Following the launch of the ChiNext 100 ETF, the SSE STAR 50 ETF, and the SSE STAR Market 100 ETF, Huaxia Fund has announced a fee reduction for another ETF and its associated fund, with both the management fee rate and the custody fee rate being reduced to the lowest levels in the industry currently.

Gold ETF Huaxia and its associated fund announce a fee reduction

On October 16, Huaxia Fund issued a public notice stating that, in order to better meet the investment and financial management needs of a wide range of investors and to reduce the financial management costs for investors, after consultation and agreement with the fund custodian, China Construction Bank, Huaxia Fund has decided to lower the management fee rate and the custody fee rate for the Gold ETF Huaxia and its associated fund starting from October 17, 2024, and to revise the relevant content of the fund contract accordingly.

According to the announcement, the management fee rate for the Gold ETF Huaxia and its associated fund has been reduced from 0.5% to 0.15%, and the custody fee rate has been reduced from 0.1% to 0.05%, with reduction percentages of 70% and 50%, respectively.

Wind data shows that, as of now, there are a total of 14 gold ETF products on the market, with over 90% of the products having a management fee rate of 0.5% and a custody fee rate of 0.1%; after the adjustment by Gold ETF Huaxia, both the management fee rate and the custody fee rate have been reduced to the lowest level among similar products.

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Gold ETF Huaxia was established in April 2020 with a fundraising scale of 334 million yuan, and as of October 15 of this year, the circulation scale has reached 451 million yuan, representing a 35% increase in scale; the fund has achieved a return of over 25% within the year.

Multiple ETFs have recently密集ly reduced fees

Recently, under the stimulus of a package of financial policies, market sentiment has clearly warmed up, and a large amount of capital has entered the market through ETFs. Not only was the first ETF with a scale over 400 billion yuan born, but the net inflow of funds into stock ETFs (including cross-border ETFs) in the past week has approached 150 billion yuan.

In order to enhance the attractiveness of the products, recently, several fund companies have taken密集 action to reduce fees for their ETFs.

In terms of Huaxia Fund, in addition to the aforementioned Gold ETF Huaxia and its associated fund, on October 9, the ChiNext 100 ETF Huaxia and its associated fund reduced fees; Huaxia SSE STAR 50 ETF and its associated fund, as well as Huaxia SSE STAR Market 100 ETF and its associated fund, all reduced fees starting from October 16. After the adjustment, the management fee rate and the custody fee rate for the aforementioned products have been reduced to 0.15% and 0.05%, respectively.Since October 14th, Bosera Fund has reduced fees for its Bosera ChiNext ETF and its associated funds. After the adjustment, the product's management fee rate and custody fee rate have been lowered to 0.15% and 0.05%, respectively. Additionally, the annual sales service fee rate for the Class C shares of the Bosera ChiNext ETF's associated fund has been reduced from 0.4% to 0.1%.

On October 8th, Penghua Fund adjusted the fees for its Penghua CSI 300 ETF and its associated funds. The management fee rate was reduced from 0.5% to 0.15%, and the custody fee rate was lowered from 0.1% to 0.05%. Guotai Fund also reduced the fees for its Guotai CSI 300 Enhanced Strategy ETF starting from October 8th, with the management fee rate being cut from 1% to 0.5%.

A public fund professional in Beijing stated that, on one hand, the reduction in ETF fees lowers the investment costs for investors and enhances the attractiveness of the products. On the other hand, by attracting more capital into the market, it is beneficial for improving market liquidity, guiding the formation of a long-term investment philosophy, and promoting the stable development of the market. It is expected that more ETFs may join the fee reduction trend in the future.

"Furthermore, fee reduction will also intensify industry competition to a certain extent. To attract more investors, in addition to competing on fees, fund companies also need to continuously improve their investment management capabilities, risk control capabilities, and service capabilities," the public fund professional believes. Therefore, fee reduction is also conducive to promoting companies to optimize resource allocation, enhance comprehensive management levels, and thereby drive the high-quality development of the industry.