Afternoon broad-based ETFs lead the rebound with increased volume, buying more as it falls. This year, 40 billion has entered the market through ETFs.

Broad-based ETFs revive market with heavy volume support. On January 8th, the Shanghai Composite Index once fell below 3200 points, when market sentiment was low, but in the afternoon opening, core broad-based ETFs such as the SSE 300 ETF and the CSI A500 ETF led the way with heavy volume, causing major indices to rebound. By the closing bell, there were 23 ETFs in the market with trading volume exceeding 10 billion, with the Huatai Bairui SSE 300 ETF leading at 54.41 billion yuan in trading volume. The Huaxia Kechuang 50 ETF, the E Fund ChiNext ETF, the Guotai CSI A500 ETF, and the Huaxia CSI A500 ETF all had trading amounts exceeding 40 billion yuan. In terms of trading volume, the A500 Index has shown significant volume increase recently, with turnover rates reaching 20%, reflecting the level of activity in this index. The continuous heavy volume support for broad-based ETFs drove a V-shaped market reversal, especially with the ChiNext Index, which initially dropped more than 3% before turning positive and closing down at 0.98%. The total trading volume in the Shanghai and Shenzhen markets was 1.24 trillion yuan for the day, with an increase of 166.3 billion yuan from the previous trading day. Stock ETFs receive 40 billion yuan in net inflows this year The significance of "buying more as prices fall" for broad-based ETFs continues to increase. Since the beginning of the year, with a 3.63% decline in the Shanghai Composite Index, funds have been continuously entering the market through ETFs. As of January 7th, the total net inflow of funds into stock ETFs this year has reached 40 billion yuan. In the first 3 trading days of the year, there was a noticeable oscillation and retracement, yet daily net inflows of billions of yuan continued. The total net inflow into stock ETFs in the first 3 trading days reached 46.7 billion yuan. However, on January 7th, with the A-share market seeing its first positive day, ETFs saw a net outflow of 6.7 billion yuan. In terms of profit-taking funds, the net outflows were mainly seen in growth sector ETFs such as Kechuang 50 ETF, CSI 1000 ETF, and Semiconductor ETF. Broad-based ETFs are favored by investors, with 11 ETFs receiving net inflows exceeding 10 billion yuan this year, 10 of which are broad-based ETFs. Among them, the Huatai Bairui SSE 300 ETF had a net inflow of 4.735 billion yuan, while the Guotai CSI A500 ETF and the E Fund ChiNext ETF both had net inflows exceeding 2 billion yuan, at 2.249 billion yuan and 2.124 billion yuan respectively. Funds slightly cautious ahead of Chinese New Year With 14 trading days left until the Chinese New Year holiday, during a period of policy ambiguity, funds appear to be more conservative. The latest margin trading data from China Securities Finance Corporation (CSF) shows that margin buying has fallen below one trillion for 3 consecutive days. On January 6th, margin buying was at 79.671 billion yuan, hitting the lowest point since September last year. The fluctuations in margin buying reflect the strength or weakness of bullish forces in the market. Since September, margin buying reached a peak of 406.38 billion yuan on October 8th, but recently, with a subdued market sentiment, margin buying has gradually declined, currently down by 80% compared to the peak period. On January 7th, margin buying slightly increased to 92.772 billion yuan, and the latest margin balance was 18.3 trillion yuan, with margin financing at 18.2 trillion yuan. Institutions point out that recent market volatility is partly due to the need to relieve the pressure from previous rapid price increases, as well as preemptive interpretation of future uncertainties. Each fluctuation and consolidation period is a process of digesting previous gains, allowing for more potential space for future market trends, and gradually revealing the main trends in the midst of fluctuations. Institutions emphasize the importance of dumbbell strategy While the market is still discussing the Spring Festival rally, A-shares are facing a "late spring chill". Institutions believe that the government's demand for the stock market in 2025 is very clear: stabilizing the real estate and stock markets is a established strategy. The market adjustments at the beginning of the year are expected to gain attention from decision-makers. Price fluctuations in risk assets, whether up or down, are normal in the market, and overly blaming such movements is not meaningful. Decision-makers have significant expectations for achieving established goals and the level of risk tolerance, which is of great value for the restoration of the market ecology. Standing at 3200 points, where should investors go next? According to Chuangjin Hexin Fund, relative to timing the market, asset allocation is more important, depending on the recognition of a company's core competitiveness and understanding of risk premium impact. Given the expected policies, investors should pay more attention to the micro-level performance of the market, which is the basic strategy for asset allocation. Therefore, until there is a substantial change in the characteristics of "periphery to center," capital needs to consider real returns, and the dumbbell strategy should not be abandoned. In terms of style selection, Bosera Fund points out that in the short term, A-shares are under pressure, and the correction of overcrowded short-term trading in small caps has just begun. With the decline in risk-free rates, continuous net inflows into dividend ETFs, and relative advantages in large-cap low volatility assets. This article is a reprint from "Cailianshe" edited by Li Fo.