On October 16, the innovative drug sector under the Southbound Connect experienced a rapid upswing. The highly elastic Southbound Connect Innovative Drug ETF (520880) saw its on-market price surge over 3.6%, with turnover quickly exceeding 260 million yuan. Notably, yesterday, the Southbound Connect Innovative Drug ETF (520880) rebounded sharply with a 2.12% gain, and capital inflows continued to heat up. As of the previous day, it had attracted a total of 130 million yuan over four consecutive days.

Huachuang Securities pointed out that the Southbound Connect innovative drug industry is transitioning from a quantity-driven logic to a quality-driven logic, and 2025 will usher in a product-centric phase. Differentiated pipelines and international layouts of domestic innovative pharmaceutical companies have become key. With industry valuations at low levels, coupled with improvements in the macro environment and the pull effect of major products, the growth prospects are optimistic.

The Southbound Connect Innovative Drug ETF (520880) passively tracks the Hang Seng Stock Connect Hong Kong Innovative Drug Select Index. This index currently contains no CXO companies and is 100% allocated to innovative drug R&D companies, making it a pure innovative drug index that accurately represents the core strength of innovative drugs. Since the beginning of this year, the Hang Seng Stock Connect Hong Kong Innovative Drug Select Index has shown higher elasticity and stronger offensive power compared to similar indices. As of the end of September, it had accumulated a gain of 108.14% year-to-date, leading the rise among various innovative drug indices.

As the first ETF in the entire market to track the aforementioned Hang Seng Stock Connect Hong Kong Innovative Drug Select Index, as of the end of September, the fund size was 1.806 billion yuan, with an average daily turnover of 493 million yuan since its listing. It boasts the largest scale and best liquidity among ETFs tracking the same index, supports intraday T+0 trading, and is not subject to QDII quota restrictions. Off-market investors can pay attention to its feeder fund: 025221.