On October 25, a remarkable event unfolded in the world of finance as a total of 20 index funds linked to the CSI A500 made their debut in the marketBy the time the clock struck 3:00 PM, these newly launched funds had successfully raised an impressive sum exceeding 20 billion yuan on their very first dayAmong these, the Taikang CSI A500 ETF Connect, primarily sold through China Merchants Bank, made headlines by amassing over 5 billion yuan in sales aloneOther prominent players in the field included the GF CSI A500 Index Fund, which quickly garnered 3 billion yuan, while several heavyweight institutions such as Invesco Great Wall, Harvest, and Southern Asset Management also achieved impressive initial collections of over 1 billion yuan each.

The enthusiasm surrounding the CSI A500 extended beyond the confines of the stock exchange, with an overwhelming demand observed in the off-market arena as well

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This exuberant response from investors indicated a strong belief in the fund's potential, leading to a combined fundraising total exceeding 20 billion yuan for the initial batch of off-market index funds as of 3:00 PM on the same dayThe pattern was consistent, as the Taikang CSI A500 ETF Connect retained its leading position with sales surpassing the staggering 5 billion yuan mark, while other significant funds continued to attract considerable investment.

The role of banking institutions in facilitating these funds has been pivotalThe prominence of China Merchants Bank and Industrial and Commercial Bank of China was evident as they took on a significant share of the distribution responsibilities for various fundsCustodial services for several notable funds, including the Taikang CSI A500 ETF Connect and products managed by Harvest and Hua Xia, were solely handled by China Merchants Bank

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Simultaneously, Industrial and Commercial Bank of China administered the custodial tasks for funds related to Invesco Great Wall, Southern, and the CSI A500 ETF Connect managed by China MerchantsAdditionally, the custodial service for the Harvest CSI A500 ETF Connect was entrusted to Industrial Bank.

On this day, a total of 20 off-market CSI A500 index funds launched their fundraising effortsThe list included major players such as Fuguo Fund, Guotai Fund, Huatai-PB Fund, Harvest Fund, Invesco Great Wall Fund, and othersThis diverse range reflects the increasing interest and competition in China’s burgeoning financial markets.

Interestingly, as of October 24, the total scale of the first batch of CSI A500 ETFs had already exceeded 40 billion yuan since their inception, indicating a significant doubling in size in a remarkably short time frame

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This highlights the rapid acceptance and growth of these investment products among savvy investors.

There are expectations that due to the overwhelming response, some funds could conclude their fundraising earlier than anticipatedInvestigating the specific fundraising goals reveals that multiple CSI A500 ETF Connects set an upper limit of approximately 8 billion yuan, with Fuguo Fund, Taikang Fund, and China Merchants Fund among the noteworthy names adhering to this benchmarkMoreover, several others like Harvest, GF, and Hua Xia have also established a cap of around 5 billion yuan for their respective funds.

The fundraising duration adds another layer of complexity, with Morgan, Fuguo, GF, Tianhong, and China Europe all gearing towards wrapping up their offerings by November 7. In contrast, the fundraising conclusion for products related to Guotai, Yinhua, Harvest, Huatai, and others is slated for November 8, while Southern, China Merchants, Invesco Great Wall, and Hua Shang aim to complete their fundraising processes by November 14.

In terms of financial implications, the management fees for the CSI A500 ETF Connect and the associated index funds are quite competitive, standing at a mere 0.15% annually, underlining the cost-effective nature of these investment vehicles in the current market landscape.

As the day progressed, media sources hinted at the likelihood of additional products announcing an early cessation of fundraising following the enthusiastic participation observed on the opening day

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This buzz hints at a thriving market that incorporates active strategies for attracting long-term capital.

Taking a closer look at the design of the products, the CSI A500 off-market index funds adopted the prior dividend distribution strategies established by the CSI A500 ETFs, with many opting for monthly or quarterly dividend distributionsFor instance, funds managed by Taikang, Harvest, Fuguo, Morgan Asset Management, Yinhua, and China Merchants have instituted a quarterly dividend mechanism that evaluates the relative performance exceeding the benchmark and allocates available profits accordingly.

Conversely, funds from Guotai, Huatai-PB, Invesco Great Wall, Southern, and GF have chosen to implement a monthly dividend policy, appealing to different investor preferences.

In an encouraging sign of confidence in the market, several fund companies are taking proactive steps by purchasing their own offerings