On October 19th, Huaxia Quality Selection Active Management Exchange-Traded Open-End Stock Securities Investment Fund was officially approved, marking the official arrival of the "Active Era" in the domestic ETF market.
In the midsummer of 2026, the A-share market is undergoing a profound transformation in capital structure. Long-term funds such as social security and insurance capital have continued to enter the market since 2023, with companies rated as "China-specific high-quality" (zhong te gu), those offering high dividends, and those providing substantial shareholder returns becoming the new pricing benchmarks. At the same time, an increasing number of investors are no longer satisfied with simply replicating the returns of indices; instead, they seek the active management capabilities of fund managers within transparent and efficient trading platforms. As the allocation needs of long-term funds intersect with the demands for transparency among market tools, a brand-new product format—active management—has quietly emerged at the forefront of the capital market.
Among the first batch of 18 products submitted, "Huaxia Quality Selection Active Management Exchange-Traded Open-End Stock Securities Investment Fund" submitted by Huaxia Fund was officially approved on October 19th. Wind data shows that as a leader in the domestic ETF field by the end of 2025, the average annual scale of Huaxia Fund's equity ETF has ranked first in the industry for 21 consecutive years. The launch of the company's first active ETF is regarded as a key step in its strategic upgrade from "passive tracking" to "active management + ETF tools".
Note: "For 21 consecutive years" refers to the period from 2005 to 2025, using "annual average daily scale," which is the arithmetic mean of the scale data for each trading day since the product was launched.
Actively introducing this new product, ETF, essentially combines proactive "genetic" management with the "coat" of ETF. Unlike traditional passive indices ETF, it is no longer constrained by the constituent stocks of the index. Fund managers can independently select stocks and dynamically adjust their holdings based on macroeconomic analysis and individual stock research, with the core goal of achieving returns that surpass the performance benchmark Alpha. Different from traditional over-the-counter active funds, it is listed and traded on stock exchanges, allowing investors to buy and sell in real-time during trading hours and enjoy all the trading conveniences provided by ETF.
What is particularly crucial is that active ETF can fully disclose all its holdings before the opening of each trading day through the subscription and redemption list (PCF), putting an end to the lag in information disclosure of traditional active funds, which only reveals the top ten holdings every quarter. This transformation turns the "investment blind box" into a "transparent aquarium." In accordance with the requirements of the supporting business guidelines, an active ETF investment portfolio must hold no fewer than 30 securities, and the combined weight of the top ten holdings shall not exceed 60% of the net asset value of the fund, ensuring diversification of holdings and stability of investment style at the institutional level.
The future operation of new funds also relies on the professional and platform-based support of Huaxia Fund. The company claims to have a profound foundation in both active investment research and index investing, having been among the first in the industry to propose the investment philosophy of "research creates value." Its "Active Investment Research System 5.0" represents an evolution from a team-based approach to a platform-based one, with over 300 investment researchers involved, and the average tenure of investment managers and fund managers is 12 years. In the field of index investing, Huaxia Fund launched China's first ETF — Huaxia SSE 50 ETF in 2004. As of June 2026, the company has 128 ETF products under its umbrella, and the total scale of its non-commodity ETF products ranks first in the industry. The article states that the profound foundation in active investment research, combined with the mature and stable nature of its ETF business, provides platform-level support for the stock selection capabilities of this active ETF.
From a global perspective, active ETF has become one of the fastest-growing investment categories in the international asset management market. Bloomberg data shows that as of June 30, 2026, the total scale of global active ETF reached 2.5 trillion US dollars; since 2016, its compound annual growth rate has been 49%, far exceeding the overall ETF market growth rate of 22%. The article states that the development path of overseas markets indicates that active ETF can effectively meet the active investment needs of medium- and long-term funds such as insurance and pension funds, as well as individual investors in the market, and is a "key factor" in the future evolution of the public fund industry landscape.
The approval and subsequent issuance of this Huaxia Quality Selection Active Management Transaction-oriented Open-ended Stock Securities Investment Fund will not only provide domestic investors with a new tool that combines value-oriented investment style with the convenience of ETF trading, but it will also become an important sample for observing the development of China's active ETF market.
Investment involves risks. When purchasing funds, investors should carefully read the fund's 'Prospectus' and other sales documents.
This fund invests in the securities market, and the net value of the fund may fluctuate due to factors such as market volatility. Investors enjoy the returns of the fund based on the number of shares they hold, while also bearing the corresponding investment risks. The risks associated with this fund include: systemic risks arising from overall political, economic, social, and other environmental factors that affect securities market prices; non-systemic risks specific to individual securities; liquidity risks; investment risks related to derivatives; investment risks associated with convertible and exchangeable bonds; investment risks in asset-backed securities; risks involved in securities lending business through repurchase agreements; investment risks in depositary receipts; management and operational risks; technical risks; as well as specific risks inherent to this fund itself.
As a ETF, the specific risks of this fund also include: the risk of deviation between the return of the underlying index and the average return of the stock market, the risk of volatility of the underlying index, the risk of deviation between the return of the fund's investment portfolio and the return of the underlying index, the risk of the index compilation institution ceasing services, the risk of changes to the underlying index, the risk of constituent stocks being suspended from trading or delisted, the risk of deviation between the trading price of fund shares in the secondary market and the net asset value of fund shares, the risk of errors in subscription and redemption lists, the risk of errors in decision-making based on IOPV and calculation errors related to IOPV, arbitrage risk, delisting risk, the risk of investors failing to subscribe successfully, the risk of investors failing to redeem successfully, the risk of realizing the redemption consideration for fund shares, the risk of agency trading for subscriptions and redemptions, the risk associated with the handling rules for non-Shanghai Stock Exchange constituent securities, the risk of the net asset value of fund shares falling below par after profit distribution, the risk of services provided by third-party institutions, and the risk of this fund adopting the trading and settlement model of securities companies for on-exchange investments, among others.
This fund is an index fund that adopts a full replication strategy or a sampling replication strategy to track the CSI A-share Index. Its risk-return characteristics are similar to those of the securities market portfolio represented by the underlying index. However, changes in the replication investment strategy may affect the fund's ability to track the underlying index.
The assets of this fund may be invested in stocks on the Science and Technology Innovation Board (STAR Market). If the fund invests in STAR Market stocks, it will face unique risks arising from differences in investment targets, market systems, and trading rules under the STAR Market mechanism, including but not limited to the risk of significant price fluctuations in stocks of listed companies on the STAR Market, liquidity risks, and delisting risks.
The assets of this fund may be invested in stocks listed on the Beijing Stock Exchange. If the fund invests in such stocks, it will face unique risks arising from differences in investment targets, market systems, and trading rules, including but not limited to liquidity risk, transfer board risk, concentration of investment risk, operational risk, delisting risk, and stock price volatility risk.
This fund may invest in depositary receipts, and the net asset value of the fund may be affected by fluctuations in the prices of the underlying securities overseas. The related risks of these overseas underlying securities may directly or indirectly become risks for this fund.
This fund may invest in financial derivatives such as stock options, stock index futures, and government bond futures, and may face risks including market risk, credit risk, liquidity risk, operational risk, and legal risk, among others. This fund may also invest in asset-backed securities, which may involve risks such as liquidity risk, early redemption risk of securities, reinvestment risk, and SPV default risk, among others. This fund may participate in the securities lending business through repurchase agreements, and the associated risks include but are not limited to liquidity risk, credit risk, and market risk. Additionally, this fund may invest in convertible bonds and exchangeable bonds, which may expose it to risks such as fluctuations in the underlying stock prices, credit risk of the issuer, and liquidity risk.
