SZSE Releases SZSE 50 Index, Highlighting Its Industrial Advantages of “Superior Innovation and High Growth” and Promoting the Index Investment Development
On October 13th, Shenzhen Securities Information Co., Ltd. (hereinafter referred to as Shenzhen Securities Information), a wholly-owned subsidiary of SZSE, announced that it will release the SZSE 50 Index (referred to as SZSE 50, code 399850) on October 18th. As an important measure taken by SZSE to increase the supply of high-quality indices and meet investors’ demand for index investment, SZSE 50isaimed to further enrich the investment targets of high-quality enterprises, channel resources totheleading enterprises in key areas of the country, and introduce capital liquidity to the real economy.
In recent years, the scale and quality of SZSE-listed companies have steadily improved. The internal and external governance and standardized operations have gained greater internal impetus. Leading enterprises have emerged in various industry segments. These provide a sound foundation for further improving the broad-based index series and fostering broad-based index products. Actively responding to market demand, SZSE has launched innovative broad-based indices such as ChiNext 50 and SZSE 50 as beneficial supplements tosuchcore indicesasChiNext Index and SZSE 100 Index, offering diversified options for broad-based investment targets in the market.
SZSE 50 reflects the stock price trends of leading companies inthe Shenzhen market featuringlarge market capitalization, strong industry representativeness and good corporate governance. Positioned as an innovative and growth-oriented broad-based investment target, SZSE 50 emphasizes product functionality. In terms of compilation method, SZSE 50 is different from traditional broad-based indices that select stocks mainly based on total market capitalization. In contrast, SZSE 50 selects 50 SZSE-listed A-share stocks as samples based on such indicators as free-float market capitalization ranking, industry status in the A-share market, and corporate governance scores after implementing liquidity screening and ESG negative exclusion, thus further enhancing the investability of the index.
Characterized by “superior innovation and high growth”, SZSE 50 has prominent advantages in emerging industries. The top three industries with the largest weights are industry (21%), information technology (18%), and consumer discretionary (17%). There are 39 sample companies in strategic emerging industries, with a weight of 77%,and34 sample companies in such key areas as advanced manufacturing, digital economy, and green and low-carbon economy, with a weight of 71%.
There are 33 sample POEs, with a weight of 66%, mainly engaging in strategic emerging industries such as next-generation information technology, biotechnology and new energy. SZSE 50 has a significant agglomeration of leading enterprises.For example,enterprises in the field of advanced manufacturing include CATL, a power battery pioneer, and Mindray, aleadinghealthcare enterprise. Enterprises in the field of digital economy includeInovance, a pacesetter in industrial control equipment, and iFlytek, a leader in artificial intelligence. Enterprises in the field of green and low-carbon economy include BYD, a giant in new energy vehicles, and Sungrow, a top inverter manufacturer. According to CNI three-level industry statistics, all sample companies have a free-float marketcapitalization ranking among the top three in their respective industry segment, 23 ofthe samplesranking first. The sample companies have excellent ESG performance, with 80% of them achieving a rating of AA orhigheraccording to the CNI ESG evaluation results.
Currently, index investment is gradually playing an important role in institutional asset allocation and resident wealth management. Due to their risk diversification, low investment cost and close tracking of market trends, broad-based indices are favored by long-term funds such as institutional investors. Against the backdrop of increasing demand for resident wealth management, there is a growing demand for high-quality broad-based indices on the investment side, and related index products have broad prospects. With a large market capitalization and sufficient liquidity, SZSE 50 provides a solid foundation for product development. As of the end ofthisSeptember, the total market capitalization of SZSE 50 was CNY 7.6 trillion, with a free-float market capitalization of CNY 4.2 trillion, and an average daily trading volume of CNY 65.83 billion in the past year. From the base date of December 31, 2002 to September 28, 2023, the annualized return of SZSE 50 is estimated to be 9.7%.
Next, SZSE will continue to earnestly implement the decisions and arrangements of the CPC Central Committee, and further implement and refine the task of investment side reform under the unified leadership of CSRC. Moreover,wewill vigorously develop index systems and index investment with Chinese characteristics and increase the supply of investment target indices.Wewill actively promote the development and implementation of SZSE broad-based ETF products such as SZSE 50 to builda high-quality ETF market with equity assets as the core andcontinuously optimize themarket investment ecosystem, thus attracting more medium- and long-term funds into the market.
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