A number of leading fund giants have taken action to make strategic deployments in this track.

Dividend ETFs are approaching the 200 billion yuan mark, with multiple public offering funds launching new dividend growth ETFs on the same day

Before the National Day holiday, fund companies have not stopped their product layout.

On the evening of September 29, public information on the China Securities Regulatory Commission (CSRC) website shows that the first batch of CSI Dividend Growth ETFs has been submitted for approval. Products filed by multiple fund companies including China Asset Management, E Fund, Southern Asset Management, Fullgoal Fund, Harvest Fund, China Merchants Fund, ICBC Credit Suisse Asset Management, Wanjia Asset Management, and Caitong Asset Management are all in the "application materials accepted" status.

Judging from the submitting fund companies, leading ETF manufacturers are gathered, with 9 fund companies submitting applications on the same day, which is very likely to be approved at the same time. It is predictable that this will be another product that will face fierce competition in issuance.

Multiple ETFs based on dividend growth strategy submitted for approval, adding "growth" attribute on top of "high dividend yield"

The CSI Dividend Growth Index was released in December 2017. This index selects 50 securities of listed companies with good historical dividend growth performance and high dividend growth potential as index samples, to reflect the overall performance of securities of listed companies with continuously growing dividends.

A fund company introduced that the CSI Dividend Growth Index is positioned as a dividend growth strategy for the A-share market. This strategy has been widely applied overseas, which mainly reflects the overall performance of listed companies with continuously growing dividends.

Compared with classic dividend indices such as CSI Dividend and Dividend Low Volatility, the CSI Dividend Growth Index adds growth attributes on the basis of "high dividend yield", with higher historical annualized return and volatility, and relatively obvious independent trend. It is more suitable for an environment of moderate economic recovery and downward central interest rate, which can not only use high dividend yield as a "safety cushion", but also capture the valuation repair opportunities brought by earnings improvement.

Judging from constituent stocks, the industry distribution of dividend growth is dominated by raw materials (23%), finance (17%), and industry (16%), with a relatively balanced distribution. The CSI Dividend Index is relatively overweight in finance and energy, underweight in raw materials and main consumer sectors, the Dividend Low Volatility Index has more than 50% of its weight in the financial industry, and the Dividend Quality Index focuses on medical health, raw materials, and information technology, all of which have obvious distinctions.

The top ten weighted stocks of the CSI Dividend Growth Index are China Merchants Bank, Zijin Mining, PetroChina, Kweichow Moutai, Haier Smart Home, NARI Technology, CMOC, Fuyao Glass, Bank of Ningbo, and Huaxia Bank respectively.

The total size of dividend-themed ETFs is nearly 200 billion yuan

With the submission of the first batch of dividend growth ETFs this time, dividend-themed ETFs will usher in a new round of expansion. As of September 28, there are 82 dividend-themed ETFs in the whole market, with a total size of 196.838 billion yuan, an increase of about 13 billion yuan compared with the size at the beginning of the year, and the overall size grows steadily.

From the perspective of product pattern, 5 dividend-themed ETFs have a size of over 100 billion yuan. The Huatai-PineBridge Dividend Low Volatility ETF ranks first with 30.404 billion yuan, followed by the Southern S&P China A-Share Large Cap Dividend Low Volatility 50 ETF with 20.375 billion yuan. Huatai-PineBridge SSE Dividend ETF, E Fund CSI Dividend ETF, and E Fund CSI Dividend Low Volatility ETF rank third to fifth with 18.881 billion yuan, 17.969 billion yuan, and 12.17 billion yuan respectively. It is worth noting that both Huatai-PineBridge Fund and E Fund have two ETFs in the "100 Billion Club".

From the perspective of capital flow, in terms of net inflow, the two dividend-themed ETFs under E Fund take the lead in net inflow, among which E Fund CSI Dividend Low Volatility ETF has a net inflow of 75.76 billion yuan, E Fund CSI Dividend ETF has a net inflow of 57.98 billion yuan, followed by Southern S&P China A-Share Large Cap Dividend Low Volatility 50 ETF, Bosera CSI Dividend Low Volatility 100 ETF, Huatai-PineBridge Dividend Low Volatility ETF, etc., with net capital inflow between 3 billion yuan and 5.5 billion yuan. Most of these products are 100-billion-level leading ETFs, showing the trend of capital concentrating on leading products. As for the Hong Kong stock dividend index, due to the pressure on performance, many Hong Kong stock related dividend ETFs rank top in net outflow.

Judging from the data of this year and the layout direction of fund companies, the long-term logic of dividend strategy remains unchanged, but product innovation and competition will intensify.

On the one hand, the product line of dividend-themed ETFs continues to be refined. From the traditional SSE Dividend, CSI Dividend, to Dividend Low Volatility, Dividend Quality, Central SOE Dividend, and Hong Kong Stock Connect Dividend, and then to Dividend Low Volatility 100, A500 Dividend Low Volatility, etc., the tracking indices of dividend-themed ETFs are increasingly rich, and investors have more diversified choices. On the other hand, the exploration of "dividend +" strategy is accelerating. In addition to the traditional dividend low volatility, segmented strategies such as dividend quality, dividend value, and central SOE dividend are emerging continuously. However, some fund company personnel also stated directly that the performance of products related to dividend strategies varies, and investors need to carefully identify the effectiveness of strategies and product liquidity.

In the environment of low interest rate and volatile market, the allocation value of dividend strategy is still recognized by the market. However, with the surge in the number of products and intensified homogenized competition, the head effect of products is prominent. Among the established dividend-themed ETFs, as many as 32 ETFs have a size of less than 200 million yuan, and the market may usher in a reshuffle in the future. For investors, choosing products with moderate size, good liquidity and clear tracking index logic is still the key to participating in dividend investment.

This article is from the WeChat Official Account "China Fund News" (ID: chinafundnews), author: YAN Jun, published with authorization from 36Kr.