Answer:

E Fund Investment Value Analysis of CSI 1000 ETF: Multiple factors favor the small-cap growth style CSI 1000 Index allocation at the right time

2022-07-21 Chen Olin/Yin Qinyi·Guotai Junan Securities Co., Ltd.

This report analyzes the allocation value of the CSI 1000 Index when the macro environment is favorable for the small-cap growth style, and focuses on the analysis of E Fund CSI 1000 ETF (159633)

Abstract:

Small-cap style is mainly affected by market liquidity, and wide credit is good for small-cap stocks. Currently, M2 continues to expand and social financing growth has bottomed out, and it is about to enter a period of easy credit, which is good for the small-cap style. In May 2022, M2 was 11.1% year-on-year, an increase of 0.6% compared with April. The growth rate of social financing stock was 10.5%, an increase of 0.3% compared with April. It is expected to expand further in the future, and small-cap stocks will fully benefit from the abundant Liquidity

The growth style is mainly affected by the state of economic growth, and economic recovery is good for growth stocks. When corporate profits rise as a whole, past high growth is more likely to continue. As a result, growth stocks benefit from the increased certainty of growth. After the domestic epidemic eases, the economy shows greater resilience and the recovery is expected to continue.

The CSI 1000 Index is recommended under the small-cap growth style. There are many constituent stocks of the CSI 1000 Index, and the industry distribution is very balanced. The market capitalization distribution is mainly in the small market capitalization range of about 5 billion to 20 billion. Judging from the historical performance of the index, the index fluctuations are more significant than those of the CSI 300 and CSI 500, and it has higher flexibility during market upswings.

Analysis of investment value of CSI 1000 Index:

After sufficient adjustment, the index valuation is currently in the process of steady recovery and is still at a level of about one time the historical average - one standard deviation. , there is significant room for future valuation repair.

The content of specialized, specialized, new and small giants in the CSI 1000 Index is significantly higher than that of other broad-based indexes, and will fully benefit from targeted policy support.

The index’s profitability has steadily recovered since the epidemic, showing that the index has strong profitability resilience.

Institutional attention has increased significantly since 2019, and the latest annual report shows that the proportion of institutional allocation has doubled from the low point.

CSI 1000 stock index futures and stock index options will be listed on July 22, 2022. Judging from historical experience, the launch of stock index futures and stock index options contracts will help improve index liquidity.

Related products with investment value for the CSI 1000 Index: E Fund CSI 1000 ETF (159633), which will be issued from July 22, 2022 to July 29, 2022, as a passive index Investment products closely track the performance of the CSI 1000 Index.

Risk warning: 1. This conclusion is only derived from the quantitative model and does not coincide with the strategic views of the institute. 2. The conclusion is mainly based on historical data, and the market environment may change in the future.