The A500 is a product that has become a phenomenon in the fund industry in 2024, and the issuance battle has continued to this year. Since the first batch of 10 CSI A500 ETFs were filed on September 5, 2024, the first batch of A500 ETF products were listed on October 15, and have since continued to receive net purchases. From October 15 to December 31, the A500-related ETFs were net bought every month, with a cumulative net purchase size of over 200 billion yuan during this period. As of the latest data, the total size of the 25 ETFs with statistics on the exchange has exceeded 260 billion yuan. In just 4 months since its launch, the CSI A500 Index has grown into a new business card for ETFs. In terms of the size of index tracking products, the CSI A500 Index has emerged as the second largest following the trillion-dollar Shanghai and Shenzhen 300 Index. For individual products, the ICBC CSI A500 ETF's size has surpassed hundreds of billions from 20 billion in just 7 trading days, setting a new record: the fastest ETF to surpass hundreds of billions of ETFs with establishment sizes of 20 billion or less in the entire market. As of the latest data, this ETF has a size of nearly 30 billion, and other ETFs from Nanfang, Guangfa, and Huaxia have also surpassed or approached 20 billion, with the hundred billion size gathering the strengths of 8 strong fund companies including Huatai Bairui, Fuguo, Yifangda, Jingshun Changcheng, Zhongshang, Jiashi, Morgan, and Yin Hua. The A500 not only has ETFs, indices, index-enhanced, and dividend low-volatility strategy products reported, but there are currently 123 reported products, with nearly 70 fund companies participating. Against the backdrop of fee reductions, the scale of ETFs has become more important from an income perspective. In order to expand the scale of ETFs, in addition to having excellent indices, under the competition of homogenization, resource investment is required and there must be first-mover advantage. In fact, both of these are concentrated in large companies, as innovative products have the advantage of being first, while also possessing resource capabilities. For medium and small fund companies, it is important to be "rolled in" and a critical step for entering the index, but the difficulty in sales is the real experience for every fund company entering the market in the later stages. The A500's second-half launch puts medium and small fund companies at a disadvantage Since December 2024, the first batch of CSI A500-related funds have not seen sizes exceeding 2 billion. Even large companies like Guangfa, Zhongshang, and Zhongou are having trouble finding funds during the first issuance stage. Medium and small fund companies are facing the same dilemma. A senior executive of a medium and small public fund said to Caixin that since their CSI A500 product was approved, the company was very happy and attached great importance to this product. Firstly, they were able to join the broad base camp of 2024, board the broad base ETF ship, and secondly, the company had not had a broad base ETF in hand before, so obtaining an entry ticket for the A500 also increased the imagination space of the business layout. The subsequent offering caused the company to be worried. In communicating with securities firms and banks about the securities settlement and custody, the company encountered difficulties. "After discussing with several channels, large institutions have already had several products in hand for securities settlement and are unwilling to accept new products." But the issuance was imminent, so the company had to send senior executives to seek help from shareholders and banks they had previously cooperated well with, and after many twists and turns, the securities settlement and custody institutions were finally determined. A fund manager said that during the entire IPO phase, he had been shuttling between different cities for roadshows every day. Depending on the different resources of securities firms, roadshows not only covered first-tier cities but also extended to second and third-tier cities, with the PPTs being memorized. "One day on the road to the roadshow, I suddenly felt confused, not remembering which city I was in." The fund manager said, the high-intensity and more sinking roadshows were just to achieve a good result in the first issuance. For what reason is there still a layout after all this effort? Some fund companies said that in addition to positioning the product, many medium and small fund companies have also positioned index-enhanced products or strategy-style products, which can generate excess returns above beta, naturally attracting the favor of some investors. Regarding the current difficulty in selling the A500, fund companies also have expectations, with feedback from several fund companies indicating three main reasons: First, the net asset values of the previously listed A500 products are all below 1, leading to poor customer experience. Some fund companies mentioned that in the early stages, the A500 ETF experienced frenzied sales on the securities and banking sides, with many first issuances reaching scales like 8 billion. But the current listed ETFs have net asset values below 1, which means that clients who bought into the first offering phase were almost all incurring losses, especially since December last year when the market was experiencing downward volatility, investors were still incurring losses. "Earlier, the A500 was attractive and had a large sales volume, but the wide range of losses affected a broad customer base, which is one of the main reasons for not being able to sell in the later phase." A public fund person said that a marketable product is one that has enough profit potential. Looking at the promotional materials of fund companies, there are many educational contents such as "The net value of the A500 index fund has fallen below 1 yuan, is it suitable to add positions now?" "What should I do if my A500 fund is underperforming?" "With the market declining more than rising, can the A500 index continue to hold/accumulate?" The reassuring phrases to a certain extent reflect the anxiety of current clients. Second, the competition for holding on to the A500 has become more intense, draining the energy of securities firms and banks. The subsequent first issuance of the CSI A500 products not only needs to find incremental funds in the market but also faces competition with the products held in the early stages. The fund companies that have already operated the CSI A500 in the early stages are mostly large companies that spare no effort in competing for scale and liquidity. Some companies said, "This is a time when there is no cost to be considered, undoubtedly, the secondary target of the second-tier products is the top-ranked product in scale." Caixin reporters learned that many leading A500 ETF holding companies have adopted a strategy of "big exposure". The so-called "big exposure" strategy includes a comprehensive coverage from offline outdoor advertising, buildings, elevators, public transportation stations to online platforms like Snowball, Wind, and big V, and can even be found in payment apps and popular websites. In addition, some fund companies said that securities firms have also joined in the internal competition and have assisted in promoting. "Some securities firms have specially formed groups to share fund company promotional materials for mutual reference." Third, after the A500, there has been a continuous emergence of new innovative products in the issuance market. After the A500, new indices and products have emerged in succession. In terms of broad-based products, several Shanghai 180 ETFs and Innovation 5 ETFs have been listed, and innovative products such as HypergrowthETF, Fund-of-Funds, short products, ETF-FOF have also been launched.In the ETF sector, industry-themed funds such as AI and the low-altitude economy have been continuously approved. In addition, the Sci-Tech Innovation Index ETF reported on January 13 is a battle of 12 firms, and after approval, issuance is imminent.Some fund companies have expressed that while large fund companies can issue multiple products through multiple channels, for medium and small fund companies, issuing one to two products per month is already the limit. "Channel capacity is also limited, incremental funds are limited, and if we only have existing funds redeemed to buy new ones, it is not the original intention of product issuance." In fact, after the A500 index, the first fundraising for new products has been weak, and even top-tier companies have experienced delays in fundraising. The difficult situation of issuing follow-up products after the A500 index can be imagined. This article is reprinted from "Cailian Press", edited by GMTEight: Liu Jiayin.