What is the capital layout behind FTSE China A50ETF?
According to the tracking data of FTSE China A50ETF, Markit and Bloomberg, in May, their short-selling ratio soared to five times, from 1.3% to 6. 1%, the highest level since April of 20 15.
At the same time, another ETF has a record high short position. The short-selling ratio of ishare An Shuo China ETF traded in the United States soared from 3% 1 a month ago to 18%, setting a two-year high. This ETF tracks the large-cap stocks of A shares.
Judging from the large proportion of ETF shares purchased by foreign investors, the high probability shows that there is a market behind it-in other words, the purchase behavior is of reference value, but it cannot be guaranteed.
This time, the A50ETF won a historic one-day net subscription, but it was accompanied by a multi-year high of short positions in the A50ETF. The so-called long-short confrontation, the logic behind the differences is actually not complicated: it has a lot to do with MSCI when the dust settles.
The inclusion of A-shares in the MSCI Emerging Markets Index means that foreign capital must lay out the China stock market. For the unprecedented subscription of A50ETF, basically foreign capital has made full preparations for the inclusion of a shares in MSCI in advance. RQFII-ETF is a tool for foreign investors to invest in A shares through Hong Kong. On the eve of the high probability of A-shares being included in MSCI, foreign capital will be laid out in advance to avoid being passive after the news is confirmed.
In other words, on the eve of A-shares' high probability of being included in MSCI, the allocation of A-shares by foreign investors is not based on the expectation of A-shares' rising, but on their own future card allocation.
What about shorting and soaring? It's not complicated: since it's just an asset allocation card, then transfer is not the fundamental goal to consider, but security is. In this uncertain background, the layout of A shares is undoubtedly a huge risk. For a risky and necessary behavior, the only choice is hedging.
In other words, the short selling of A50 by foreign investors is not based on the expectation of future A-share slump, but to hedge the risk exposure that they have to allocate A-shares.
This means that for A-share investors, the influx of foreign capital in these two days needs to be vigilant. The influx of foreign capital is not based on the expectation of the rise of A shares, but on the expectation of the need to allocate A shares in the future, in order to seize the opportunity. Strategy.
Because of this, foreign investors hedge the risk that A shares may plummet in the future by shorting. In other words, in this uncertain market, foreign capital has completed the layout of A shares with parachutes; But for A-share investors, we are streaking!