Investment Rating - The report indicates a positive outlook for the banking wealth management industry, particularly in the context of the nationwide promotion of pension wealth management products [3]. Core Insights - The expansion of pension wealth management trials to a national level marks a significant shift, enhancing the third pillar of the pension system in China [10][11]. - The introduction of a new direct registration system for wealth management products is expected to improve data governance and operational efficiency across the industry [12][13]. - Recent trends show an increase in annualized returns for cash management products, with a recorded rate of 1.29%, reflecting a slight increase from the previous week [14][18]. Summary by Sections Regulatory and Industry Dynamics - The National Financial Regulatory Administration issued a notification promoting the sustainable development of pension wealth management, expanding trials nationwide and increasing the fundraising limits for wealth management companies [10][11]. - The new system implemented by ICBC Wealth Management and Suzhou Wealth Management enhances data reporting and regulatory oversight, improving the management of sales personnel and investor protection [12][13]. Yield Performance - Cash management products saw a near 7-day annualized yield of 1.29%, up 1 basis point from the previous week, while money market funds decreased to 1.16% [14][18]. - The overall bond market remains favorable, although market sentiment is expected to remain subdued due to ongoing uncertainties [16][17]. Net Value Tracking - The net value ratio of banking wealth management products decreased to 0.78%, down 0.32 percentage points, indicating a potential pressure on the net value if credit spreads continue to widen [23][25].

Macro Strategy Overview - The report indicates that the current bull market is experiencing a pause and is undergoing a phase of consolidation, with expectations of continued volatility in the near term [1][6]. - The U.S. Federal Reserve is likely to continue its interest rate cuts in December, with a high probability of a 25 basis point reduction, as inflation remains manageable and the job market shows signs of weakness [6][29]. - The economic performance in the first three quarters of 2025 has exceeded expectations, with GDP growth at 5.2%, but there are increasing pressures on domestic demand [6][43]. Overseas Economic Environment - Following the U.S.-China trade negotiations, tariffs on Chinese goods have been reduced by 10%, although ongoing tensions between the two countries are expected to persist [6][30]. - The overall impact of tariffs on U.S. inflation has been limited, with inflation expected to remain stable due to insufficient demand [6][20]. Domestic Economic Environment - Domestic consumption and investment are showing signs of decline, while external demand remains relatively strong, indicating a divergence in economic performance [6][43]. - The report highlights that the policy environment is expected to remain stable, with a focus on infrastructure investment to support economic growth [6][55]. A-Share Market Strategy - The A-share market is currently in a phase of consolidation, with a shift towards a more balanced investment style as external disturbances ease [7][12]. - The report suggests a cautious approach to investment in the A-share market, with a focus on sectors that are expected to benefit from technological innovation in the medium to long term [7][8]. Asset Allocation Insights - The report presents a neutral outlook for major asset classes, including A-shares, Hong Kong stocks, and U.S. stocks, indicating a shift from a relatively optimistic stance in previous reports [8]. - The recommendation is to adopt a balanced asset allocation strategy while remaining vigilant for opportunities in technology and other growth sectors [8][7].

Group 1 - The report outlines a grid trading strategy, which is essentially a high buy low sell trading approach that capitalizes on price fluctuations without predicting market trends, making it suitable for volatile markets [4][12] - Characteristics of suitable grid trading targets include selecting on-market assets, stable long-term trends, low transaction costs, good liquidity, and high volatility, with equity ETFs being identified as appropriate for this strategy [4][12] Group 2 - The report highlights key ETFs for grid trading strategies, including the Military Industry Leader ETF (512710.SH), which is expected to benefit from a new round of military procurement driven by the "14th Five-Year Plan" and the upcoming "15th Five-Year Plan," with a projected defense budget of CNY 1.81 trillion for 2025, a 7.2% increase year-on-year [4][13] - The Hang Seng New Economy ETF (513320.SH) is noted for its potential to capture the benefits of China's industrial upgrade and technological development, tracking the Hang Seng New Economy Index, which includes leading companies in internet, semiconductors, innovative pharmaceuticals, and new energy sectors [5][16] - The Saudi ETF (159329.SZ) is recognized as a tool to capture long-term economic transformation opportunities under Saudi Arabia's "Vision 2030," which aims to diversify the economy away from oil dependency, with over 40% of its holdings in the financial sector and significant allocations in consumption and technology [6][18]

