Key Points - The article discusses significant events impacting the economic landscape, including the U.S. allowing Nvidia to export AI chips to China under certain conditions, emphasizing national security [2] - The Central Political Bureau of the Communist Party of China highlighted the importance of domestic demand and a strong domestic market in its economic work for 2026, addressing issues like insufficient effective demand [2][4] - The Federal Reserve lowered its policy interest rate range by 25 basis points to 3.50%-3.75%, with expectations of 1 to 2 rate cuts in the following year [2] - In November, consumer prices showed a slight decrease month-on-month but a year-on-year increase, while the Producer Price Index (PPI) rose slightly month-on-month but fell year-on-year [3] - The Central Economic Work Conference outlined eight key tasks for 2026, focusing on domestic demand and innovation-driven growth [4] Market Overview - The bond market showed signs of recovery after adjustments due to credit events in real estate and concerns over monetary easing, with a shift in language regarding monetary policy from "timely" to "flexible and efficient" [6] - The A-share market experienced mixed performance as seasonal tightening of funds led to a slowdown in new capital inflow, resulting in a focus on short-term opportunities amid a backdrop of policy anticipation [7]

Group 1 - The article highlights six key changes in macroeconomic conditions, policy orientation, and focus areas compared to the previous year, transitioning from "risk prevention" to "risk mitigation" [3] - It emphasizes the need for a solid foundation for the "14th Five-Year Plan" while balancing short-term stability and long-term development goals [3] - The development path is defined as "supply-demand coordination, moving towards new directions," aiming to resolve supply-demand conflicts and pursue high-quality development [3] Group 2 - The A-share market is expected to experience short-term volatility, but remains in a bullish sentiment overall [4] - There is an improvement in external situation assessments, with macro policy returning to a "normal" stance from an "extraordinary" one [4] - Fiscal policy is expected to see a marginal reduction in intensity, while monetary policy will maintain a supportive position, with a new focus on reasonable price recovery targets [4] Group 3 - The article suggests that the upcoming Spring Festival may lead to an early onset of market activity, presenting potential opportunities for investment [5] - In the short to medium term, sectors such as technology and growth-oriented industries are likely to continue outperforming [5] - The investment strategy for 2026 may focus on high-growth and high-dividend rotation opportunities, with an emphasis on high-growth sectors at the beginning of the year [5]

Regulatory and Industry Dynamics - In 2025, index-based wealth management products are expected to experience explosive growth, with 98 existing non-structured products issued by 12 wealth management companies as of December 10, 2025 [3][7] - Notably, among these products, Bank of China Wealth Management issued 36, Huaxia Wealth Management 33, and China Post Wealth Management 9, with the majority of products established in 2025 [7] - The best-performing product has an annualized return of 37.86%, with 23 products achieving returns above 5% since inception [7] - Wealth management companies are increasingly adopting third-party bond valuation services, such as China Chengxin Index Valuation, amid a transition period for valuation rectification [9][10] Peer Innovation Dynamics - China Aluminum Industry's benchmark enterprise "Innovation Industry" was listed on the Hong Kong Stock Exchange on November 24, 2025, focusing on green aluminum production [13] - This IPO attracted significant attention from international capital markets, with investments from long-term funds and industry investors, reflecting financial institutions' support for green transformation [13] Yield Performance - For the week of December 1-7, 2025, cash management products recorded a 7-day annualized yield of 1.28%, while money market funds reported 1.16%, indicating stability in yields [15] - The bond market faced headwinds, with the 10-year government bond yield remaining at 1.83% and the 30-year yield rising by 7 basis points to 2.25% [16][17] - Factors affecting the bond market include a cooling expectation of monetary policy easing, low sensitivity to fundamental data, and ongoing uncertainty regarding public fund sales regulations [17][19] Net Value Tracking - The net value ratio of bank wealth management products rose to 2.89%, an increase of 0.42 percentage points, while credit spreads widened by 3.33 basis points [24] - The current credit spread remains at historical lows since September 2024, indicating limited value for investors [24]

