In recent times, the technological innovation sector has attracted considerable attention, especially with the spotlight on the STAR Market, where the performance of listed stocks has been exceptionalReports indicate that over 80% of individual STAR Market stocks have increased in value within the past month, and multiple thematic funds oriented toward the STAR Market have also seen performance spikes, with 18 funds reporting returns exceeding 10% since the year's beginning.

The resurgence of interest in the technology sector has spurred a competitive rush among investment firmsOn February 17, the first batch of 12 STAR Market composite index ETFs was launched, alongside an additional ETF, quickly selling out on its launch dayFurthermore, a range of new funds focusing on clean energy, semiconductors, artificial intelligence, and other technological avenues have been established, marking the commencement of a discreet 'land grab' for investment tools related to the STAR Market.

According to Wang Guizhong, Chief Director of Big Technology Research at Harvest Fund, the progress achieved in the technology field since 2019 is nothing short of astonishingHe describes this situation as a micro manifestation of a qualitative change driven by cumulative quantitiesWang expresses his optimism about China’s economic future, emphasizing that the substantial foundation of China's manufacturing sector remains intact as the country’s technological capabilities continue to strengthenHe notes that a new wave of technological revolution led by artificial intelligence has only just begun, with significant breakthroughs in domestic computing power, advanced semiconductor processing, and high-level intelligent driving technologies. "In the next decade, I believe Chinese technology will not only rise independently but will also contribute greatly to the world, making the revaluation of Chinese assets an inevitable occurrence," he asserts.

Despite this positive trajectory, there has been a notable outflow of capital

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With the rise of artificial intelligence driven by the likes of DeepSeek and other high-profile innovations, related indices such as the STAR comprehensive index and STAR 50 index have seen significant increases—9.59% and 8.46%, respectively—far surpassing the Shanghai Composite Index’s growth of merely 3.7% during the same period.

In the context of the 585 stocks listed on the STAR Market, nearly 509 have appreciated in value over the past month, reflecting an impressive 87% increase rateAmong these, 23 stocks have registered gains exceeding 50%, predominantly from the computer industry, with companies like Qingyun Technology and Youke De achieving remarkable milestones—gains of 201.77% and 188.47%, respectively.

Amidst this burgeoning performance, many STAR Market themed funds have also flourishedAs of February 14, a comprehensive analysis of 148 existing STAR Market concept funds reveals that 18 have yielded returns over 10% since the year's beginningNotably, actively managed equity funds outperformed in this performance resurgence, with Harvest Technology Innovation leading the way with a notable 22.44% return this yearIn contrast, passive products, like the Huaxia Shanghai STAR Market 200 ETF, trailed closely with a 12.31% annual return.

Further examination shows that some actively managed STAR Market funds increased their stock positions as early as the fourth quarter of the previous yearFor instance, the Wangjia Technology Innovation A Fund raised its stock allocation from 73.64% to 83.5%, reflecting a 9.86 percentage point increase, with a cumulative return of 9.12% this year.

Overall, institutional investment in the STAR Market has also been on the riseAccording to data from Industrial Securities, as of the fourth quarter of 2024, the allocation ratio of actively managed equity funds (including ordinary stock, equity mix, and flexible configuration funds) toward the STAR Market stands at 13.06%, up by 2.52 percentage points from the previous quarter

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The total allocation for the STAR Market has also increased, from 3.94% to 5.91%.

When examining the heavy holdings of public funds, there are reports that last year, in the fourth quarter, 397 STAR Market stocks were heavily weighted by these fundsTop companies such as Cambricon Technologies, SMIC, and Haiguang Information had over 460 fund products vested, with total market values exceeding 42 billion yuanFor instance, Cambricon has seen its stock rise from being the 27th most held to the 9th position among public fund portfolios.

Reflecting on a longer timeline, since the launch of the STAR Market in 2019, the 20 thematic funds initiated that year have been actively operating for over five yearsBy February 14, all these products have reported positive returns since their inceptionAmong them, Harvest Technology Innovation has boasted an impressive return of 180.81%. Moreover, various other funds like E Fund Science and Technology Innovation, Dacheng STAR Market Theme A, and Huifa Technology Innovation A have each yielded returns surpassing 100% since their inception.

However, amidst this market rejuvenation, some funds have opted to pull back as prices riseWind's data indicates that by February 14, net outflows exceeded 22.6 billion yuan from certain STAR Market concept funds post-holiday, with the Huaxia Shanghai STAR Market 50 ETF experiencing the largest outflow, totaling 9.81 billion yuan.

As market interest escalates, investment firms are racing to establish their foothold in the STAR Market, with a new wave of related products becoming the focal point of competitionFebruary 17 marked the launch of the initial 12 STAR Market composite index ETFs from companies like E Fund and Huaxia Fund, alongside a new ETF from PenghuaThese funds feature a defined issuance period, typically spanning up to five days, with some extending to 12 daysBesides, apart from Haitai Baifu Fund, the other dozen managed by leading firms have set 2 billion yuan as the upper limit for issuance.

Furthermore, industries from semiconductors to biotechnology and clean energy are exhibiting promising growth signs, which bode well for the STAR Market companies

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