Outflows slow down! In March, stock ETFs flock to defensive sectors. These assets lead in purchases.

Oriental Fortune Choice data shows that in March, stock-based ETFs had net redemptions of 52.683 billion yuan. In January and February before that, stock-based ETFs had net redemptions of 774.213 billion yuan and 81.642 billion yuan, respectively. Over the first three months, the total net redemption amount for stock-based ETFs reached 908.538 billion yuan.

Judging from the situation in March, although the A-share market fell into a period of adjustment, the net redemption scale of stock-based ETFs actually declined compared with the previous month, and the trend of net redemptions slowed further. In that month, broad-based ETFs remained the main outflow source. The A500 ETF from Huaxia, the ChiNext ETF from E Fund, and the CSI 500 ETF from Southern were in the top three, with net redemption amounts of 8.312 billion yuan, 7.610 billion yuan, and 7.519 billion yuan, respectively.

Industry ETFs were the primary targets for inflows of funds in March. Among them, the Huaxia Electricity Grid Equipment ETF had the largest net subscription that month, at 8.958 billion yuan. The Tianhong Nonferrous Metals ETF, the E Fund Energy Storage Battery ETF, the Guotai Electricity Grid Equipment ETF, the Guotai Oil ETF, the Power ETF from GF Securities, and the Huaxia Medical ETF had net subscription amounts that ranked among the top, all exceeding 2 billion yuan.

In addition, driven by risk-averse sentiment and defensive thinking, the Huaxia Free Cash Flow ETF’s net subscription amount was also among the leading entries. In March, its net subscription was 4.518 billion yuan. Furthermore, the Science and Technology Innovation 50 Index saw a sharp adjustment of 15.45% that month; funds had a net subscription of 3.7 billion yuan, indicating a clear bottom-fishing intention.

At this point, Everbright Securities believes that although both sides of the U.S.-Iran conflict have issued signals of ending the conflict, given that there have been multiple instances of “unpredictable back-and-forth” between the two parties previously, and that the global oil and gas supply crisis has already emerged, market expectations remain relatively cautious. Under the chain-reaction economic shifts triggered by geopolitical conflict, the short-term market may continue to maintain weak trend consolidation, and it is necessary to wait for definite signals that geopolitical factors have further eased. Some consumer sector segments with defensive characteristics such as “improved fundamental expectations + low valuation” are expected to become new rotation hotspots.

（Source: Oriental Fortune Research Center）