In the first half of the year, the number of ETF issuances hit a record high for the same period. Public fund institutions are fiercely competing and will welcome major innovative products.

184 ETFs, hitting a new historical high for the same period.

In recent years, China’s on-exchange ETF market has entered a phase of rapid growth. While the number of products and management scale have risen steadily, competition in the public fund industry has continued to intensify. With regulators clearly supporting the launch of actively managed ETFs on the Shanghai and Shenzhen stock exchanges, the domestic ETF industry is set to officially move on from the era of single passive investing and enter a new stage of high-quality development where passive and active approaches develop in parallel.

Number of ETFs Issued in the First Half Reaches a Historical High for the Same Period

Since 2023, ETFs have seen leapfrog development. The overall scale has grown from the starting point of 2 trillion yuan. By the end of 2025, the total ETF scale in China exceeded 6 trillion yuan, and the number of products reached 1,381, making it the top in Asia and a core tool for the capital market to serve residents’ wealth management.

According to Wind data, as of June 29, 202年, a total of 184 ETFs were newly established within the year, with a combined issuance size of 647.81 billion yuan. Compared with the same period last year, the number of issuances reached a historical high for the first half of the year.

In terms of the issuance structure, sector-themed ETFs have become the main driver of expansion. Fund companies have been intensively laying out sub-sectors such as hard technology, high-end manufacturing, resource cycles, and low-volatility dividends. At the same time, innovative ETFs such as bond, cross-border, and commodity ETFs have expanded in parallel, and the product lineup has continued to become richer, covering the needs of diversified asset allocation.

Currently, ETFs cover all major categories, including broad-based indexes, sector themes, bonds, and cross-border assets, and have grown into a standardized allocation tool for diversified investment in the A-share market.

In fact, in recent years, in the face of continuously expanding market demand, major fund management companies have accelerated their ETF-track deployment. From the perspective of fund managers, leading institutions still hold a dominant position. Sixteen institutions—such as Huaxia Fund, E Fund, Huatai-PineBridge Fund, Guotai Fund, GF Fund, Southern Fund, Bosera Fund, and Harvest Fund—have scale exceeding 100 billion yuan.

Meanwhile, smaller and mid-sized fund companies have achieved differentiated development by focusing on niche sectors and designing innovative products.

Intense Competition Among Public Fund Institutions

Entering 2026, the domestic ETF market has seen a historic turning point this year: the rankings of leading managers have changed multiple times. On June 3 this year, E Fund surpassed Huaxia Fund for the first time, and the position of the ETF “top dog” that had lasted for 7 years changed hands. After 11 trading days, Huaxia Fund regained the ETF “top dog” position.

Wind data shows that as of June 29, Huaxia Fund’s total ETF management scale across all categories was 5780.38 billion yuan, and the non-money-market ETF scale was 5779.17 billion yuan. E Fund’s total ETF management scale across all categories was 5779.17 billion yuan, and the non-money-market ETF scale was 5779.17 billion yuan.

Among the top tier, Guotai Fund had 3552.33 billion yuan and Huatai-PineBridge had 3019.72 billion yuan, followed closely. In addition, seven leading public fund companies—including GF Fund, Southern Fund, Bosera Fund, and Harvest Fund—each had ETF management scales exceeding 2000 billion yuan.

It is worth noting that behind the strong growth of ETF scale over the past two years, the ETF market is also attracting new players to actively enter.

In May, ABC-CA Fund filed for both the CSI 300 Quality ETF and the CSI 300 Quality Index product at the same time.

In March, Orient Red Asset Management filed for its first ETF—the Orient Red CSI Orient Red Dividend Low Volatility ETF.

In 2025, companies including China-Universal Fund, Xinyuan Fund, Great Wall Fund, and Industrial Securities Global Fund all made their first foray into ETF products. And in March this year, Industrial Securities Global Fund also filed for the Industrial Securities Guozheng Value 100 ETF.

In addition, after a 14-year gap, Schroders (Bank of Communications) Fund launched an ETF again—the Schroders (Bank of Communications) CSI Zhixuan CSI-HK Technology 50 ETF.

Some industry insiders have said that these fund companies are paving the way for active ETFs.

Active ETFs Are Worth Looking Forward To

Recently, Wu Qing, Chairman of the China Securities Regulatory Commission, publicly stated his support for the launch of active ETFs (exchange-traded open-ended index funds) on the Shanghai and Shenzhen stock exchanges.

