Is the "Trillion Dollar Club" shrinking and then expanding again? Is the ETF market switching styles?

Since the beginning of this year, China’s ETF market size peaked at 6.28 trillion yuan in January. Within less than two months, it shrank by nearly one trillion yuan, falling to 5.30 trillion yuan. Meanwhile, market trends have become polarized: five “billion-yuan club” broad-based ETFs shrank and dropped out of the billion-yuan club, while Hu’an Gold ETF defied the trend and surpassed 100 billion yuan, becoming the first commodity ETF to reach that scale. Is this “ice and fire” situation caused by capital leaving or repositioning?

Five broad-based ETFs dropped out of the “billion-yuan club”

Looking back at the rapid growth of the ETF market in 2025, at the start of the year, the total assets of 1,047 funds reached 3.73 trillion yuan. By April, it first exceeded 4 trillion yuan; in August, it surpassed 5 trillion yuan; and in December, it broke 6 trillion yuan. By the end of the year, 1,402 funds totaled 6.02 trillion yuan. The ETF market crossed three trillion-yuan thresholds within the year, with the number of funds and total assets increasing by 33.91% and 61.39%, respectively.

Entering 2026, the ETF market size continued to rise in early January, reaching a peak of 6.28 trillion yuan on January 12 with 1,405 funds. Afterwards, the market size declined steadily. According to iFinD data, as of March 8, the total assets of 1,446 funds were 5.30 trillion yuan, down 0.97 trillion yuan from the peak earlier in the year—a decline of 15.49%.

Currently, the market sizes of equity ETFs, bond ETFs, and cross-border ETFs are 3.09 trillion yuan, 740 billion yuan, and 950 billion yuan, respectively, each shrinking from their January peak by varying degrees—down 990 billion yuan, 200 billion yuan, and 60 billion yuan. Conversely, commodity ETFs and money market ETFs grew by 90 billion yuan and 20 billion yuan.

Amid the significant shrinkage in market size, the number of funds in the “billion-yuan club” has also decreased sharply. At the start of the year, all seven “billion-yuan club” funds were broad-based ETFs. Now, five of these have fallen below 100 billion yuan, including Huaxia CSI 300 ETF (93.39 billion yuan), Harvest CSI 300 ETF (96.99 billion yuan), Huaxia SSE 50 ETF (73.01 billion yuan), Southern CSI 500 ETF (79.31 billion yuan), and E Fund ChiNext ETF (55.76 billion yuan).

Currently, only three ETFs exceed 100 billion yuan: Huatai-PineBridge CSI 300 ETF (208.33 billion yuan), E Fund CSI 300 ETF (143.63 billion yuan), and Hu’an Gold ETF (127.27 billion yuan). Among them, Huatai-PineBridge CSI 300 ETF and E Fund CSI 300 ETF have seen outflows of 231.11 billion yuan and 167.25 billion yuan from their peaks this year.

The newly “billion-yuan club” member, Hu’an Gold ETF, had a scale of 93.985 billion yuan at the end of last year. It first surpassed 100 billion yuan on January 14, reaching 100.76 billion yuan, and hit this year’s peak of 135.475 billion yuan on January 29. Due to fluctuations in international gold prices, its size once shrank sharply to 111.07 billion yuan but is now steadily recovering.

The ETF management scale of leading fund companies has also shrunk significantly. According to iFinD, since the beginning of the year, 38 fund companies saw declines in ETF assets under management. Among them, Huaxia Fund, E Fund, Huatai-PineBridge Fund, Southern Fund, and Harvest Fund each experienced reductions exceeding 100 billion yuan. GF Fund and Woori Fund saw declines in the hundreds of millions, while the remaining 31 firms’ reductions were less than 100 billion yuan.

As the first domestic ETF manager with assets exceeding 10 trillion yuan, Huaxia Fund’s ETF assets peaked at 10.2 trillion yuan on January 12. Since then, it has declined to just 7.291 trillion yuan, a reduction of about 2.875 trillion yuan from the peak.

Capital “repositioning” to industry themes as a safe haven

As broad-based ETFs retreat, industry-themed ETFs are on the rise. According to iFinD, six institutions, including Guotai Fund, have increased ETF assets by over 10 billion yuan this year. Among them, Guotai Fund, Hu’an Fund, and Bosera Fund benefited from inflows into gold-themed ETFs, which attracted 33.288 billion yuan, 17.466 billion yuan, and 13.84 billion yuan, respectively.

Notably, beyond gold ETFs, the market has seen strong inflows into sectors like commercial aerospace, semiconductors, oil and petrochemicals, and non-ferrous metals. For example, ETFs linked to the CSI Chemical Industry Sub-Index, CSI Power Grid Equipment Index, and CSI Semiconductor Materials & Equipment Index have grown by 36.931 billion yuan, 27.599 billion yuan, and 19.609 billion yuan this year.

“Rapidly falling below 100 billion yuan for top broad-based products is a typical strategic capital shift, not a fundamental change in the market structure,” said Tian Lihui, Dean of the Financial Development Research Institute at Nankai University. He believes that although the ETF market has experienced significant fluctuations, this is mainly a market sentiment release. Under the background of previous gains and geopolitical conflicts, capital is choosing to lock in profits.

Tian emphasizes that, overall, leading fund companies still hold over 70% of the ETF market share, and the “concentration effect” remains intact. The current phenomenon reflects a style shift at a crossroads: capital is temporarily withdrawing from broad indices closely linked to macroeconomics to seek more flexible structural opportunities. This is a pursuit of certainty, not a rejection of broad-based ETFs.

“Changes in ETF sizes reflect market dynamics. Currently, the main issues globally are rising oil prices due to Middle East tensions and stock declines caused by stagflation fears from runaway inflation. In China, this manifests as a market decline with energy and commodities rising, which explains the overall shrinkage of ETF sizes and the inflow into energy and commodity ETFs,” said economist Pan Helin.

Will the trend of abandoning broad-based ETFs for thematic ones continue? Tian Lihui notes that the surge in gold, oil, and non-ferrous metal ETFs reflects ongoing geopolitical conflicts and disruptions to global supply chains. Capital inflows into resource assets are a way to hedge geopolitical risks and inflation expectations—a proactive embrace of safety amid macro uncertainties.

He warns that ordinary investors should avoid chasing gains and selling in panic. For example, after recent sharp rises, some oil and gas funds have seen capital exit, making it risky to buy in at the top. Data from iFinD shows that from March 4 to March 6, the CSI Oil & Gas Industry Index, CSI Oil & Gas Resources Index, and China Securities Petroleum & Natural Gas Index declined for three consecutive trading days, with several high-premium oil and gas ETFs also falling.

“Market excitement belongs to others; risks are your own. Longevity in the market is more important than quick gains,” Tian advises. He recommends a “core-satellite” strategy: using broad-based ETFs as the ballast for the portfolio to earn basic market returns, and narrow-based ETFs to capture structural opportunities. Combining valuation metrics and deploying in sectors at low valuation levels can help smooth costs through regular investment.