Since the implementation of the "September 24th policy measures", the effect of intertwined economic and policy adjustments has become increasingly apparentThe A-share market has not only shown a notable recovery in indices but has also witnessed a significant surge in trading volumes and investor enthusiasm, indicating a rising market sentiment and risk appetite

Another noteworthy phenomenon since the market's rally began is the extraordinary performance of the A500 Index, which has emerged as the hottest "index darling" in the capital markets

Statistics reveal that as of November 12th, just 21 trading days after its launch, the scale of the China Securities A500 ETF exceeded 100 billion yuan, setting a new record for the fastest ETF to cross the 100 billion mark in history

By November 17th, in less than two months since its launch, the fund products related to the China Securities A500 had a combined scale exceeding 210 billion yuan, setting a new record for the fastest growth in index-related products

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Additionally, by December 2nd, the scale of the A500 had surpassed that of the Sci-Tech 50, becoming the second-largest broad market index in the A-shares

The sustained popularity of the A500 Index somewhat reflects the growing recognition and demand for broad-based investment products among investors

To meet the market demand, Huaxia Fund has recently launched the A500 ETF Fund (code: 512050) following the introduction of the "Offshore Index Fund Huaxia A500 (Category A: 022430, Category C: 022431)". This fund provides investors with a comprehensive tool for index-based investments in sectors characterized by high-tech, high-efficiency, and high-quality productivity

In 2025, A-shares are expected to show a trend of fluctuating upward

It has been over two months since the policy measures were rolled out on September 24. Since then, the A-share market has experienced an "epic surge" marked by extraordinarily high trading volumes, followed by a large drawdown and then a period of warming and consolidationCurrently, the prevailing trading themes are still focused on expectations of incremental policy changes and the verification of policy impacts since the end of September

Looking ahead to 2025, many institutions anticipate that the A-share market may embody characteristics of an upward fluctuation

On the international front, the Federal Reserve has reduced interest rates by 75 basis points this yearAlthough there is uncertainty regarding the pace of further rate cuts next year, it is anticipated that there may be two additional rate cuts, overall signaling a trend of liquidity easing

From a liquidity perspective, the constant stream of favorable policies in the capital market solidifies the foundational policies for A-share liquidity evolution

Under strong policy guidance, funds from institutions like insurance and securities companies are expected to experience an increase in both willingness and capacity for allocationMoreover, the variety of index funds is continuously expanding, contributing significant liquidity increments to the A-share market

On the fundamental front, Bohai Securities believes that in 2025, the profit growth of listed companies may achieve a growth rate that exceeds GDP growth, driven primarily by stable fundamental growth and a reasonable rebound in prices

Index funds are becoming increasingly desirable

As various market signals suggest, an increasing number of funds are entering through passive index funds, which highlight a new trend in the A-share market

Why is there such a growing fondness for passive index funds? The answers are simple and clear, as these funds offer distinct advantages including simplicity, transparency, low fees, and strong performance

Many might recall Warren Buffett's famous decade-long bet, which started on January 1, 2008, and lasted until December 31, 2017. Buffett chose the "S&P 500 index" to compete against actively managed funds selected by Protégé Partners, resulting in Buffett earning an impressive 125.8% over the decade, far exceeding the 36.3% of the actively managed funds

While there are significant differences between the A-shares and US stocks, one undeniable point in recent years is that gaining excess returns has become increasingly challenging, and index investing is increasingly seen as an optimal solution to navigate the complexities of profits, scale, and liquidity

A500: The New Frontier of China's Asset Investment

Index funds are gaining popularity, but among the numerous available indices, which has proven to be more favorable?

The answer lies in the flow of money

The A500 has become the "favorite child" of numerous capital markets for several reasons: What exactly makes it stand out?

Firstly, it represents a new wave of Chinese core assets, embodying strong market representation and poised to potentially become China's version of the S&P 500.

The A500 index structure has broken free from the limitations of solely using total market capitalization as a screening criterion, covering all 35 secondary industry sectors in the China Securities universe as well as 30 out of 31 first-level sectors identified by Shenwan

Additionally, the A500 exhibits high coverage of core assets across various sectors in the A-shares (with total market capitalization, circulating market capitalization, recent year dividends, net profit, and operating income exceeding 50%). It possesses strong market representation and combines characteristics of both the CSI 300's value and the CSI 500's growth indices It may become China's version of the S&P 500.

Compared to other mainstream broad-based indices like the CSI 300, the A500 is relatively more diversified in terms of industry and individual stock concentration, featuring a greater number of core assets in A-shares

In comparison to the CSI 500, the A500 has a larger market capitalization, a more balanced industry distribution, and greater stock concentration

Secondly, the A500 has demonstrated strong returns, consistently outperforming its broad-based index peers over the long term

Launched just before the monetary policy pivot on the eve of "September 24th", the A500 is the first broad-based index following the "New National Ninth Measures". Emerging from the backdrop of solidifying the market's "policy bottom" and the initiation of a new round of reversal trends, it stands as a representative index of a new generation of core assets

Reviewing past bottom-up rallies, broad market indices, characterized by their high capital efficiency (with ETF positions reaching up to 99%) and coverage of mainstream leading stocks, have historically performed exceptionally well

According to statistics from GF Securities, from 2005 to now, the A500 has achieved a cumulative return of 391.4%, significantly outpacing other broad-based indices

Specifically, within the time frame from January 1, 2005, to November 11, 2024, the cumulative returns of mainstream broad indices such as the CSI 300, Shanghai Composite Index, and Shanghai 50 Index are 313.1%, 174.0%, and 226.8%, respectively, corresponding to annualized returns of 7.6%, 5.4%, and 6.3%.

In contrast, the A500's cumulative return stands at 391.4%, with an annualized return of 8.6%, which is notably superior to other broad indices

Thirdly, the selection of component stocks considers ESG ratings and adheres to cross-market connectivity requirements, aligning well with foreign capital preferences

As a representative of quality core assets, the component stocks of the China Securities A500 are highly favored by foreign investors, with the median foreign ownership ratio reaching 2.55%, substantially higher than the overall A-share average of 1.09%.

Furthermore, according to research from Shenwan Hongyuan, 2025 is a crucial year for the formulation of the 14th Five-Year Plan, with future industrial policies expected to focus on new productive forces

The upcoming "New Industrial Standardization Navigation Project Implementation Plan (2023-2035)" outlines future industries including the metaverse, brain-machine interfaces, quantum information, humanoid robots, generative artificial intelligence, biomanufacturing, next-generation displays, future networks, and new energy storage

When mapped to the A-share market, these industries primarily involve electronics, computers, telecommunications, media, machinery, military, pharmaceuticals, and power equipment—as reflected in the A500's weighted industries

Thus, as industry trends and policies dance together, the A500 will significantly benefit and possess long-term investment value

Huaxia A500: What Makes It Exceptional?

It is well-known that there are currently numerous funds tracking the A500, often making it confusing for investors

Which one stands out?

The Huaxia A500 may well be a trustworthy choice!

Firstly, it exhibits rapid growth in scale and high trading activity According to Wind data, as of December 2, 2024, the A500 ETF fund (512050) is presently the leading fund in its category, with a turnover rate of 24.01%, indicating high market activity

In terms of scale, the A500 ETF has reached a new high of 12.442 billion yuan since its establishment

In terms of shares, it has seen a record of 12.947 billion shares since its inception

Secondly, it benefits from backing by the "ETF King", having maintained the largest average scale within the industry for the past 19 consecutive years