Multiple ETFs undergo share splits, highlighting the inclusiveness of public fund products.

Recently, the broad AI-themed rally has been strong, and the net asset values of related funds have also risen accordingly. In this context, multiple products have opted to split their shares. On July 3, the Semiconductor ETF Guolian An (512480) underwent a 1:2 share split ex-rights, while the AI ETF Huaxia (515070), Semiconductor Equipment ETF Huaxia (562590), Sci-Tech Semiconductor ETF Huaxia (588170), and Communication ETF Guotai (515880) used the same day as the record date to split the registered fund shares.

Data shows that, based on the record date calculation, about 18 ETFs have split their shares since June within roughly a month, almost equaling the total number for the first five months of this year. Industry insiders analyzed that lowering investment thresholds, boosting on-exchange liquidity, and reducing fund market-making costs are the main considerations behind the share splits. After the split, the price per fund share dropped from 2 yuan, 3 yuan, or 4 yuan to 1 yuan or below, lowering the purchase threshold and making it easier for more investors to participate, further highlighting the "inclusive finance" attribute of public funds.

By our reporter Zhang Yun

Intensive share splits

Since June, 18 ETFs have successively split their fund shares, generally at ratios of 1:2 or 1:3. The highest split ratio was for the Semiconductor Equipment ETF (159327) Zhaoshang, reaching 1:5. Additionally, some products split at a ratio of 1:2.5.

Most of the ETFs that implemented splits posted relatively strong performance in June. Among them, those primarily investing in semiconductors (881121), AI, and communication sectors accounted for the majority.

For example, the high-ratio split Semiconductor Equipment ETF (159327) Zhaoshang saw both on-exchange and off-exchange price gains exceed 50% in June, setting a monthly record since the fund's inception and listing.

The Semiconductor ETF Guolian An (512480), which split ex-rights on July 3, saw on-exchange and off-exchange price gains both exceed 30% in June. Using July 3 as the record date, the 1:3 split of Semiconductor Equipment ETF Huaxia (562590) and Sci-Tech Semiconductor ETF Huaxia (588170) saw on-exchange and off-exchange gains both exceed 60% in June; the 1:2 split of AI ETF Huaxia (515070) and Communication ETF Guotai (515880) gained over 10% in the same period.

The Semiconductor Equipment ETF Guangfa (560780), which underwent a 1:3 split ex-rights on June 26, saw on-exchange and off-exchange gains both exceed 60% in June. The Xinchuang ETF (159539) Guotai, which split ex-rights on the same day, rose over 20% in June, with fund shares split at a 1:2 ratio.

The Sci-Tech Chip ETF Guotai (589100) and Sci-Tech 100 ETF Guotai (588120), which split ex-rights on June 24, rose over 30% and 20% respectively in June. The former split shares at 1:2.5, the latter at 1:2. The Integrated Circuit ETF Guotai (159546) and Industrial Mother Machine ETF Guotai (159667), which split at 1:3 on June 10, also performed well in June, with the former rising about 29% in on-exchange and off-exchange prices and the latter up over 18%.

At the fund company level, Guotai Fund's products have been particularly active in share splits. Among the ETFs that implemented splits since June, more than half are managed by Guotai Fund. Besides the products listed above, they also include relatively flat performers in June such as Nonferrous Metals ETF Guotai (159881), GEM 50 ETF Guotai (159375), and Power Grid Equipment ETF Guotai (561380).

Lowering investment thresholds

"After the share split, the price per fund share is lower, which helps reduce the investment threshold." This was a common response from several fund industry insiders interviewed.

Take the Semiconductor Equipment ETF (159327) Zhaoshang as an example. Before the split, the fund's net asset value per share was 4.1435 yuan; after the split, it became 0.8287 yuan. In terms of on-exchange trading price, the fund's closing price briefly exceeded 4 yuan before the split, then dropped below 1 yuan after the split. This means that from the split date onward, the threshold for investors to participate in on-exchange trading dropped from over 400 yuan to around 80 yuan (calculated based on the opening price on the ex-rights date).

Another example: for the already split ex-rights Semiconductor Equipment ETF Guangfa (560780) and Sci-Tech Chip ETF Guotai (589100), the former's on-exchange trading price fell from over 3.7 yuan to around 1.3 yuan; the latter dropped from about 2.7 yuan to around 1.1 yuan. Both saw significantly lower on-exchange trading thresholds.

In contrast, amid this round of broad AI rally, many leading stocks have surged to nearly 1,000 yuan per share, requiring investors nearly 100k yuan to buy one lot (100 shares).

In comparison, after public funds further split their shares, entry amounts as low as about 100 yuan will attract more small and medium investors interested in technology to participate in the broad AI wave through public fund products. At the same time, this is also a direct reflection of public funds practicing inclusive finance concepts.

Coincidentally, shortly after the share split measures were implemented, multiple funds continued to receive net subscriptions, with their sizes increasing significantly. Data shows that since the ex-rights split on June 26, from June 29 to July 1, the Semiconductor Equipment ETF (159327) Zhaoshang received net subscriptions exceeding 400 million shares for three consecutive trading days, while the Semiconductor Equipment ETF Guangfa (560780) received net subscriptions exceeding 500 million shares. Both funds set their single-day size growth records for the year on the day after ex-rights, with the former increasing over 800 million yuan in a single day and the latter over 1.5 billion yuan.

Increased trading activity

It should be noted that these share splits mainly lowered on-exchange trading thresholds, while the threshold for off-exchange subscription and redemption was not lowered. After the share split, many ETFs announced an increase in the minimum subscription and redemption unit shares.

For example, after the 1:2 split, the Semiconductor ETF Guolian An (512480) adjusted the minimum subscription and redemption unit from 2 million shares to 4 million shares starting July 3; after the 1:3 split, the Semiconductor Equipment ETF Guangfa (560780) adjusted the minimum subscription and redemption unit from 1 million shares to 3 million shares starting June 26. Calculated, the subscription and redemption threshold amounts did not change significantly.

What considerations do fund companies have for only lowering on-exchange trading thresholds? It is understood that on one hand, individual investors generally trade ETFs through on-exchange channels, so lowering the on-exchange threshold can better serve the vast majority of investors; on the other hand, lowering the on-exchange threshold is expected to expand the number of investors, diversify the investor base, and improve the liquidity of the fund's secondary market; additionally, increased on-exchange trading activity can reduce ETF market-making costs. Thus, share splits and lower on-exchange thresholds can achieve win-win outcomes in multiple aspects.

Looking at the data, many ETFs that split shares indeed saw an increase in trading volume, especially those riding the strong semiconductor (881121) rally, with particularly prominent growth in trading.

For example, products such as Semiconductor Equipment ETF (159327) Zhaoshang, Semiconductor Equipment ETF Guangfa (560780), and Sci-Tech Chip ETF Guotai (589100) all saw significant increases in average daily trading volume after the ex-rights share split.

However, some industry insiders believe that every coin has two sides. While fund share splits are conducive to lowering investment thresholds and increasing on-exchange trading activity, one should also be mindful of potential disruptions to fund operations from a large influx of short-term funds, as well as possible investor illusions caused by the "cheaper" fund shares.

(Editor: Xu Nannan)

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