In the current investment context, investors' differentiation of indices is relatively broad and vague. For example, indices like the CSI 300 and CSI A500 are generally regarded as broad-based indices. However, with the emergence of concepts such as broad-based, narrow broad-based, and innovative broad-based indices, investors find it difficult to discern the true characteristics of broad-based indices. Therefore, this classification of stock index ETFs first clarifies the description of broad-based indices and the basis for such descriptions.
According to the "Index Fund Development Guidelines" issued by the Shanghai and Shenzhen Stock Exchanges, a broad-based index refers to an index whose sample selection is not limited to specific industries or investment themes and reflects the performance of stocks in a certain market or of a certain size. Domestic and international index providers generally categorize broad-based indices as size-based indices. Based on the definition of regulatory authorities and the size-based index framework of index companies, the characteristics of broad-based indices are described along two dimensions—market and market capitalization—to more objectively present the actual features of various broad-based indices. This helps investors intuitively understand the differences between different broad-based indices and select and match index products according to their actual investment needs.
Specifically, broad-based indices are first divided into two categories by market dimension: China and international. For China, they are further subdivided by market dimension based on the listing location of the index constituents, including A-shares, Shanghai market, Shenzhen market, STAR Market and ChiNext, Hong Kong stocks, and Shanghai-Hong Kong-Shenzhen, to distinguish between different exchanges and market segments. From a market capitalization perspective, they can be categorized into large-cap, mid-cap, small-cap, and all-market. For international markets, indices are classified only by global, regional, and single-country categories, without distinguishing by market capitalization.
Under this classification, the characteristics of broad-based indices become clear. For example, the CSI A500 Index selects 500 large-cap, highly liquid stocks from the entire A-share market and, like the CSI 300, belongs to the A-share large-cap index category. The SSE 50 and SZSE 100 are classified as Shanghai large-cap and Shenzhen large-cap indices, respectively, while the CSI 500 and CSI 1000 belong to the A-share mid-cap and small-cap indices, respectively. The CSI All Share Index and the STAR Market Composite Index are categorized as A-share all-market and STAR Market all-market indices, respectively. Similarly, the Hang Seng Index and Hang Seng China Enterprises Index are classified as Hong Kong large-cap indices, while the Shanghai-Hong Kong-Shenzhen 300 Index is a Shanghai-Hong Kong-Shenzhen large-cap index.