On the same day, both the Shanghai and Shenzhen stock exchanges released business guidelines related to actively managed ETFs, standardizing naming rules, the qualifications of managers and fund managers, product investment operations, information disclosure, risk prevention, and other areas. Among them, requirements for fund managers include at least 5 years of active equity public fund management experience; an average scale of no less than 100 billion yuan over the past 3 years; no record of major violations of laws and regulations; and for first-time development, passing the exchange’s special inspection.

According to the Asset Management Association of China, as of the end of May 2026, the total net asset value of domestic public funds in China was 39.48 trillion yuan, setting a new historical high—up 17.01% year on year and up 0.31% month on month.

At present, domestic active equity funds have become increasingly mature after nearly 30 years of development. Also, according to Wind data, as of June 29, the scale of active equity funds across the whole market exceeded 4 trillion yuan, and the number of products exceeded 4,900.

“Active ETFs have been a key focus in product layout and scale growth overseas in recent years. As active ETFs become widely implemented in China in the future, they are expected to become an important growth engine for the scale of China’s ETFs, bringing changes to the landscape and scale of China’s ETF market,” said Zhao Yunyang, General Manager and Chief Investment Officer of the Index and Quantitative Investment Department at Bosera Fund. Compared with traditional active management funds, active ETFs mainly generate trading commissions in secondary-market trading. Their overall fee level is typically lower than the subscription and redemption fees of traditional active funds, and the trading mechanism is more convenient and efficient. Therefore, active ETFs are expected to have a certain substitution effect on active funds in the future.

For investors, active ETFs combine the convenience of ETF trading with low-fee advantages, while also enabling the fund manager’s active management capabilities. Active ETFs provide differentiated tool choices for investors who prefer sector rotation and track investments.

Li Zhan, Chief Economist of the Research Department at China Merchants Fund, believes that active ETFs combine the pursuit of active excess returns with the advantages of on-exchange trading. Investors can trade in real time during trading hours, and capital turnover efficiency is higher than that of off-exchange funds. The publicly disclosed daily holdings can significantly improve transparency, making it easier to track fund operations and reducing the risk of style drift. Compared with off-exchange active management products, the overall fee level may be lower, thereby reducing holding costs. By enriching the categories available for allocation, both retail investors and long-term institutional investors can flexibly allocate, balancing the pursuit of excess returns with liquidity needs, and optimizing the space for selecting assets for the public.

Fangfang Zeng, Public Fund Product Operations Manager at Shenzhen PaiPai Network Fund Sales Co., Ltd., pointed out that daily PCF disclosures will effectively constrain style drift and force managers to standardize investment and operation. The addition of on-exchange sales channels for active products reduces the cost of holding and pushes the industry to shift from “scale expansion” to “value output of investment research.” In the long term, off-exchange active funds with moderate turnover and balanced stock selection will gradually become “on-exchange,” while high-secrecy and high-turnover strategies will remain off-exchange, forming a development pattern in which on-exchange and off-exchange products are layered.

For investors, active ETFs bring three major opportunities. First, improved trading efficiency: continuous on-exchange bidding and real-time buying and selling during trading hours eliminate the waiting period for off-exchange redemptions. In volatile markets, this allows for flexible rebalancing, combining the excess returns from active stock selection with the high liquidity of ETFs. Second, cost and transparency dividends: management fees are usually lower than those of off-exchange active funds, and there are no subscription or redemption service fees. The disclosure of daily holding lists enables investors to track industry and individual stock exposures in real time, avoiding the problems of style drift and information opacity that are common in traditional active funds. Third, richer asset allocation tools: ordinary investors can build a diversified allocation in a one-stop manner using professional active strategies together with broad-based passive ETFs to form balanced portfolios. Institutions can batch-allocate multiple active ETFs to build multi-factor or multi-strategy portfolios, reducing the risk of overconcentration in a single fund. In the long term, active ETFs are also suitable for regular investment (dollar-cost averaging). Retail investors do not need to research individual stocks separately; they can leverage the fund manager’s investment research capabilities to capture excess returns in sub-sectors such as hard technology and dividends, reducing the difficulty of stock selection.

Text by Xu Nannan / Edited by Xu Nan

(Editor: Xu Nannan)

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