(Yicai) Aug. 8 -- The first two exchange-traded funds tracking the SSE Star Growth Index, a group of 50 companies trading on the Nasdaq-style market with the highest revenue and profit growth, have been given the green light to start trading.

The two new ETFs, submitted by GF Fund Management and E Fund Management, have gained regulatory approvals, Yicai learned yesterday.

The SSE Star Growth Index, a premium selection of companies listed on the Star Market, was unveiled by the Shanghai Stock Exchange and index provider China Securities Index in November. The Star Market was launched in July 2019 to ease financing for innovative startups in China.

The 50 firms in the index make products such as power equipment, pharmaceuticals, and electronics, according to data provider Choice. Each of them logged CNY1.6 billion (USD224.1 million) in revenue on average in the first quarter. Their average market cap was over CNY21.7 billion (USD3 billion) as of yesterday. However, some of them are much bigger, such as solar panel maker Jinko Solar and computer component manufacturer Hygon Information Technology, whose market caps exceeded CNY100 billion (USD13.9 billion).

Ten stocks make up over 49 percent of all the weighting of the index. Trina Solar, a photovoltaics giant, is the biggest one with a 10.2 percent share, followed by Jinko Solar and its 6.2 percent. Meanwhile, battery supplier Farasis Energy, infrared imaging and sensor developer Raytron Technology, PV inverter giant GoodWe, and several others carry weights of 4 to 5 percent.

The new ETFs are expected to be well-received by investors. Some earlier ETFs which track the SSE Star Market 50 Index, which is somewhat similar to the SSE Star Growth Index but focuses more on capital market performance rather than operational performance, have grown to tally more than 123.5 billion shares. The SSE Star Market 50 Index was set up less than three years ago.

A fund analyst in southern China said to Yicai that ETFs based on the two indexes will be complementary to each other in market positioning. The latest addition will provide investors an expanded coverage of the market and help to channel more resources to flow into fast-growing startups within the Star market, the person added.

The new products will facilitate investing in the Star Market while sharing dividends from the innovative development of "hard and core technology" companies, Luo Guoqing, head of the index department of GF Fund Management, told Yicai.

Editors: Tang Shihua, Emmi Laine