Market Overview - In November 2025, the equity market experienced an overall decline, while the bond market saw a slight retreat. The A-share market fell, with only large-cap value stocks rising, and sectors like finance and consumer showing relative resilience, while the previously high-performing technology sector faced significant declines [3][7] - The textile, oil and petrochemical, and banking sectors led gains with increases of 3.53%, 3.19%, and 3.16% respectively, while the electronics, automotive, and computer sectors recorded declines of -4.87%, -5.61%, and -5.64% respectively [7] - The bond market faced slight fluctuations due to the failure of interest rate cut expectations and stock market adjustments, leading to redemption pressures on fixed income products [8] Equity Fund Strategy - The current market lacks clear catalysts, and trading sentiment has cooled, with indices facing volatility pressure at high levels. The recommended strategy is to maintain a balanced approach, focusing on emerging technology and high-end equipment manufacturing assets, while also considering cyclical sectors with potential for marginal improvement [3][13] - The focus on artificial intelligence (AI) investments remains strong, with concerns about potential bubbles being countered by robust capital expenditure plans from major tech companies [13] - Cyclical sectors are highlighted for their reasonable valuations and positive outlooks for next year, with potential price volatility expected if demand improves during a rate-cutting cycle [14] Bond Fund Strategy - The bond market is expected to continue its oscillating pattern into December, with year-end profit-taking by institutions and political signals contributing to a cautious market outlook. The strategy suggests waiting for better allocation opportunities while maintaining a controlled duration in bond portfolios [4][20] - The pure bond fund strategy aims to provide stable returns with a focus on risk management, while the fixed income plus strategy seeks to balance steady income with some equity exposure for potential growth [26][27] Fund Performance Review - Since the construction of the active equity fund selection index on May 11, 2023, it has achieved a cumulative net value of 1.4027, outperforming the active equity fund index by 18.62% [16] - The short-term bond fund selection index has a cumulative net value of 1.0451 since its inception on December 12, 2023, with an excess return of 0.5864% over its benchmark [21] - The medium-term bond fund selection index has a cumulative net value of 1.0661, outperforming its benchmark by 0.3465% since its construction [23]

Core Insights - The article discusses the significant developments in the banking wealth management sector in November, highlighting regulatory changes, industry dynamics, and product innovations [3][4][5]. Regulatory and Industry Dynamics - The new generation of wealth management systems has been fully launched, marking a critical breakthrough in market infrastructure and laying the technical foundation for future information disclosure improvements [3]. - Concerns have arisen regarding the use of T-1 valuation rules for cross-product value transfer, emphasizing the need to prevent arbitrage risks during the transition to net value management [3]. - Several wealth management companies have undergone management changes, reflecting active adjustments in operational strategies amid a low-interest-rate and highly regulated environment [3]. - The trend of open-ended amortized cost bond funds has emerged, with wealth management subsidiaries becoming the main players in seeking stable returns amid market volatility [3]. - The "China Banking and Insurance Asset Management Association" has completed its name change, promoting deeper functional regulation within the industry [3]. Innovations in Wealth Management Products - China Post Wealth Management launched index products focused on technology innovation and green bonds, while other firms like CCB Wealth Management are exploring customized products to support tech enterprises [4]. - Several wealth management companies have introduced diversified product systems to meet varied customer needs, such as the global commodity integration strategy index by China Merchants Bank Wealth Management [4]. - The trend of wealth management funds participating in equity investments, particularly in hard technology companies, is evident, showcasing a shift towards supporting the real economy [4]. Market Trends and Performance - The total market size of wealth management products reached 31.67 trillion yuan in November, reflecting a slight month-on-month increase of 0.12% and a year-on-year increase of 6.21% [5][13]. - The annualized yield for cash management products decreased to 1.28%, while pure fixed-income products saw a yield of 2.04%, down by 1.13 percentage points [5]. - The market's net value breach rate was recorded at 2.79%, indicating a slight decrease, while credit spreads also contracted [5]. New Product Launches - The scale of newly issued wealth management products decreased in November, consistent with seasonal trends, with a continued focus on fixed-income and closed-end products [5][13]. - Most new products have seen a downward adjustment in performance benchmarks, reflecting a consensus among wealth management companies regarding the long-term low-interest-rate environment [5]. Product Maturity and Compliance - The achievement rates for closed-end and open-end products were 84.09% and 62.16%, respectively, indicating a slight decline from October [6]. - The article emphasizes the importance of compliance and risk management in the evolving landscape of wealth management, particularly in light of regulatory pressures and market dynamics [3][4].