Regulatory Framework - The China Securities Regulatory Commission (CSRC) released the "Guidelines for Performance Comparison Benchmarks of Publicly Raised Securities Investment Funds" on October 31, 2025, marking a significant regulatory update[5] - The guidelines aim to enhance the representativeness and binding force of performance benchmarks, ensuring clear risk-return characteristics of fund products[25] Key Features of the Guidelines - The guidelines emphasize the establishment of a comprehensive internal control mechanism for fund managers regarding benchmark selection, modification, and disclosure[6] - Fund managers are required to embed benchmark management throughout the product lifecycle, ensuring effective internal constraints[8] - The guidelines mandate that benchmarks must accurately reflect the product's investment style and strategy, preventing arbitrary changes due to market fluctuations[9] Market Impact - Traditional broad-based indices remain the primary benchmark choice for newly launched products, with indices like the Hang Seng Index and CSI 800 being the most popular[15] - The guidelines have led to a significant increase in the number of funds adjusting their benchmarks to better align with their investment strategies, with 16 funds adjusting their asset composition ratios since the guidelines were issued[21] Investor Protection - The new regulations enhance transparency by requiring detailed disclosures comparing fund portfolios with benchmarks, allowing investors to assess fund performance more effectively[26] - The guidelines aim to shift investor focus from absolute returns to a more rational evaluation of relative performance, fostering a more informed investment culture[26]

New Stock Issuance - Dapeng Industrial (920091) issued shares at a price of 9.00 on November 5, 2025[1] - Fengbei Biological (603334) issued shares at a price of 24.49 on November 5, 2025[1] Market Alerts - Haixia Innovation (300300) announced an equity date on November 4, 2025[1] - Pingtan Development (000592) announced an equity date on November 4, 2025[1] - ST Zhongdi (000609) reported severe abnormal fluctuations on November 3, 2025[1] Trading Updates - Jiangbolong (301308) announced trading updates on October 30, 2025[1] - Xiangnan Xinchuan (300475) announced trading updates on October 24, 2025[1] - Lansi Heavy Industry (603169) announced trading updates on November 5, 2025[1] Additional Announcements - Standard Shares (600302) announced updates on November 5, 2025[1] - Dalian Shengya (600593) announced updates on November 5, 2025[1] - Guancheng New Materials (600067) announced updates on November 5, 2025[1]

- The report covers the period from October 27, 2025, to October 31, 2025[2][11] - The market sentiment remains high, with a potential shift towards small-cap stocks due to valuation pressures and performance verification issues in large-cap growth stocks[3][11] - Market style trends indicate a preference for small-cap and value stocks, with decreased volatility in both large-cap vs. small-cap and value vs. growth styles[12][14] - Market structure shows an increase in industry excess return dispersion, a decrease in industry rotation speed, and a decline in the proportion of rising constituent stocks[12][14] - Trading concentration has decreased, with the top 100 stocks' trading volume share declining and the top 5 industries' trading volume share remaining stable[12][14] - Market activity has seen an increase in volatility and mixed performance in turnover rates[13][14] - Commodity market trends show an increase in trend strength for non-ferrous metals and energy chemicals, a decrease in basis momentum across all sectors, and an increase in volatility except for agricultural products[26][33] - Option market analysis indicates stable implied volatility levels for SSE 50 and CSI 1000, with an increase in put option skewness and a decrease in call option skewness for CSI 1000, suggesting heightened risk hedging by market participants[37][38] - Convertible bond market shows a slight recovery, with stable and rising premium rates for bonds convertible at par and a rebound in the proportion of low premium convertible bonds[39][41]

