In response to the lackluster performance of China’s benchmark blue-chip CSI300 Index, which witnessed an 11% decline in 2023, Chinese money managers are swiftly establishing funds to track the newly-launched CSI A50 Index. Analysts posit that the CSI A50 Index provides a more accurate portrayal of China’s economic landscape and government priorities compared to other stock benchmarks like CSI300 and the Shanghai Composite Index.

With a more balanced industry allocation and reduced emphasis on the financial sector, the CSI A50 Index aligns more closely with Beijing’s objectives of promoting innovation, advanced manufacturing, and green technology. Since its launch on Tuesday, several mutual fund companies, including Fullgoal Fund Management Co and E Fund Management, have already applied to launch funds tracking this new index.

This move is seen as part of the Shanghai Stock Exchange’s initiative to build an index series with distinct Chinese characteristics and enhanced global influence. Cai Jianchun, the head of the Shanghai Stock Exchange, has underscored the pivotal role of indexes in directing money flows and emphasized the need for index investing to be in harmony with the central government’s pursuit of technological independence.