A-shares have seen a turnover surpassing 1 trillion yuan for over 43 consecutive trading days, with a total turnover exceeding 41 trillion yuan in November, setting a new monthly historical high.

At the same time, ETFs, which have become a new major source of funds for A-shares, saw a net inflow of 78.641 billion yuan in November, with a net inflow of over 1 trillion yuan for the year.

Over the past year, the ETF market has shown historic-level growth, significantly driving funds into the market during the rebound, attracting trillions in inflows, and serving as a ballast while also gradually changing the funding ecology of A-shares.

In the third quarter of this year, the market value of stocks held by index funds surpassed that of active funds for the first time, signifying the rise of index pricing power, which means that changes in ETF indices will have a significant impact on market styles, industries, and individual stocks.

On the evening of November 29, the China Securities Index Company announced a routine adjustment of major indices, including the giant broad-based CSI 300 index, the new core broad-based CSI A500 that broke 100 billion the fastest in history, along with CSI A50, CSI A100, CSI 500, and CSI 1000 indices, with the periodic adjustment plan set to take effect after the market closes on December 13.

Specifically, the CSI 300 index will replace 16 samples, with chongqing sokon industry group stock, beigene, tongling nonferrous metals group, shanjin international, sieyuan electric, sichuan kelun pharmaceutical, wus printed circuit, suzhou tfc optical communication, eoptolink technology inc., yutong bus co.,ltd., zhejiang juhua, jiangsu expressway, china shipbuilding industry group power, guoyuan securities, beijing roborock technology, and canadian solar inc. added to the index.

(The content of this article is a list of objective data and information and does not constitute any investment advice)

It is worth mentioning that on November 30, Artis announced that it will implement the second round of stock repurchase plan, with a total repurchase amount of not less than 0.5 billion yuan and not exceeding 1 billion yuan. All shares repurchased will be used for cancellation and reduction of the company's registered capital.

The CSI A50 index changes 7 samples, with Luxshare Precision, China Jushi Co., Ltd, Zhejiang China Commodities City Group, China Mobile, Aluminum Corporation of China, Beijing-Shanghai High Speed Railway, and CMOC Group Limited included in the index samples, while Beijing Oriental Yuhong Waterproof Technology, S.F. Holding, Hangzhou Hikvision Digital Technology, Tianqi Lithium Corporation, China United Network Communications, Proya Cosmetics, and Zhejiang Huayou Cobalt have been removed.

The CSI A100 index changes 9 samples, with Jiangsu Eastern Shenghong, Beijing Oriental Yuhong Waterproof Technology, 37 Interactive Entertainment Network Technology Group, Yunnan Energy New Material, China Jushi Co., Ltd, Hundsun Technologies Inc., Wingtech Technology, Three Gorges Energy, and Trina Solar Co., Ltd. being removed.

The CSI A500 index changes 21 samples. Cambrian, Chongqing Sokon Industry Group Stock, Loongson Technology, Junshi Bio, Beigene, and other constituent stocks were included, while Jiangsu Yanghe Brewery Joint-Stock, Cecep Solar Energy, Guangdong Baolihua New Energy Stock, and Montnets Cloud Technology Group were removed.

The csi 500 index is replacing 50 samples, with ingenic semiconductor, asymchem laboratories, loongson technology, and eoptolink technology inc. included in the index.

(partial list)

The csi 1000 index is replacing 100 samples, with shanghai belling corp.,ltd, shengke communication, shenzhen airport, and others included in the index.

(partial list)

On the same day, the Shanghai Stock Exchange also issued a notice on the periodic adjustment results of the sse 50, sse 180, sse 380 and other indexes, with adjustments effective after the market closes on December 13, 2024.

The sse 50 index replaced 5 samples, with chongqing sokon industry group stock, crrc corporation, beijing-shanghai high speed railway, cmoc group limited, and cambricon joining, while tbea co., ltd., saic motor, zhangzhou pientzehuang pharmaceutical, power construction corporation of china,ltd, and gigadevice semiconductor inc. were removed.

The sse 180 index replaced 18 samples, the sse 380 index replaced 38 samples, and there were no changes in the sse science and technology innovation board 50 index.

Overall, chongqing sokon industry group stock was added to the csi 300 index, sse 50, csi 500 index, and sse 180 index, while cambricon was added to the sse 50, csi 100 index, and csi 500 index.

Wind data shows that the scale of funds tracking the csi 300 index, sse 50, csi 1000, csi 500 index, csi 50 index, and csi 100 index reaches a total of 2.1 trillion yuan.

How significant will the adjustment of related constituent stocks have on a trillion-yuan market?

Guosen pointed out that the adjustment of index constituent stocks is a passive operation based on compilation rules, so if the scale of constituent stock adjustments is large, it may bring trading investment opportunities.

Guoyuan found that when a large number of index funds make consistent rebalancing actions, it may cause short-term price shocks on illiquid stocks. If positions in these stocks are built in advance and sold when the index funds collectively include new component stocks, there is a high probability of obtaining absolute returns.

The gtja team discovered two actionable investment opportunities from the historical trends of related stocks: first, from the end of the review period to the day of formal adjustment of the component stocks, the added stocks exhibit momentum returns; second, about 30 trading days after the formal adjustment, the previously removed stocks experience a rebound from overselling.

Additionally, the aforementioned index adjustments will officially take effect after the market closes on December 13th. Based on historical experience of index adjustments, fund managers usually choose to rebalance at the end of the last trading day to minimize tracking error with the index, which often leads to "abnormal" surges in trading of stocks with large weight changes.