ST SanSheng Sec. Case; CEO Sentenced.

Behind the boom of US stock-themed funds, local state-owned capital also makes an appearance.

The semi-annual report disclosed by the E Fund Nasdaq 100 ETF Connect Fund shows that a local state-owned institution has become the largest holder of the fund's in-venue shares and has held them continuously for four years since the end of June 2020. The in-venue price of the fund has risen by as much as 99% over the past four years, while Tsinghua University, which was also involved in the layout with local state-owned capital, missed out on the doubling of the fund's returns by exiting too early.

It is worth mentioning that although the aforementioned ETF Connect Fund has an excellent performance, the net management fee disclosed by the related fund is rarely negative. It is reported that the Connect Fund will not charge investors repeatedly for the part of the assets invested in the ETF, but due to the faster decline in management fee income than the decline in customer maintenance fees that should be paid, the net management fee has incurred a loss.

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Local state-owned capital buys US stock ETF in the venue

On August 30, the E Fund Nasdaq 100 ETF Connect Fund released a semi-annual report, which disclosed the list of the top ten in-venue holders of the fund. Among them, Changzhou Investment Group Co., Ltd. holds a proportion of the fund's shares that reaches 5.92% of the total listed shares, making it the largest holder of the total listed shares of the fund. The current market value held is 10.82 million yuan. Changzhou Investment Group Co., Ltd. is a local state-owned capital, held by the Changzhou local government.

Changzhou Investment Group Co., Ltd. had already laid out the E Fund Nasdaq 100 ETF Connect Fund through in-venue purchases at the end of June 2020. According to the report released by E Fund in 2020, Changzhou Investment Group Co., Ltd. held a share proportion that accounted for 1.85% of the total listed share proportion at that time. Since then, Changzhou Investment Group Co., Ltd. has been increasing its holdings in the fund's shares.

It is worth mentioning that Tsinghua University was once a holder of the E Fund Nasdaq 100 ETF Connect Fund shares, and at the end of June 2020, Tsinghua University held 4.2 million shares of the E Fund Nasdaq 100 ETF Connect Fund, accounting for 4.2% of the total listed share proportion of the fund.

As of now, the total scale of the E Fund Nasdaq 100 ETF Connect Fund is 836 million yuan, with a total of 42,600 fund holders, and the number of individual investors holding is close to 97%. The fund's annual return rate this year is 14.7%, the return rate for the past two years is 56.76%, and the return rate since June 2020 is about 84.2%.

However, the profits from holding fund shares in the venue at a premium are greater. Since June 30, 2020, the in-venue listed price of the E Fund Nasdaq 100 ETF Connect Fund has increased by about 99%, significantly outperforming the fund's net value growth rate of 84.2% during the same period. This characteristic of in-venue arbitrage also leads to many ETF funds showing a situation where institutional investors dominate the in-venue trading after going public.

Despite the explosive performance, the net management fee is negative.It is worth mentioning that despite the U.S. stock market reaching new highs in the first half of the year, the well-performing Easy Fund Nasdaq 100 ETF Connect Fund disclosed a net management fee of negative.

The disclosed information of the Easy Fund Nasdaq 100 ETF Connect Fund shows that the management fee the fund should have collected in the first half of 2024 was 161,617.75 yuan. Out of the above management fee, the customer maintenance fee to be paid to the sales organization was 553,640.76 yuan. Therefore, the net management fee collected by the Easy Fund Nasdaq 100 ETF Connect Fund in the first half of 2024 was a loss of 392,023.01 yuan.

Compared with the same period last year, the management fee income collected by the Easy Fund Nasdaq 100 ETF Connect Fund was 3,388,814.39 yuan, of which the customer maintenance fee to be paid to the sales organization was as high as 980,815.71 yuan. Ultimately, the net management fee income collected by the fund in the same period last year was 2,407,998.68 yuan.

It is reported that the management remuneration of the above ETF Connect Fund is calculated at an annual rate of 0.50% of the remaining part after deducting the net value of the target ETF shares in the fund assets from the net value of the fund assets of the previous day. Due to the special type of fund products such as ETF Connect Funds, fund companies are not allowed to charge management fees for the part of the fund assets they manage themselves, but the standard for collecting customer maintenance fees is not reduced, which may result in a negative net management fee.

It is worth mentioning that this year, the net management fee income of several ETF Connect Funds has turned negative. Industry insiders believe that this situation is related to the management fee of the ETF Connect Fund decreasing at a faster rate than the decrease in customer maintenance fees. For example, the management fee income of the Easy Fund Nasdaq 100 ETF Connect Fund this year has decreased by as much as 95% compared to the same period last year, but the customer maintenance fee has only decreased by 44% compared to the same period last year, leading to a loss in the final net management fee income collected.

There is still room for the U.S. stock market in the second half of the year.

Regarding the U.S. stock market, Wu Chen Dong of the Easy Fund Nasdaq 100 ETF Connect Fund believes that the U.S. economy still maintained steady expansion this year, with employment growth and the Consumer Price Index remaining strong, and core inflation has slightly fallen but still has some resilience. The four Federal Reserve interest rate meetings in the first half of 2024 all announced to maintain the federal funds rate target range between 5.25% and 5.50% unchanged, and have suspended interest rate hikes for seven consecutive interest rate meetings. Federal Reserve Chairman Powell recognized the progress of inflation but also emphasized that more data is needed to boost the Federal Reserve's confidence in cutting interest rates. The interest rate dot plot shows that due to the impact of inflation data, the general expectation of Federal Reserve officials for the number of interest rate cuts in 2024 has been reduced from 3 times at the beginning of the year to 1 time, and the Federal Reserve is still hesitant about the interest rate policy path.

In terms of index performance, the constituent stocks of the Nasdaq 100 Index are mostly growth enterprises, which are more sensitive to monetary policy and corporate earnings. The continuous outstanding performance and profitability of leading technology companies, coupled with the market's enthusiasm for the rapid development of artificial intelligence, have driven the comprehensive rise of the U.S. stock market, especially the information technology sector. The Nasdaq 100 Index has risen significantly during the reporting period, with a return higher than the S&P 500 Index.

Regarding this year's second half investment strategy, Wu Chen Dong believes that the fluctuation of U.S. inflation data may cause some disturbance to the market expectation of the Federal Reserve's interest rate cuts, and the results of the U.S. general election in November will also affect the market sentiment of the U.S. stock market to a certain extent. In the short term, the market will still focus on the development of U.S. inflation levels and the Federal Reserve's monetary policy, and the volatility of technology growth enterprises may also be higher than the market average. In the medium and long term, the U.S. stock market is one of the most important components of the global capital market and is also an important module for U.S. family wealth management and overseas investors to allocate global assets.

The rapid development and continuous growth of new technologies such as artificial intelligence will bring new opportunities and development space for technology growth companies. The Nasdaq 100 Index is a representative index of U.S. technology growth companies, and the constituent companies are mostly global leaders in their respective industries. In the medium and long term, the performance of the Nasdaq 100 Index not only continues to exceed the nominal GDP growth rate of the United States but also significantly outperforms other broad-based large-cap indices in the U.S. stock market. In today's booming global index investment, the Nasdaq 100 Index product will continue to be an important tool for sharing investment opportunities in the U.S. technology and Internet industry.