The landscape of technological innovation in China is evolving at a dizzying pace, especially with the recent debut of groundbreaking financial instruments that aim to channel investments into emergent technologiesThis movement has been further catalyzed by the launch of the Science and Technology Innovation Board Comprehensive Index, an initiative intended to enhance the market's ability to track and invest in companies that drive forward China's technological ambitions.

At the start of the Year of the Snake, a significant wave of enthusiasm swept through the tech sector following the arrival of Deepseek—an innovative platform that has captured international attention and signaled China's growing prowess in high-tech industriesAs excitement grew around Deepseek, investors responded investors enthusiastically, particularly during the first trading week of the new lunar year, which saw stocks related to this technology soarThis wave of confidence is instrumental in bolstering the sentiment around China's tech sector, suggesting an optimistic outlook for future developments.

Since its inception in July 2019, the Science and Technology Innovation Board (also known as the STAR Market) has operated steadily as a reform "experimental ground," fostering a supportive environment for the growth of newer, high-quality productive forcesOver nearly six years, it has evolved into a hub that nurtures innovation-driven enterprises aimed at overcoming critical technological challenges.

As of the end of 2024, statistics from the Shanghai Stock Exchange reveal that approximately 581 companies have been listed on the STAR Market, collectively boasting a staggering market capitalization exceeding 63.4 trillion yuanThis expansion isn’t limited to mere volume; the profitability of STAR-listed companies has also shown impressive growthFor instance, the total revenue of these companies reached 1.39778 trillion yuan in 2023, marking a year-on-year growth of 4.7%—a testament to the resilience and potential of these high-tech enterprises.

The need for an all-encompassing index to represent this burgeoning market was clear, leading to the recent establishment of an intricate index system

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The inclusive STAR Comprehensive Index, which includes various sub-indices such as STAR 50, STAR 100, and STAR 200, features 26 distinct indices designed to give investors a clearer picture of the sector's performanceThis comprehensive approach meets the increasing demand for indices that represent the complete spectrum of STAR-listed companies as more entities join the board.

The STAR Comprehensive Index—introduced on January 20, 2024—provides investors with a robust tool, capturing over 97% of the market in terms of both market capitalization and the diversity of constituent stocksWhile existing indices like STAR 50 and STAR 100 cover a significant number of securities—around 350 in total—they leave out many smaller, but rapidly growing firms within the STAR MarketThe Comprehensive Index looks to fill this gap, ensuring that a broader array of companies is represented and compellingly showcasing their combined growth trajectories.

What sets the STAR Comprehensive Index apart is its approach to reflecting the overall performance of these enterprises, particularly when accounting for dividend returns, allowing investors to gain a well-rounded understanding of their investmentsWith its coverage of large, medium, and small enterprises, the index strategically aligns with the market's growth patterns, ensuring representation is proportionate across various sectors and scales.

The focus on emerging industries—particularly those characterized by high technology content—is evident, as the six major sectors represented by the STAR Comprehensive Index include electronics, biomedicine, power equipment, machinery, computing, and national defense—a configuration where electronics alone accounts for nearly 45% of the indexThis underscores the strategic priorities of the STAR Market itself which aligns with national interests surrounding technological self-sufficiency and innovation.

By offering a holistic view, the STAR Comprehensive Index bolsters the index system as a whole, enhancing the diversity of investment tools available to market participants

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Furthermore, local indices are anticipated to gain heightened influence and competitive edge, which is essential for attracting fresh capital into the innovation-driven marketplace and supporting crucial technology development.

As investor focus shifts, the STAR Market indices are poised to gain significant traction, reflecting their increasing importance in understanding and enhancing China’s niche in global technology innovationUp until the close of 2024, STAR Market-linked products have amassed a substantial scale, collectively amounting to around 2.5 trillion yuan—reportedly, the STAR 50 index products alone made up over 70% of this total, showcasing the strong demand for diversified exposure to this dynamic market.

Among the early supporters of this comprehensive approach is Bosera Asset Management, one of the first to offer STAR Comprehensive Index ETFsThe fund aims to provide seamless access for investors seeking to dive deep into "hard technologies," enhancing the convenience of investing in this high-potential sectorThe strategic design of these products is aligned with the STAR Board's objective to empower companies working towards defined national technological ambitions, addressing critical advancements and innovations.

With over six decades of history, Bosera's contributions to the fund management industry reflect a commitment to evolving alongside national policies, particularly in contexts of supporting strategic technology firmsThe data indicates that 2023 was a fruitful year, with over 60% of STAR companies showing a positive growth trajectory in revenue—47 companies achieved an astounding revenue increase exceeding 50%, highlighting the vibrancy and potential in this sector.

The capabilities of STAR companies extend far beyond domestic markets, as evidenced by impressive overseas earnings, which topped 402.62 billion yuan in 2023, representing a notable year-on-year growth of 9.7% and comprising 28.8% of the overall revenue for these companies

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