On January 18, the Shenzhen Stock Exchange released the 2023 ETF Market Development White Paper. It pointed out that in 2023, with the further vigorous development of the global ETF market, both the number and scale of products reached new highs, the domestic ETF market also achieved rapid development against the backdrop of stock market volatility. By the end of 2023, there were a total of 897 domestic ETFs, with a total scale exceeding 2 trillion yuan for the first time. Among them, the total asset size of non-monetary ETFs was 1.84 trillion yuan, an increase of 497.1 billion yuan from the end of 2022, a growth of 18.53%. In particular, existing products dominated by broad-based ETFs became an important choice for asset allocation, with existing ETFs adding 421.3 billion yuan, accounting for 85% of the overall market growth. Industry-themed and strategic ETFs also shined, with technology-themed ETFs increasing by 64.2 billion yuan year-on-year and dividend-themed ETFs increasing by 23.6 billion yuan year-on-year. Overall Development of the ETF Market ETF Product and Quantity Reach Historic Highs By the end of 2023, there were 897 domestic ETFs, with a total scale of 2.05 trillion yuan. Among them, there were 870 non-monetary ETF products, with a total asset size of 1.84 trillion yuan. Compared to the end of 2022, the number of products increased by 134, a year-on-year increase of 18.20%; and the asset size increased by 497.1 billion yuan, a year-on-year increase of 36.89%. In terms of types, domestic ETFs (excluding monetary funds) were still dominated by stock-type, accounting for 81.1%. QDII type accounted for 12.9%, as the second-largest category. Bond-type and commodity-type ETFs accounted for 4.3% and 1.7% respectively. The proportions of various types of ETFs were basically consistent with the end of 2022. Initial Issue Contributions Decline, Broad-based ETFs Active in New Issuance In 2023, the new issuance market remained active, with a total of 157 non-monetary ETF funds established, with a total initial size of 104 billion yuan. The proportion of new issuance product contributions to the total size dropped significantly to 15.1%. In 2023, the new issuance market of broad-based ETFs was active, with a total of 48 new issuances, raising 38.5 billion yuan, accounting for 38.05% of the total annual issuance size, mainly focusing on new-generation broad-based products such as the SZSE 50, ChiNext 200, Sci-Tech Innovation Board 100, CSI 2000, and others. ETF Existing Size Continues to Grow, Mainly Dominated by Broad-based ETFs In 2023, the existing size of ETFs grew by 421.3 billion yuan, with broad-based ETFs and industry-themed ETFs contributing to the main increase in existing size. Among them, the size of broad-based ETFs increased by 226.5 billion yuan, accounting for 53.75% of the increase in existing size; the size of industry-themed ETFs increased by 89.1 billion yuan, accounting for 21.14% of the increase in existing size. In 2023, there were 10 products with incremental size exceeding 10 billion for the full year, highlighting the scale effect. Broad-based ETFs, represented by the SSE 300, ChiNext 50, CSI 50, and ChiNext Index, were at the forefront of the increase. ETF Connect Fund Demand Rises, Rapid Growth in Number and Size of Products With the acceleration of market rotations in recent years and the development of internet channels, the demand for off-market index investment has increased, leading to a further increase in the number and size of ETF Connect funds. By the end of 2023, the total assets of 485 ETF Connect funds in the entire market reached 376.8 billion yuan, an increase of 47.6 billion yuan year-on-year, and a growth of 14.48% year-on-year. In 2023, a total of 121 new ETF Connect fund products were established, raising a total of 20.6 billion yuan, with the number increasing by 59.21% year-on-year and the size increasing by 29.30% year-on-year. Industry Concentration Maintained at High Levels, Head Management Advantage Highlighted By the end of 2023, 51 fund companies domestically owned listed non-monetary ETF products. Among them, the top ten fund companies collectively managed non-monetary assets totaling 1.46 trillion yuan, accounting for 79.13% of the total market scale, with a slightly elevated concentration compared to 2022. Five management companies had non-monetary ETF management assets exceeding one trillion yuan, with Huaxia Fund managing assets reaching 401.7 billion yuan, with an increase in total assets exceeding 120 billion yuan for the year, demonstrating the market characteristics of "one superior, multiple strong". Survival of the Fittest Accelerates, Liquidations Gradually Becoming Common In recent years, the number of liquidations in the domestic ETF market has increased significantly, with some homogeneous and small-scale products being liquidated due to loss of competitiveness, gradually forming a market-based survival of the fittest mechanism. In 2023, a total of 23 ETFs were liquidated, including equity-type, bond-type, commodity-type, with 10 industry-themed products being liquidated. Development of Various Types of ETF Markets Significant Growth in Broad-based ETFs, Product Layout becoming more Refined In 2023, in a market environment of turbulent decline, broad-based ETFs became the bottom-fishing tool for investors, with a significant increase in size. By the end of 2023, the number of broad-based ETFs was 214, with a total scale of 851.6 billion yuan, an increase of 268.1 billion yuan compared to the previous year, a growth of 45.94%. In terms of size changes, ETFs tracking the SSE 300 Index increased by 120.8 billion yuan year-on-year, ranking first among broad-based indices, while ETFs tracking the CSI 500 Index decreased by 10.8 billion yuan year-on-year, becoming the broad-based index with the