New Stock Issuance - Multiple new stock issuances are scheduled for November 4, 2025, across various companies, including ST Zhongdi (000609) and Pingtan Development (000592) which reported significant abnormal fluctuations[1] - Jiangbolong (301308) and Xiangnong Xinchuan (300475) are among the companies with recent announcements prior to November 4, 2025[1] Abnormal Fluctuations - Pingtan Development (000592) reported severe abnormal fluctuations on November 4, 2025, indicating potential volatility in its stock performance[1] - Other companies such as ST Panda (600599) and ST Huapeng (603021) also reported abnormal fluctuations on the same date, suggesting a trend of instability in the market[1] Market Trends - The report highlights a growing trend of companies experiencing abnormal stock price movements, which may indicate increased market volatility and investor caution[1] - The presence of multiple companies with abnormal fluctuations could signal a broader market trend that investors should monitor closely[1]

New Stock Issuance - New stock for Beikang Testing (920160) issued at a price of 6.70 on November 3, 2025[1] - New stock for Danna Biology (920009) issued at a price of 17.10 on November 3, 2025[1] Market Alerts - ST Zhongdi (000609) announced significant abnormal fluctuations on October 30, 2025[1] - Jiangbolong (301308) reported severe abnormal fluctuations on October 30, 2025[1] - Xiangnan Chip (300475) disclosed abnormal fluctuations on October 24, 2025[1] - Shangtai Technology (001301) announced abnormal fluctuations on November 3, 2025[1] - Hainan Development (002163) reported abnormal fluctuations on November 3, 2025[1] - Zhongrui Co., Ltd. (002374) disclosed abnormal fluctuations on November 3, 2025[1] - Fujian Jinsen (002679) announced abnormal fluctuations on November 3, 2025[1] - Yongxing Materials (002756) reported abnormal fluctuations on November 3, 2025[1] - Xinhongze (002836) disclosed abnormal fluctuations on November 3, 2025[1] - Guocheng Mining (000688) announced abnormal fluctuations on November 3, 2025[1]

