1 trillion in 3 years.
Referring to the United States, the US ETF market size broke through 1 trillion US dollars in 2010, and then it only took 10 years to break through 7 trillion US dollars by 2021, marking a golden decade for index funds, with the US stock index also continuing to rise. As of the end of November 2023, the total assets of the US ETF market were 7.65 trillion US dollars, with a slight stagnation in the past two years, but the overall growth rate remains strong.
In 2023, the global ETF market inflows reached 974.87 billion US dollars, with a total scale of 11.63 trillion, setting a new historical high.
Recently, the Japanese Nikkei ETF index has also seen a big surge, with funds pouring in crazily, almost to the point of frenzy. Throughout 2023, the Nikkei 225 stock index rose by 28%.
This is because global funds have fully entered the era of grabbing the leading positions, and buying indices is the most common method. The natural law is just like this; no matter how big the country, industries are limited, and the advantages of leaders are hard to shake.For the first time! In 2023, the total scale of domestic ETFs in China breaks through the 2 trillion yuan mark.
According to the China Securities Journal, the Shenzhen Stock Exchange released the 2023 ETF Market Development White Paper today. Against the backdrop of the further vigorous development of the global ETF market, with both the number of products and their scale reaching new highs, the domestic ETF market in China has also achieved rapid development against the trend during the fluctuations of the stock market.
Data from the white paper shows that by the end of 2023, there were a total of 897 domestic ETFs, with a total scale of 2.05 trillion yuan. Among them, the combined asset scale of non-currency ETFs reached 1.84 trillion yuan, an increase of 497.1 billion yuan compared to the end of 2022, a rise of 18.53%. In particular, the existing products mainly based on broad-based ETFs have become an important choice for allocation funds, with an additional 421.3 billion yuan in existing ETFs, accounting for 85% of the overall market scale increase.
Note that in 2021, the total scale of domestic ETFs in China broke through the 1 trillion yuan mark, and now in 2023, it has broken through the 2 trillion yuan mark. Overall, it is similar to the United States, entering a period of adjustment and explosive growth. It is expected that in the next 10 years, domestic ETFs in China will break through 10 trillion yuan. Of course, these ETFs are not all buying A-shares; they can buy Hong Kong stocks, U.S. stocks, and there are also Nikkei ETFs, which are buying the main economies of the world.
Note that my mention of 10 trillion may still be relatively conservative because China's economic entity is growing rapidly, with a trend of surpassing the United States. Various industries are rising quickly, and the new economy and new industries are also in an explosive growth phase, and the same is true for the asset management industry. A large-scale influx of funds into ETFs will be a common trend. Next, the funds for protecting the market will still mainly buy index funds, which will correspondingly drive a large amount of funds from outside the market to follow suit. At the same time, the index constituent stocks in the stock market will also benefit from the rise, thereby increasing the probability of linkage.
In 2023, global ETFs ushered in significant development. 2023 saw a record-breaking year. Data from the independent research and consulting firm ETFGI shows that by the end of 2023, assets invested in the global ETF industry set a new record, totaling $11.63 trillion, a significant increase of 25.6% compared to $9.26 trillion at the end of 2022.
Overall, it means that the whole world is aggressively buying ETFs. Ordinary people investing in stocks in an era of 5,000 individual stocks is no longer suitable for ordinary people; a large amount of funds entering index funds will be the norm. Coupled with the fact that funds have long touted that funds are less risky than stocks, leading many investors to mistakenly believe that funds are truly less risky, and they go crazy when there is a market trend.
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