Core Viewpoint - The article discusses various ETF grid strategies focusing on sectors such as military, gaming, software, and internet, highlighting their growth potential driven by government policies and market trends. Group 1: Military Sector ETF (512710.SH) - The military sector ETF is positioned to benefit from China's defense budget, which is projected to reach 1.81 trillion yuan in 2025, a 7.2% increase year-on-year, marking a historical high. However, this budget still represents less than 1.3% of China's GDP, significantly lower than the U.S. and Russia [3][4]. - The ETF tracks the China Securities Military Leading Index, investing in key military sectors such as aviation equipment, military electronics, missiles, and drones, which are expected to improve due to a new procurement cycle [4][5]. Group 2: Gaming Sector ETF (159869.SZ) - In 2025, a record number of 178 domestic games and 6 imported games were approved, with a total of 1,624 game licenses issued from January to November, surpassing the previous year's total. This normalization of license issuance provides a stable foundation for the gaming industry [6][7]. - Chinese self-developed games generated $9.501 billion in overseas sales in the first half of 2025, reflecting an 11.07% year-on-year growth, indicating strong international market performance [6][7]. Group 3: Software Sector ETF (159852.SZ) - The "14th Five-Year Plan" emphasizes accelerating technological self-reliance and innovation, particularly in software, which is experiencing rapid growth due to government support and the integration of AI technologies [9][10]. - The ETF tracks the China Securities Software Service Index, covering 30 leading companies in the software sector, providing an investment tool to capitalize on long-term growth in software and AI integration [9][10]. Group 4: Internet Sector ETF (513330.SH) - Recent developments in AI products from major internet companies, such as Alibaba and ByteDance, indicate a shift towards more advanced AI applications that enhance user interaction and service capabilities, thereby strengthening their market positions [12][13]. - The ETF is expected to benefit from the increasing integration of AI in core products, which can create new revenue streams and improve monetization capabilities for internet firms [12][13].

Group 1 - The core viewpoint of the article highlights the recent trends in the A-share market, indicating a continuation of volume contraction and a rotation of themes, with market participants awaiting new guiding signals [3][11]. - The A-share market saw a slight increase in major indices, with the Shanghai Composite Index rising by 0.37%, the CSI 300 by 1.28%, and the ChiNext Index by 1.86%, indicating a stronger performance in growth styles compared to value styles [11]. - The average daily trading volume in the A-share market was 16,870 billion, showing a decrease compared to the previous week, reflecting a cautious market sentiment as it approaches significant policy meetings [11]. Group 2 - The non-bank financial sector is influenced by the recent notification from the financial regulatory authority, which aims to encourage insurance funds to invest more in specific equity assets by adjusting risk factors [4][12]. - The commercial aerospace sector has shown active performance due to recent event-driven catalysts, with significant developments in rocket launches and tests, suggesting a potential shift from emotional to logical investment strategies [4][12][13]. - Precious metals, particularly silver, have experienced a rapid price increase due to global liquidity recovery and supply-demand dynamics, with long-term trends expected to be influenced by the narrative of shrinking dollar credit [4][13]. Group 3 - The public fund market is undergoing a transformation with the introduction of new performance assessment guidelines aimed at correcting past issues of short-term incentives and soft accountability, promoting a focus on value creation and high-quality development [4][14]. - The guidelines emphasize a core assessment system based on investment returns, aiming to align the interests of fund managers with long-term returns for investors [14]. Group 4 - The active equity fund indices showed positive performance, with the Active Stock Fund Selection Index rising by 1.64% last week, achieving a cumulative excess return of 15.40% since inception [5]. - The Value Stock Fund Selection Index increased by 1.62%, with a cumulative excess return of 3.96% since inception, while the Balanced Stock Fund Selection Index rose by 1.00%, achieving a cumulative excess return of 9.27% [6][7]. - The Growth Stock Fund Selection Index saw a smaller increase of 0.64%, with a cumulative excess return of 13.45%, while the Pharmaceutical Stock Fund Selection Index decreased by 1.73%, but still recorded a cumulative excess return of 21.62% [8][9].