Report Summary 1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Core Viewpoints The report presents several ETF strategy indices developed by Huabao Research, aiming to help investors convert quantitative models or subjective views into practical investment strategies. It tracks the performance and positions of these indices on a weekly basis [12]. 3. Summary by Directory 3.1 ETF Strategy Index Tracking - **Overall Performance**: The table shows the performance of various ETF strategy indices for the week ending October 31, 2025, including their returns, benchmark returns, and excess returns [13]. | Index Name | Last Week Index Return | Comparison Benchmark | Last Week Benchmark Return | Excess Return | | --- | --- | --- | --- | --- | | Huabao Research Size Rotation ETF Strategy Index | -0.41% | CSI 800 | -0.05% | -0.36% | | Huabao Research SmartBeta Enhanced ETF Strategy Index | -0.01% | CSI 800 | -0.05% | 0.04% | | Huabao Research Quantitative Fire - Wheel ETF Strategy Index | 1.15% | CSI 800 | -0.05% | 1.20% | | Huabao Research Quantitative Balance ETF Strategy Index | 0.12% | SSE 50 | -0.43% | 0.55% | | Huabao Research Hot - Spot Tracking ETF Strategy Index | 0.87% | CSI All - Share Index | 0.41% | 0.46% | | Huabao Research Bond ETF Duration Strategy Index | 0.26% | ChinaBond Aggregate Index | 0.41% | -0.15% | 3.2 Specific Index Analyses - **Huabao Research Size Rotation ETF Strategy Index**: Uses multi - dimensional technical indicators and a machine - learning model to predict the return difference between the Shenwan Large - Cap Index and the Shenwan Small - Cap Index. As of October 31, 2025, the excess return since 2024 was 19.72%, 0.52% in the past month, and - 0.36% in the past week. The current position is 100% in the SSE 50 ETF [14][17]. - **Huabao Research SmartBeta Enhanced ETF Strategy Index**: Utilizes price - volume indicators to time self - built Barra factors and maps timing signals to ETFs based on their exposures to 9 Barra factors. As of October 31, 2025, the excess return since 2024 was 16.75%, - 3.43% in the past month, and 0.04% in the past week. The positions include several ETFs such as the 800 Free Cash Flow ETF, 800 Dividend Low - Volatility ETF, etc. [16][17]. - **Huabao Research Quantitative Fire - Wheel ETF Strategy Index**: Adopts a multi - factor approach, considering mid - to long - term fundamentals, short - term market trends, and market participants' behaviors. It uses valuation and congestion signals to identify industry risks and potential sectors. As of October 31, 2025, the excess return since 2024 was 31.54%, 2.17% in the past month, and 1.20% in the past week. The positions cover ETFs in sectors like non - ferrous metals, communications, etc. [22][23]. - **Huabao Research Quantitative Balance ETF Strategy Index**: Employs a multi - factor system including economic fundamentals, liquidity, technicals, and investor behavior to build a quantitative timing system for equity market trend analysis. It also predicts the market's large - and small - cap styles to adjust equity positions. As of October 31, 2025, the excess return since 2024 was - 11.35%, - 0.11% in the past month, and 0.55% in the past week. The positions include various bond and equity ETFs [25][29]. - **Huabao Research Hot - Spot Tracking ETF Strategy Index**: Tracks market sentiment, industry events, investor sentiment, policies, and historical trends to identify hot - spot index products and build an ETF portfolio. As of October 31, 2025, the excess return in the past month was 2.99% and 0.46% in the past week. The positions are similar to the Quantitative Balance ETF Strategy Index [29][34]. - **Huabao Research Bond ETF Duration Strategy Index**: Uses bond market liquidity and price - volume indicators to select effective timing factors and predicts bond yields through machine learning. When the expected yield is below a certain threshold, it reduces long - duration positions. As of October 31, 2025, the excess return in the past month was - 0.07% and - 0.15% in the past week. The positions mainly consist of short - term and long - term bond ETFs [34][37].

Market Overview - The report indicates that market sentiment remains high, with a potential shift in investment style towards small-cap stocks due to high valuations and performance pressures on large-cap growth stocks [4][16] - The A-share market has shown strong performance, with the Shanghai Composite Index briefly surpassing 4000 points, driven by improved Sino-U.S. relations and the release of the "14th Five-Year Plan" [13][16] Bond Market Insights - The bond market is expected to focus on tactical operations, with the People's Bank of China (PBOC) resuming government bond purchases, which is seen as a positive signal for market stability [12][14] - The report suggests a configuration value around 1.85% for bonds, recommending moderate increases near the upper range and timely profit-taking near the lower range of 1.75% [3][14] Investment Strategy - The report emphasizes a structural opportunity in the market, advising investors to focus on sectors with reasonable valuations and clear industrial trends while being cautious of high-positioned large-cap stocks [4][16] - It highlights the potential for small-cap stocks to outperform during the earnings vacuum period in November, as funds may flow from large-cap stocks to lower-valued, more elastic small-cap targets [4][16] Economic Indicators - The report notes that the U.S. Federal Reserve has lowered the federal funds rate by 25 basis points to a range of 3.75% to 4.00%, which is expected to provide a supportive liquidity environment for the market [10][14] - It also mentions that the manufacturing Purchasing Managers' Index (PMI) in China fell to 49.0% in October, indicating a contraction in the manufacturing sector [11][12] Performance Metrics - The domestic macro multi-asset model has achieved a year-to-date return of 13.10%, outperforming its benchmark by 4.26% [24] - The report indicates that the average daily trading volume in the A-share market has increased to 23,253.35 billion yuan, reflecting heightened market activity [22]