Post-Adjustment ChiNext Index Attracts Global Assets with Low Valuation and High Growth Potential
GUANGZHOU, China, June 13, 2025 /PRNewswire/ -- Starting June 16, the ChiNext Index will implement methodology adjustments, including a 20% cap on individual stock weights and an ESG negative screening mechanism, aiming to enhance the index's focus on high-growth, innovative firms while aligning with global standards. As of June 10, ETFs tracking the ChiNext Index held more than US$ 16.1 billion in assets, led by the E Fund ChiNext ETF (159915) accounting for US$ 11.6 billion under E Fund Management, China's largest mutual fund manager.
Launched in 2010, the ChiNext Index, comprising 100 growth-oriented and innovative enterprises listed on the ChiNext Board, has undergone 53 revisions, reflecting China's economic transformation. The latest changes will further optimize its structure to emphasize emerging growth sectors –new-generation information technology (34%), new energy vehicle (24%) and healthcare (12%), underscoring its alignment with China's strategic shift toward high-tech innovation.
According to Wind, its constituent companies have posted revenue growth of 9.5% YoY and ROE exceeding 12.5% in Q1 2025, demonstrating resilient profitability and breakthroughs in AI chips, EV batteries, and precision medicine. Valuation metrics reinforced appeal: the index trades at a 31x P/E ratio as of June 10, near the 10th percentile since its listing.
By curbing concentration risks and embedding ESG criteria, the reforms strengthen the index's role in reflecting industrial evolution in China and global investment trends. International participation has surged through cross-border channels like Stock Connect, QFII, and feeder funds listed on foreign exchanges. The E Fund ChiNext ETF (159915), the largest among related ETFs, has consistently been the preferred instrument for international investors seeking exposure to China's tech-driven growth since its inclusion in the ETF Connect program in 2022, Over the past year, the fund has drawn in approximately US$ 2.55 billion, highlighting its appeal as a pivotal option in China's equity ETF market.
About E Fund
Established in 2001, E Fund Management Co., Ltd. ("E Fund") is a leading comprehensive mutual fund manager in China with over RMB 3.5 trillion (USD 497 billion) under management.* It offers investment solutions to onshore and offshore clients, helping clients achieve long-term sustainable investment performances. E Fund's clients include both individuals and institutions, ranging from central banks, sovereign wealth funds, social security funds, pension funds, insurance and reinsurance companies, to corporates and banks. Long-term oriented, it has been focusing on the investment management business since inception and believes in the power of in-depth research and time in investing. It is a pioneer and leading practitioner in responsible investments in China and is widely recognized as one of the most trusted and outstanding Chinese asset managers.
Source: E Fund. AuM includes subsidiaries. Data as of March 31, 2025. FX rate is sourced from PBoC.
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