Shared Base Jing | Comparative Analysis of Same-Theme ETFs (3): For Grid Equipment ETFs, What Are the Differences in the Underlying Indices They Track?

Daily Economic News

Reporter: Huang Xiaocong Editor: Peng Shuiping

Recently, the power grid equipment sector has been very hot, with related thematic indices continuously reaching new highs, and many concept stocks and ETFs steadily rising.

Among them, in terms of ETFs, currently there are three ETF products that all include “Power Grid Equipment” in their names. In this issue, we will compare these products and the indices they track.

Wind data shows that the three power grid equipment ETFs are as follows:

These three products include two that were established in 2024 and one that was just launched this year. In terms of size, the China Asset Management Power Grid Equipment ETF far exceeds the other two, but the E Fund Power Grid Equipment ETF, which was recently established, is also very strong. Its latest scale has not only surpassed the GF Fund Power Grid Equipment ETF but has also doubled since its inception.

Apart from differences in size, the main distinction among the three products lies in the indices they track. The E Fund Power Grid Equipment ETF and GF Fund Power Grid Equipment ETF both track the Hang Seng A-Share Power Grid Equipment Index, while the China Asset Management Power Grid Equipment ETF tracks the CSI Power Grid Equipment Theme Index.

The main differences between these two indices are:

1. Constituents

The Hang Seng A-Share Power Grid Equipment Index consists of the 50 largest Shanghai, Shenzhen, and Beijing-listed companies involved in power grid equipment, with the requirement that their power grid-related revenue accounts for no less than 40%.

In terms of weightings, the top ten holdings account for nearly 60%, higher than the CSI Power Grid Equipment Theme Index. Notably, TBEA and Sany Electric each have weights exceeding 10%.

The CSI Power Grid Equipment Theme Index selects 80 listed companies involved in ultra-high voltage, smart grid construction, and related fields. The overall composition is more diversified, with the top ten holdings accounting for 55.73%.

2. Past Performance

Looking at historical performance, Wind data shows that over the past one year, three years, and five years, the Hang Seng A-Share Power Grid Equipment Index has had higher annualized returns than the CSI Power Grid Equipment Theme Index.

In terms of volatility, the Hang Seng A-Share Power Grid Equipment Index has had higher annualized volatility over the past three years, while over the past five years, the CSI index’s volatility is slightly higher.

3. Valuation Levels

Comparing the current valuation levels of the two indices, after nearly a year of growth, both the Hang Seng A-Share Power Grid Equipment Index and the CSI Power Grid Equipment Theme Index are trading at historically high P/E ratios. However, it should be noted that both indices were launched after 2022, so the available historical data is limited and mainly reflects recent valuation trends.

Although the data is limited, it at least indicates that the current valuation levels are not cheap. Investors who plan to hold long-term should further consider the industry’s future growth potential and the revenue performance of leading listed companies, such as the top-weighted firms, order fulfillment status, and growth expectations over the next few years.

Daily Economic News