Market Overview - The bond market showed weak performance last week, with the 1-year government bond yield remaining at 1.40%, the 10-year yield rising by 0.68 basis points to 1.85%, and the 30-year yield increasing significantly by 7.2 basis points to 2.26%. The overall bond market is influenced by the recovering sentiment in the equity market and the year-end demand for banks to sell bonds to realize profits, leading to a trend of short-end fluctuations and long-end weakness, particularly in ultra-long bonds [3][15]. - The bond market is expected to face year-end negative disturbances, with increased selling pressure from institutions and uncertainties surrounding upcoming political meetings affecting bullish sentiment. The 10-year government bond yield is anticipated to operate above 1.80%, and a neutral duration strategy is recommended while waiting for better allocation opportunities [15]. Public Fund Market Dynamics - A draft for the performance assessment management guidelines for fund management companies has been released, emphasizing the need for fixed-income products to focus more on credit and liquidity management. This marks a new phase in the reform of compensation and performance assessment in the public fund industry, aiming to establish a long-term incentive mechanism centered on medium to long-term investment returns [17]. Fund Index Performance Tracking - The Money Enhanced Index rose by 0.02% last week, with a cumulative return of 4.37% since inception [4]. - The Short-term Bond Fund Index fell by 0.01%, with a cumulative return of 4.50% since inception [5]. - The Medium to Long-term Bond Fund Index decreased by 0.15%, with a cumulative return of 6.58% since inception [6]. - The Low Volatility Fixed Income + Fund Index fell by 0.01%, with a cumulative return of 4.24% since inception [7]. - The Medium Volatility Fixed Income + Fund Index increased by 0.51%, with a cumulative return of 6.15% since inception [8]. - The High Volatility Fixed Income + Fund Index rose by 0.43%, with a cumulative return of 7.76% since inception [9]. - The Convertible Bond Fund Index increased by 0.53%, with a cumulative return of 21.98% since inception [9]. - The QDII Bond Fund Index fell by 0.21%, with a cumulative return of 10.09% since inception [10]. - The REITs Fund Index decreased by 1.16%, with a cumulative return of 31.68% since inception [11].

Group 1 - The State Council emphasized the importance of new urbanization as a key driver for expanding domestic demand and promoting industrial upgrades, highlighting the need for urban renewal actions and high-quality real estate development [2] - The Chairman of the China Securities Regulatory Commission pointed out the long-term positive outlook for the economy and the capital market, while identifying issues such as the need for optimization of listed company structures and the lack of long-term funding [2] - The regulatory focus will be on supporting technological innovation, meeting diverse investor needs, and enhancing risk prevention capabilities through precise and efficient supervision [2] Group 2 - The National Financial Supervision Administration announced adjustments to risk factors for insurance companies, reducing the risk factor for certain index component stocks from 0.3 to 0.27 [3][4]

Macro Overview - The U.S. labor market is slowly cooling down, with a high probability of the Federal Reserve cutting interest rates in December, maintaining a loose liquidity environment [4] - In September, the U.S. non-farm payrolls increased by 119,000, significantly better than expected, although previous months' data was revised downwards, indicating ongoing weakness in the labor market [4] - The Federal Reserve is expected to continue cutting rates in December, as the job market shows signs of slowing down, while inflation remains manageable [4] - Domestic economic pressures are rising, but the annual growth target of 5% is still likely to be achieved [4] - The fourth quarter GDP growth rate is expected to drop to around 4.5%, with internal demand pressures increasing, particularly in consumption and investment [4] - The overall policy environment is expected to remain stable, with less urgency for new policies, although there will be a focus on technology innovation and expanding domestic demand [4] A-share Strategy and Views - The market is transitioning from a defensive to an offensive stance, with a focus on technology and growth sectors [4] - Economic fundamentals indicate increased pressure, with investment and consumption declining, while price indices are stabilizing [4] - The liquidity environment is tightening, with A-share trading volumes decreasing as year-end activity is weaker than in the third quarter [4] - External liquidity concerns are easing, with improved relations between China and the U.S. and a more favorable external environment [4] - December is seen as a period for positioning ahead of the spring market, with expectations for a rebound in market sentiment in early 2026 [4] Industry/Style Focus - The market is shifting towards technology and growth opportunities, with a focus on sectors like AI, semiconductors, and new energy [4] - The volatility risk has decreased, and the market is expected to stabilize, making it a good time to focus on high-growth sectors [4] - The strategy includes a diversified approach, considering global assets such as Japanese and European stocks, as well as gold [6]