chip etf attracts investors amid market shifts
Shanghai, Monday, 12 May 2025.
The Science and Technology Innovation Chip ETF (588200) saw a modest gain of 0.65% today. More significantly, it has attracted funds for four straight days. This sustained investor interest comes as the broader A-share market experiences volatility. While some sectors like military ETFs have surged due to geopolitical tensions, chip ETFs experienced some losses. Despite these fluctuations, the continuous fund inflow suggests a strong underlying confidence in the long-term potential of China’s integrated circuit companies.
etf performance and market context
On May 12, 2025, the Science and Technology Innovation Chip ETF (588200) demonstrated resilience with a 0.65% increase, outperforming some expectations given recent sector volatility [1][4]. The ETF’s appeal is further highlighted by its four-day streak of attracting fund inflows, signaling sustained investor confidence [1]. This activity occurs against a backdrop of broader market shifts, including a nearly 2% rise in the Shanghai Composite Index since the ‘May Day’ holiday [2]. The index closed at 3342 points, recovering losses from April 7 [2].
sector dynamics and fund flows
While the Science and Technology Innovation Chip ETF experiences inflows, other sectors present a mixed picture. Military ETFs have seen gains due to geopolitical factors, specifically tensions between India and Pakistan [2]. Conversely, the Science and Technology Innovation Chip ETF has experienced some losses [2]. Despite sector-specific headwinds, strong inflows into the Science and Technology Innovation Chip ETF and other technology-focused ETFs, including the SSE Science and Technology Innovation Board 50 ETF and the AI ETF, suggest a strategic ‘buy the dip’ approach among investors [2].
financials of integrated circuit firms
The positive investor sentiment is supported by the first-quarter performance of integrated circuit companies listed on the Science and Technology Innovation Board. These firms collectively reported revenue of 72.182 billion yuan, marking a 24% year-over-year increase [4]. Furthermore, their net profit attributable to the parent company reached 4.479 billion yuan, a substantial 73% increase compared to the previous year [4]. This growth is attributed to continued progress in domestic self-sufficiency initiatives and the recovery of downstream demand across AI, IoT, consumer, and industrial sectors [4].
analyst perspectives and market outlook
Analysts suggest that the AI sector’s investment value lies in its robust innovation and diverse applications [4]. Progress in AI technology is accelerating the maturity of AI terminal ecosystems, creating new demand and fostering rapid supply chain development [4]. Dongguan Securities anticipates continued market volatility in the short term but notes improving risk appetite [4]. They believe China’s growing technological prowess will drive a shift towards growth stocks, favoring the technology sector as performance verification concludes and growth prospects strengthen [4].
ubs securities expands etf services
Adding to the positive momentum, UBS Securities will become a primary dealer for several ETFs managed by Guangfa Fund Management, starting May 13, 2025 [5]. This move will allow investors to apply for and redeem listed ETFs through UBS Securities, potentially increasing accessibility and liquidity [5]. The agreement encompasses 56 ETFs, including technology-focused funds, indicating a broader industry trend towards expanding investment options in the technology sector [5].