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On August 27, China Securities Index Co., Ltd. announced that to further enrich market representation tools and investment targets, the CSI A500 Index will be officially released on September 23. It is reported that the CSI A500 Index takes December 31, 2004, as the base date, with a base point of 1,000 points.

Reporters from the Securities Times learned that the CSI A500 Index prioritizes selecting leading companies in the third-level industry, including more leading companies in emerging industries such as information technology and biomedicine, which helps to guide capital into areas related to new quality productive forces.

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The total market value of the index samples is approximately 40 trillion yuan.

According to the announcement by China Securities Index Co., Ltd., the CSI A500 Index selects 500 securities with larger market value and better liquidity from various industries as the index samples, reflecting the overall performance of the most representative listed company securities in each industry.

In recent years, the high-quality development of China's economy has continued to deepen, with the acceleration of the transformation of old and new drivers and further optimization of industrial structure, promoting the continuous increase of the proportion of new quality productive forces in the capital market. To reflect the overall performance of representative companies in various industries from multiple dimensions and to provide the market with diversified performance benchmarks and investment targets, China Securities Index Company has researched and launched the CSI A500 Index.

The samples of the CSI A500 Index take into account both market value representation and industry balance. Specifically, focusing on industry balance ensures that the industry distribution of the index samples is basically consistent with the sample space, reducing the impact of scale factors on industry distribution. This effectively enhances the balance of industry distribution under the market value scale indicator selection, providing investors with a more diversified market benchmark, while also reflecting the structural changes in the capital market and the transformation and upgrading of industries.

At the same time, the compilation of the CSI A500 Index combines ESG and interconnectivity screening conditions, which helps to improve the investability of the samples and facilitates the allocation of A-shares by domestic and foreign long-term funds.

As of July 2024, the total market value of the CSI A500 Index samples is 40 trillion yuan, with a median market value of 32 billion yuan, and the total market value coverage is about 56%. The combined weight of the top 10 samples is approximately 20.3%, which is lower than that of comparable broad-based indices.

It is reported that the CSI A500 Index takes December 31, 2004, as the base date, with a base point of 1,000 points. Since the base date, the index has an annualized return of 7.5%, and the total return index has an annualized return of 9.4%.

The weight of emerging industries accounts for about 46%.It is worth mentioning that the CSI A500 Index prioritizes the selection of leading companies in the third-tier industries, incorporating more leading companies in emerging industries such as information technology and biopharmaceuticals. This helps to guide capital into areas related to new productive forces, plays the role of capital market resource allocation and value discovery, and assists the capital market in serving the real economy.

It is reported that the latest sample of the CSI A500 Index includes leading companies from all 35 second-tier industries and 92 third-tier industries. It is estimated that the weight of emerging industries accounts for about 46%, which is higher than comparable broad-based indices.

In addition, the sample companies of the CSI A500 Index have performed well in terms of financial fundamentals and ESG (Environmental, Social, and Governance). The average return on equity for the index samples in 2023 is 10%, and the average revenue growth rate over the past five years is 12%, both of which are significantly better than the market average. Seventy percent of the samples have seen their return on equity or revenue growth rate rank in the top 30% of their industry in the past year. The median CSI ESG score of the index samples is 0.85, which is significantly higher than the overall market central level.

Continuously Strengthening the Construction of Broad-based Index System

In recent years, CSI Index Company has continuously enriched and improved the broad-based index system, providing investors with a variety of tools and promoting the high-quality development of index-based investment.

Firstly, a multi-level cross-market scale index series represented by the CSI 300, CSI 500, and CSI 1000 has been formed, reflecting the overall performance of listed companies of different market capitalization scales in the A-share market, which is widely used in domestic and foreign markets. Secondly, innovative compilation methods have been introduced, incorporating industry balance and ESG sustainable development concepts, to build a series of characteristic broad-based indices represented by the CSI A50 and CSI A500, which depict the structural changes in the capital market and the transformation and upgrading of industries from multiple dimensions.

As of the end of July 2024, the total tracking scale of broad-based indices managed by the CSI Index Company reached 1.48 trillion yuan, with an annualized growth of 48.2% over the past three years.

Next, the CSI Index Company will continue to strengthen the construction of the broad-based index system in line with market development, providing high-quality index supply for medium to long-term capital entry, and guiding the establishment of long-term investment, value investment, and rational investment concepts.