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This past week has witnessed a significant trend across various Exchange Traded Funds (ETFs), demonstrating a net outflow of capital in bond ETFs, QDII (Qualified Domestic Institutional Investor) ETFs, and stock ETFs alikeInvestors seemed to be re-evaluating their holdings, possibly in response to wider market dynamics or shifts in sector performance.

In stark contrast to the movements in the ETF market, the A-share market experienced a notable surge in major indices during the first week following the Lunar New YearSpecifically, the Shanghai Composite Index rose by 1.63%, while the Shenzhen Component Index saw a greater jump of 4.13%. More impressive gains were noted in the STAR Market, with the STAR 50 Index increasing by 6.67%, and the ChiNext Index, which focuses on innovative enterprises, up by 5.36%. These figures suggest a renewed optimism among investors in the A-share market following the holiday lull.

Overall, the ETF market saw a reduction of approximately 19.72 billion units, bringing the total number of ETF units down to 26.598 trillionDespite this unit reduction, the total capital size of the ETFs grew by 107.58 billion CNY, reaching a new peak of 3.8069 trillion CNYThe daily trading volume of ETFs averaged 306.87 billion CNY over the week, indicating active trading despite the capital outflows.

An analysis of the capital flows reveals that institutional investors are currently pulling money out of ETFs, totaling a net outflow of 11.23 billion CNY for the weekSpecifically, bond ETFs recorded a net outflow of 1.83 billion CNY, QDII ETFs saw withdrawals of 4.96 billion CNY, and stock ETFs experienced the largest net outflow at 6.33 billion CNYIn contrast, alternative investment ETFs and money market ETFs attracted slight net inflows, amounting to 1.33 billion CNY and 557 million CNY, respectively, reflecting a shift in investor sentiment towards perceived safe havens.

In an intriguing turn of events, software-related ETFs dominated the gainers' list this week, largely benefiting from the burgeoning popularity of DeepSeek, an advanced AI-driven model

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Consequently, software ETFs became a hot magnet for capital, showing a remarkable uptick in their net asset valuesData from the Securities Times highlights that out of the 922 stock ETFs available, 818 recorded positive net asset value growth rates, with 71 of these ETFs showcasing impressive gains exceeding 10%.

Among the standout funds, the China Asset Management CSI Software Services ETF led the pack with a tremendous increase of 16.26%, bringing its latest float size to a record 1.891 billion CNY and a fund share count to 2.226 billion units—both representing all-time highs for this fund since its inception.

As we look forward, analysts from CITIC Securities express optimism regarding the implications of the DeepSeek model release, stating that it heralds a new era of AI model utilization in various industriesThe anticipated proliferation of AI applications is expected to accelerate, with the model's focus slowly shifting from pre-training to reinforcement learning and inference stagesThis evolvement is likely to sustain a growing demand for computing power, making sectors like software tools, enterprise management software, and AI computing a focal point for investment.

Interestingly, a total of six ETFs attracted net inflows exceeding 5 billion CNY this week, suggesting a sustained interest in broad-based fundsNotably, the Huatai-PB CSI 300 ETF and Huaxia SSE 50 ETF each garnered net inflows exceeding 1 billion CNY, while other notable mentions like the Southern CSI 1000 ETF and Southern CSI 500 ETF also showed substantial inflows of over 1 billion CNY.

Among industry-specific ETFs, the Huaxia CSI Robot ETF was particularly noteworthy, receiving a net inflow of 529 million CNYThis ETF, focused on robotic technologies and applications, saw its net asset value increase by 10.38%, with fund shares rising by 587 million units—a growth rate of 8.76% that indicates strong interest in this sector.

Analysts highlight that the breakthrough of DeepSeek could catalyze the convergence of AI and robotics, facilitating a productive feedback loop of "hardware iteration—data collection—model training." This advancement positions 2025 as a potential turning point for significant breakthroughs in humanoid robotic intelligence.

However, the ETFs experiencing the most significant net outflows predominantly belong to the STAR Market and semiconductor sectors

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