Broad-based funds ebb, gold ETFs overtake, and the fund war in the ETF world has just begun.

The ETF world is experiencing an undercurrent of change, with the signature event perhaps being the "change of ownership" of the largest ETF.

According to the latest exchange data, as of July 3, the size of Huaan Gold ETF rose to over 90 billion yuan, surpassing the CSI 300 ETF Huatai-PineBridge, which had been the largest for many years, to be crowned the "top fund" in the ETF market.

The rise of Huaan Gold ETF is not only attributable to the stabilization of gold prices over the past six months (triggering bargain hunting) and the boom in multi-asset asset management products in the industry (which generally allocate a portion to gold), but also, to some extent, "benefited" from the overall decline in the size of stock ETFs.

The latter is closely related to changes in the flow of funds from important institutions, which not only rewrites the size rankings of individual products, but also directly shakes the long-standing market order. And the "change of ownership" of the industry's largest ETF also gives Huaan Fund, its manager, an extra "trump card" amid rumors of a merger with Haitong Fund.

Gold ETF Overtakes to Become No. 1

In the "golden age" of passive investing in the past two years, the CSI 300 ETF has been regarded as the unshakeable "anchor" of the industry, and for a long time, the three largest ETFs in the industry were all CSI 300 ETFs.

But now, the leader has changed hands.

Wind data shows that with the recent rebound in international gold prices, market funds have quickly flowed back into domestic gold ETFs. At the close on July 2, Huaan Gold ETF's size was only 87.16B yuan, ranking second in the industry. However, after one trading day, the scales completely tipped. On July 3, Huaan Gold ETF saw a single-day net inflow of as much as 2.94B yuan, with its latest size jumping to 90.1B yuan; at the same time, the industry's largest CSI 300 ETF experienced fund outflows.

Under this shift, Huaan Gold ETF has officially become the largest ETF product in the domestic market.

Commodity and Gold ETFs Show Strong Fund Attraction

The ascension of Huaan Gold ETF reflects a shift in the flow of funds in the entire ETF market — the short-term capital attraction ability of stock funds has weakened, while the "capital attraction" ability of commodity ETFs and some sector-themed ETFs is significantly strengthening.

A typical example is that among large ETF products with a market size exceeding 25.7k yuan, at least Huaan Gold ETF, China AMC STAR 50 ETF, Guotai Securities ETF, Harvest STAR Chip ETF, and Guotai Communication ETF now have sizes exceeding 50 billion yuan.

The size of sector ETFs and commodity ETFs is rising among peers.

In addition, the internal structure of the stock ETF market is also undergoing profound changes. Data shows that since the beginning of this year, the size of broad-based ETFs has dropped from 2.57 trillion yuan to less than 1 trillion yuan. In the same period, the size of sector and theme ETFs rose counter-trend from 1.09 trillion yuan to about 1.43 trillion yuan. That is to say, the size of sector and theme ETFs has already surpassed that of broad-based ETFs.

Changes in "Weights" in the "Huaan-Haitong Merger"

After Huaan Gold ETF's size topped the list, its impact may extend beyond the product level to affect the industry position of fund companies.

On one hand, with the industry's largest ETF in hand, Huaan Fund's overall industry size and influence may increase in the future.

On the other hand, as subsidiaries of Guotai Haitong, Huaan Fund and Haitong Fund are in the process of integration. At this moment, having more business highlights is obviously beneficial for Huaan Fund, one of the merging entities.

In fact, data shows that Haitong Fund also performed well in the ETF race this year (its ETF assets under management increased by 10k yuan during the year, ranking second in the market in terms of increment). The two are competing forward, which undoubtedly adds to the appeal of the future merged company.

Size Fluctuations Will Be the Norm

From the perspective of historical cycles, the rise and fall of ETF sizes is a normal phenomenon in the industry. With the fluctuations in international gold prices and changes in the valuation of A-share indices, the battle for the "top spot" between Huaan Gold ETF and stock ETFs may continue.

This has also happened overseas.

Meanwhile, the ETF industry rankings driven by product sizes are also spreading. On June 3 this year, E Fund briefly "overtook" China Asset Management, breaking the latter's seven-year monopoly as the ETF "top dog"; however, just 11 trading days later, on June 18, China Asset Management completed the "counter-overtake" and regained the top spot. As of July 3, China Asset Management managed ETFs worth 10.9k yuan, with E Fund closely following at 14.3k yuan. The two giants are neck and neck, and the competition for the top spot has become the norm.

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