On the night of February 22, 2023, the Huatai-PineBridge Dividend ETF (510880.OF) marked a milestone by achieving a new record net asset value of 3.4439 CNY per unitThis surpasses its previous record of 3.4101 CNY set on October 15, 2007, cementing its position as a leading financial instrument in the marketHaving been launched in November 2006, Huatai-PineBridge Dividend ETF stands out as the first and largest dividend-themed ETF in the marketOver the past decade, it has reportedly yielded nearly 5 billion CNY in profits, with a cumulative dividend payout exceeding 3.2 billion CNY

Industry experts are reflecting on the current macroeconomic climate, highlighting a growing demand for dividend strategies

Advertisements

With its emerging reputation as a tool for bottom fishing in volatile markets, the ETF sector is poised for expansion, evolving into a crucial asset allocation mechanism for investors.

A remarkable peak recorded at 3.4439 CNY – Huatai-PineBridge Dividend ETF sets a new standard!

On February 22, 2023, the reported data for Huatai-PineBridge Dividend ETF indicated a refreshed peak net asset value of 3.4439 CNY per unit, eclipsing the previous record from October 15, 2007.

In recent days, the continuous climb of the Shanghai Dividend Index has propelled the net asset value of the Huatai-PineBridge Dividend ETF to new heights.

As the first and largest dividend-focused ETF in the market, Huatai-PineBridge Dividend ETF had a management scale exceeding 18.8 billion CNY as of February 21, 2023. According to reports from the interim earnings statement of 2023, it has accumulated close to 5 billion CNY in profits over the past decade and has conducted 17 dividend distributions since inception, with total dividends paid out amounting to more than 3.2 billion CNY.

The underlying index of the Huatai-PineBridge Dividend ETF, known as the Shanghai Dividend Index, is composed of the 50 stocks with the highest dividend yields among those listed on the Shanghai Stock Exchange

Advertisements

This index is regularly rebalanced based on dividend yield, reflecting the overall performance and trends of high-dividend stocks on the Shanghai market.

Huatai-PineBridge Fund emphasizes the significance of dividend strategies as a well-established investment approach, validated over significant time spans and various market conditionsAgainst the backdrop of increased macroeconomic uncertainty, these strategies are becoming increasingly attractive in terms of market demand and investment valueCompared to major broad-based indices, dividend indices provide superior yield and exhibit lower volatility.

The constituents of the Shanghai Dividend Index are characterized by high dividends and overall quality

Advertisements

When compared to the primary broad market indices in mainland China, Hong Kong, and Singapore, the Shanghai Dividend Index has outperformed in terms of growth since the start of the year, alongside a significant yield advantageIts dividend yield is higher not only than leading broad indices but also against its counterparts among similar dividend indices in the market.

According to Huatai-PineBridge Fund, in an environment where long-term interest rates are on the decline, the relative advantages of dividend yields become increasingly amplifiedThis presents a compelling value proposition for those investors aiming for stable returns over the medium to long termAttributes such as stable profitability and strong cash flow empower high-dividend companies with robust risk resilience, and sustainable dividend returns effectively mitigate volatility

• U.S. Interest Rates Cut Again
• Avita Secures Over 11 Billion in Funding!
• Pinduoduo's Staggering Loss of Over 450 Billion!
• South Korean Stock Market Suffers Major Crash
• Euro Experiences Continuous Decline

This quality is particularly crucial during turbulent market periods.

Strong growth across ETF performance and scale

Interestingly, alongside its new peak in net asset value, the Huatai-PineBridge Dividend ETF's overall size is also on an upward trajectory, achieving the dual success of popularity and financial health.

Founded in 2006 with an initial fund size of 2.223 billion CNY, the Huatai-PineBridge Dividend ETF's journey has not been without its ups and downsIt faced a decline in size to as low as 580 million CNY mid-2016, but gradually recovered

By the end of Q1 2021, the ETF's management scale surpassed 10 billion CNYBy the end of 2023, its scale reached 16.64 billion CNY, highlighting a robust comeback.

Reflecting on 2023, the Chinese ETF market, having evolved over two decades, is entering a phase of rapid expansionInvestor understanding of ETFs is increasingly deepening, leading to a diversified range of products and a growing base of participants.

Research from China Merchants Securities shows that in 2023, the scale of broad-based ETFs saw significant growth, with the CSI 300 and STAR Market-related ETFs becoming particularly popularThe acceleration of growth in industry-themed ETFs has outpaced that of 2022, with significant funding inflows into technology and healthcare ETFs

In terms of cross-border markets, there were substantial inflows in ETFs from Hong Kong, the US, and JapanFurthermore, in the bond category, the bullish trend in bonds during 2023 highlighted impressive growth for bond ETFs, primarily driven by sovereign and government financial bondsMeanwhile, commodity ETFs, especially gold ETFs, grew rapidly amid a volatile international environment.

The Chinese ETF market showcases characteristics of concentration among leading playersAs fund companies increasingly prioritize indices and ETF product lines, the influence of comprehensive company strength on ETF offerings is becoming more pronouncedAdditionally, similar to developed markets abroad, the decline of active investment alpha is observed as a long-term trendIn terms of costs, ETFs present a fee advantage over actively managed funds and off-market passive index funds, leading to a continuing transition of institutional investors from active funds to ETFs, a trend that is likely to persist.

Looking ahead, research from China Merchants Securities predicts that the Chinese ETF market will continue to experience high growth