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 fell out of the billion-yuan range, while Hu’an Gold ETF bucked the trend and surpassed 100 billion yuan, becoming the first commodity ETF to reach that scale. Is this “ice and fire” situation driven by capital leaving the market or reallocating?

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

Looking back at the rapid growth of the ETF market in 2025, at the start of the year, there were 1,047 funds totaling 3.73 trillion yuan. By April, the market surpassed 4 trillion yuan for the first time; by August, it exceeded 5 trillion yuan; and by December, it broke 6 trillion yuan. By year’s end, 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 scale 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 market size was 5.30 trillion yuan across 1,446 funds, down 0.97 trillion yuan from the peak, a decrease of 15.49%.

Currently, the market sizes of stock 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 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, but five have fallen below 100 billion yuan: 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” Hu’an Gold ETF had a size 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.

Top fund companies’ ETF management scales have also shrunk significantly. According to iFinD, since the start of the year, 38 fund companies saw declines in ETF management scale. Five firms—Huaxia Fund, E Fund, Huatai-PineBridge Fund, Southern Fund, and Harvest Fund—each experienced reductions exceeding 100 billion yuan. GF Fund and Fullgoal Fund saw decreases in the hundreds of millions range, while the remaining 31 firms’ scales shrank by less than 100 billion yuan.

As the first domestic ETF manager with over 10 trillion yuan in assets, Huaxia Fund’s ETF scale peaked at 10.2 trillion yuan on January 12. It has since declined to 7.291 trillion yuan, a reduction of about 2.875 trillion yuan from the peak.

Capital shifts to industry themes seeking safe havens

As broad-based ETFs retreat, industry-themed ETFs are rising. According to iFinD, six institutions—including Guotai Fund—added over 100 billion yuan in ETF management scale 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 grew 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 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 mainly reflects 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 indicates a style shift, with capital temporarily withdrawing from macro-correlated broad indices to seek more flexible structural opportunities—pursuing certainty rather than rejecting broad-based ETFs.

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

Will the trend of abandoning broad-based ETFs and chasing themes continue? Tian analyzes that the inflows into gold, oil, and non-ferrous metals ETFs reflect ongoing geopolitical conflicts and disruptions to global supply chains. Capital is seeking hard assets to hedge geopolitical risks and inflation expectations, actively embracing safety in specific macro environments.

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 outflows, making it risky to buy in at this point. 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 that ordinary investors stick to a “core-satellite” strategy: using broad-based ETFs as the ballast for their portfolios to earn basic market returns, and employing narrow-focused ETFs to capture structural opportunities. Combining valuation metrics, they should gradually deploy when sector valuations are at historic lows and maintain a dollar-cost averaging approach to smooth out costs.