SSE Revamps Index System to Spotlight Small-Cap Innovation and Attract Long-Term Capital
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To better reflect the evolving structure of China's capital markets, the Shanghai Stock Exchange (SSE) and China Securities Index Co. (CSI) announced a major upgrade to their index system, including a revised SSE 380 Index and the launch of a new SSE 580 Index, both effective June 16, 2025.
The reform comes amid an expanding SSE market, where over 60%of listed companies have a market cap below RMB 10 billion. While existing indices such as the SSE 180 and SSE 380 primarily capture large and mid-cap firms, smaller companies have remained underrepresented—posing a challenge for investors seeking a more granular view of market dynamics.
The SSE 580 addresses this gap. Designed as a flagship small-cap index, it includes firms with strong innovation credentials:
30% of its weight comes from the STAR Market
40% from “Little Giants”
50% from private enterprises
60% from emerging industries
The upgraded SSE 380, now positioned as a mid-cap index, improves industry balance and stability. Its average turnover rate dropped by 7.6 percentage points over three years, with constituent coverage rising to 14.7%of SSE's market cap.
Together, the SSE 50, 180, 380, and 580 now form a comprehensive index suite, covering around 90%of SSE market capitalization and 50% of listed securities. This “one body, two wings” framework integrates:
Broad-based indices for size-based allocation
STAR Market indices for tech exposure
Dividend indices for income-focused strategies
For foreign investors, the revamp enhances transparency and facilitates index-based investing, aligning with global asset allocation practices. It also strengthens the role of indices in attracting long-term institutional capital, echoing global trends toward passive and rules-based investment frameworks.
As China pushes toward a more rational, long-term capital market, the enhanced SSE index system offers a clearer map for navigating its complex—and increasingly diversified—equity landscape.
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