The recent market plunge indeed scared many people.

Today, the entire market experienced a sharp decline, triggered by an analytical article about the A500ETF. Coupled with the recent market rebound for eight consecutive trading days, profit-taking has accumulated significantly, making this wave of decline particularly fierce.

The logic of that article is roughly as follows: various fund companies have been competing for quotas in the CSI A500 ETF options recently. To secure these quotas, they are aggressively increasing the size of their A500ETFs. But the problem is, these funds face the risk of outflows after New Year's Day. It does sound a bit frightening.

From a data perspective, A500-related ETFs have been expanding rapidly lately. From December 1 to 25, the total net inflow of funds into the CSI A500 ETF in the entire market reached 94.757 billion yuan. This growth rate is exceptionally fast.

But is it really just a battle for options? Not necessarily. The trading volume of domestic options is currently too small, so fund companies wouldn't be so aggressive. A more reasonable explanation is that the rapid growth of the A500ETF is mainly directly related to the return of the tech growth style. Why? Because the A500 index has the most balanced "tech content."

Comparing it with other broad-based indices makes this clear. The SSE 50 and CSI 300 mainly cover large-cap traditional industries; the Sci-Tech Innovation 50 claims the highest "tech content," but the problem is that it is "too偏科" (overly偏科, meaning heavily偏科), basically dominated by the chip and semiconductor industries; the ChiNext 50 is dominated by new energy and computing hardware (such as the CPO and PCB concepts that surged this year); recent hot sectors like commercial aerospace are barely covered by these two indices. The CSI 1000 mainly includes mid-cap stocks, selected by market cap ranking, and cannot cover many leading tech companies.

At this point, it’s worth mentioning the difference between the CSI 500 and the newly created CSI A500 last year.

They differ by just an "A," but their construction philosophies, constituent stock selection, and market positioning are fundamentally different.

The CSI 500 is purely market cap ranking-oriented. Its logic is: first exclude the CSI 300 components and the top 300 stocks by total market value, then select 500 stocks ranked from 301 to 800. It is entirely based on market cap size.

The CSI A500, on the other hand, is modeled after the US S&P 500—using a multi-dimensional screening mechanism that balances industry representation with leading companies. It selects large-cap, highly liquid representative leaders from each industry, focusing on the top performers. This approach allows it to include many emerging industry leaders with high growth potential.

Currently, the major broad-based index ETFs include the CSI 300, SSE 50, CSI 500, CSI 1000, ChiNext and ChiNext 50, Sci-Tech Innovation 50, CSI A500, etc. Comparing these, considering the current dispersion in the tech sector (various concepts), rapid sector rotation, and capital preference for segmented leaders, the CSI A500 has become the broad-based index most closely aligned with the tech sector's trend.

From another perspective, the authorities are actively guiding funds into the market through ETFs, especially broad-based ETFs. From this angle, the recent surge in the scale of A500-related ETFs is mainly due to the return of the tech style, also indicating that more and more medium- and long-term funds are optimistic about the tech style and are investing real money.

Therefore, overall, the tech rally is still worth looking forward to.

Another recent piece of news: the National Venture Capital Guidance Fund has officially started operation.

This fund's scale is at least several hundred billion yuan. This is true "real money" support—not only policy support but also direct investment of real funds. The National Venture Capital Guidance Fund adopts a triple-structure involving guiding fund companies, regional funds, and sub-funds. Among them, three regional funds correspond to the Beijing-Tianjin-Hebei, Yangtze River Delta, and Guangdong-Hong Kong-Macao Greater Bay Area regions.

Coincidentally, these three regions are exactly the key areas emphasized in the Central Economic Work Conference. So, moving forward, the country will strongly support technological development, with these three regions taking the lead. From this policy orientation, support for the tech sector will not weaken.