New records seem to be par for the course in the A-share market lately amid a sustained bull run, and exchange-traded funds (ETFs) have been no exception, as their total value stood at a record high of 5.07 trillion yuan ($710 billion) on Monday.

It has been only four months since the ETF value first hit the 4 trillion yuan watershed.

Stock-based ETFs took the lion's share, as their combined value approached 3.46 trillion yuan on Monday. The CSI 300 ETF managed by Huatai-PineBridge Investments — valued at 412.9 billion yuan — was not only the largest stock ETF, but also larger than the remaining 1,270 ETFs trading in the A-share market.

Qiu Xiang, chief A-share market strategist of CITIC Securities, said the better-performing ETFs have reflected the logic of the recent bull run.

Computer games and Hong Kong-listed insurance companies, which are less affected by tariff policies, reported stronger growth in the first quarter, helped game-themed ETFs and non-banking ETFs — up 47.9 percent and 61.4 percent, respectively, since early April. The market's high expectations for future computing demand have pushed 5G-telecommunication-themed ETFs up 68 percent since late May, Qiu said.

This reflects that the latest market rally is all about industry trends and strong business performance. Therefore, companies with core technology assets and high profitability — especially those from the A-share resources sector, innovative drugs, games and defense — may continue their bullish performance, he added.

Liu Jipeng, a professor at the Business School of China University of Political Science and Law and a senior expert on capital markets, said A shares have entered a slow but steady bull run, supported by reform measures aimed at bolstering investor confidence and recent fund inflows.

To ensure that the bull run is sustainable, Liu stressed the need to further close regulatory loopholes that allow major shareholders to gain excessive profits from listings and stock sales, building a fairer market where most investors, including retail investors, can share returns and grow their wealth.

A recent Bloomberg report showed that China has already overtaken Japan to become the largest ETF market in the Asia-Pacific region. The Chinese ETF market is likely to hit the $8 trillion level in 2035, surpassing Europe and attracting the participation of more foreign investors.

The rapid growth of the Chinese ETF market is closely related to the government's substantial support, including accelerated approval for new products, removing the cap for financing and introducing market makers, said Bloomberg experts.

The China Securities Regulatory Commission, the country's top securities watchdog, released in late January an action plan to promote the high-quality development of index-based investment, underscoring the development of stock-based ETFs.

ETFs have been more widely adopted by Chinese investors thanks to their lower costs, transparency, higher accessibility and the ability to diversify risk, said Yang Delong, chief economist from First Seafront Fund.

Mixed performance was seen among A shares on Tuesday, with the benchmark Shanghai Composite Index shedding 0.39 percent while the Shenzhen Component Index closed up 0.26 percent.

Liu cautioned that the A-share market might face corrections given recent gap-up openings of the Shanghai Composite Index while some individual stocks could face profit-taking pressure after sharp rises, though such fluctuations are unlikely to alter the overall upward trend.

Wang Chengchang, investment strategy analyst at China Securities, said that investment has become "crowded" in A-share sectors such as automobiles, non-banking financial and basic chemicals. When there are too many industries entering such status, the market may adjust downward to some degree, he said.

Contact the writers at shijing@chinadaily.com.cn