largest decrease in size. At the same time, broad-based ETFs were.The product system is also moving towards a new development stage with multiple levels, and the product layout is becoming increasingly perfect. In 2023, several new characteristic broad-based ETFs will be successively launched, such as the core broad-based Shenzhen 50 ETF, the small-cap style focused CSI 2000 ETF, the CSI A-share ETF covering the entire market, and differentiated products within specific sectors, such as the ChiNext 100 ETF and the SME board 200 ETF.Chart 8: Historical Size and Quantity of Domestic Broad-based ETFs (Right Axis) Data Source: Wind, in billions, as of the end of 2023 Chart 9: Top Ten Broad-based Indexes Tracked by ETFs and Changes in Size Data Source: Wind, in billions, as of the end of 2023 Industry-themed ETFs steadily expanding, with Technology ETFs leading the way Since 2017, as China's economy has transitioned from high-speed growth to high-quality development, and the A-share market has shifted towards a more structured trend, industry-themed ETFs have rapidly developed. By the end of 2023, there were a total of 486 industry-themed ETFs with a combined size of 586.8 billion yuan, an increase of 105.1 billion yuan (a growth of 21.82% year-on-year). Among them, Technology ETFs, represented by semiconductor ETFs, saw the largest increase in size, up by 64.2 billion yuan year-on-year; followed by Healthcare ETFs, which increased by 36.8 billion yuan year-on-year. As various industry-themed ETFs gradually improve their layouts, the market is paying more attention to new emerging ETF products that align with national policies and industrial transformation directions. Strategies have become more refined, with ETF products launched in areas like tech innovation, robotics, central enterprises, semiconductor materials and equipment, etc. Chart 10: Historical Size and Quantity of Industry-themed ETFs (Right Axis) Data Source: Wind, in billions, as of the end of 2023 Chart 11: Changes in Size of Various Industry-themed ETFs in 2023 Data Source: Wind, in billions, as of the end of 2023 Cross-border ETFs continuing to grow, becoming a blue ocean market for differentiated positioning Driven by overseas investment demands, the variety of cross-border products continues to expand. Currently, cross-border products cover multiple regions including Hong Kong, the US, Japan, Germany, France, Southeast Asia, etc., with a focus on broad-based, high-tech, and new economy products, serving as an important tool for investors to position themselves in overseas markets. In 2023, cross-border ETFs continued their high growth trend from 2021, with a size increase of nearly 90 billion to 286.7 billion yuan, a growth of 44.82% year-on-year, with the number of products exceeding 140. By the end of 2023, a total of 9 cross-border ETFs had surpassed a size of 10 billion yuan. Chart 12: Changes in Size and Quantity of Domestic Cross-border ETFs Data Source: Wind, in billions, as of the end of 2023 Chart 13: Size of Various Types of Cross-border ETFs Data Source: Wind, in billions, as of the end of 2023 Interest in Strategy-based ETFs continues to rise, with dividend factors favored by capital As China's capital markets mature and develop, Smart Beta strategies are gaining more attention, and strategy-based ETFs are providing important investment tools for various funds. By the end of 2023, there were a total of 65 strategy-based ETFs with a combined size of 564 billion yuan, an increase of 234 billion yuan year-on-year (a growth of 71.11%), mainly covering factors such as dividends, value, and growth. Among them, dividend-based ETFs stood out, with a size of 44.8 billion yuan, an increase of 23.6 billion yuan year-on-year (a growth of 110.64%), making it the most popular strategy-based ETF product. However, domestic strategy-based ETFs are still in the early stages of development, with significant room for factor enrichment and overall growth compared to developed markets. Chart 14: Historical Size and Quantity of Domestic Strategy-based ETFs (Right Axis) Data Source: Wind, in billions, as of the end of 2023 Bond ETFs steadily growing, with significant growth in short-term and policy bank bond ETFs As the bond market rapidly develops, index bond investing is gradually being recognized by the market. In 2023, the overall bond ETF market continued its growth trend from 2022, with the number of products reaching 19 and the size increasing by 27.3 billion yuan to 80.2 billion yuan, a growth of 51.50% year-on-year. Against the backdrop of banking financial products and trusts breaking rigid redemption, continuous interest rate declines, and increased volatility in equity markets, medium-term bond ETFs have become popular among investors, with 5 policy bank bond ETFs experiencing a size increase of 6.5 billion yuan year-on-year, with a total size of 28.8 billion yuan. Chart 15: Historical Size and Quantity of Domestic Bond ETFs (Right Axis) Data Source: Wind, in billions, as of the end of 2023 Commodity ETFs stabilizing and rebounding, with Gold ETFs remaining dominant Currently, there are limited types of domestic commodity ETFs, including 14 Gold ETFs and 3 commodity futures ETFs. In 2023, with increasing risk aversion and rising gold prices, the size of domestic commodity ETFs increased by 8.6 billion yuan to 30.6 billion yuan, gradually stabilizing and rebounding. Among them, there were a total of 14 Gold ETFs, with a size of 29 billion yuan, accounting for 95% of the total commodity ETF size, an increase of 5.9 billion yuan year-on-year (a growth of 38.18%). Chart 16: Historical Size and Quantity of Domestic Commodity ETFs (Right Axis) Data Source: Wind, in billions, as of the end of 2023 Chart 17: Proportion of Various Types of Domestic Commodity ETFs Data Source: Wind, as of the end of 2023