Another area where index classification can be confusing is the distinction between sector indices and thematic indices. Some investors consider the new energy index a sector index, while others argue it is a thematic index. The reason for this disagreement is that the boundary between sector and thematic indices is not entirely clear, especially since there are multiple sector classification systems—such as the CSI Industry Classification, Shenwan Industry Classification, and Global Industry Classification Standard (GICS). Investors may not know which system to follow, making it difficult to search for and compare indices.

To address this, our classification of stock index ETFs first clarifies what constitutes a sector index versus a thematic index. Simply put, a sector index is based on industry classification and reflects the performance of stocks within a specific sector. A thematic index, on the other hand, focuses on a long-term trend, theme, or concept and typically spans multiple industries.

In practice, we reviewed domestic and international sector classification systems and consolidated them according to the most widely used standards in the domestic market, forming eight major sector categories. Additionally, considering China’s investment characteristics, we identified six major thematic categories. These eight sectors and six themes essentially cover all sector and thematic index products issued domestically, allowing investors to easily search and compare various indices.

On one hand, we integrated classification systems from domestic and international index providers to establish eight sectors: financials, healthcare, technology, consumer goods, manufacturing, cyclical industries, utilities, and real estate. We then analyzed whether an index qualifies as a sector index based on factors such as name alignment and sector weightings.

For example, indices related to banking, securities, and insurance all fall under the financial sector. Semiconductors, software, and telecommunications are classified under technology, while defense, solar energy, and energy storage batteries belong to the manufacturing sector.

On the other hand, based on China’s industrial strengths and sector trends, we categorized six major themes: digitalization & AI, advanced manufacturing, low-carbon transition, SOE reform, demographic trends, and ESG. We will continue refining this classification to keep pace with market developments and thematic evolution. Under this framework, the new energy index clearly belongs to the low-carbon transition theme. Similarly, well-known themes like AI and robotics are also classified as thematic indices.