1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints The report provides a weekly economic analysis from October 19 - October 25, 2025, covering various aspects including industrial production, personnel and freight flow, consumption, investment, exports, and performance of major asset classes, along with important policies and events [1]. 3. Summary by Directory 3.1. Major Asset Classes - This week, bond indices showed mixed performance, stock indices generally rose, most commodities increased, and foreign currencies generally fell. Among bond indices, the ChinaBond Corporate Bond AAA and AA+ indices had the highest weekly gains of 0.14%, while the ChinaBond 10 - year Treasury Bond index had the largest weekly decline of 0.13%. The ChiNext index led the stock market with a weekly gain of 8.05%. The Nanhua Energy and Chemicals Index in commodities rose the most, by 3.66%, and the Nanhua Precious Metals Index fell the most, by 6.69%. Foreign currencies depreciated against the RMB, with the Japanese yen having the largest weekly decline of 2.06%, and the US dollar depreciated by 0.05% [1]. 3.2. Industrial Production - Production performed well. In the upstream sector, the weekly coal consumption in the national power plant sample area decreased by 1.27% week - on - week, the petroleum asphalt plant operating rate increased by 1.30 pcts to 35.80%, the blast furnace operating rate increased by 0.48 pcts to 84.73%, and the crude steel output decreased by 0.89%. In the real - estate chain, the rebar operating rate increased by 1.64 pcts to 42.97%, the float glass operating rate remained flat at 76.65%, and the mill operating rate increased by 0.38 pcts to 38.27%. In the consumer goods chain, the polyester filament operating rate remained flat at 91.04%, the PTA operating rate increased by 0.42 pcts to 75.98%, and the methanol operating rate decreased by 1.67 pcts to 82.71%. In the automotive chain, the semi - steel tire operating rate increased by 0.95 pcts to 73.67%, and the full - steel tire operating rate increased by 1.06 pcts to 65.58% [1]. 3.3. Personnel and Freight Flow - Personnel flow continued to rise, and freight prices increased slightly. The 7 - day moving average (7DMA) of the national migration scale index increased by 6.68% week - on - week. The 7DMA of domestic flight operations increased by 1.53%, while that of international flights decreased by 0.79%. The subway passenger volumes in Beijing, Shenzhen, and Guangzhou increased, while that in Shanghai decreased. The 4 - week moving average (4WMA) of the road logistics freight rate index increased by 0.01% week - on - week, and the total volume was higher than the same period in previous years [1]. 3.4. Consumption - The growth rate of automobile sales declined, and price performance continued to diverge. The previous period's automobile wholesale increased by 1.00% year - on - year, while retail sales decreased by 3.00%. Both the 4WMA of the wholesale and retail year - on - year growth rates declined. This period's movie box office decreased by 39% week - on - week, and the 7DMA of the number of moviegoers decreased by 41%. Agricultural product prices showed divergence, with pork prices decreasing by 1.66% week - on - week and vegetable prices increasing by 5.65% [1]. 3.5. Investment - Construction showed good performance, while the commercial housing market declined. The cement inventory - to - capacity ratio increased by 0.2 pcts week - on - week, the cement price index increased by 0.23%, and the cement shipping rate increased by 0.6 pcts. Rebar inventory decreased by 4.1% week - on - week, the proportion of profitable steel mills nationwide decreased by 7.8 pcts, and the apparent demand for rebar increased by 2.8%. Overall, the terminal demand for construction was good. The 7DMA of the commercial housing transaction area in 30 large - and medium - sized cities decreased by 7.3% week - on - week. By city tier, the transaction area in first - tier cities increased, while those in second - and third - tier cities decreased. The 7DMA of the second - hand housing transaction area in 16 cities decreased by 4.7%, and the national second - hand housing listing price index decreased by 0.2%. The land transaction area in 100 large - and medium - sized cities increased, and the land transaction premium rate increased week - on - week [1]. 3.6. Exports - Port throughput increased, and shipping indices showed divergence. Port cargo throughput increased by 2.5% week - on - week, and container throughput increased by 3.6%. The BDI index decreased by 3.77% week - on - week, while the domestic SCFI and CCFI indices increased by 7.11% and 2.02% respectively [1]. 3.7. Important Policies/Events - In the third quarter of 2025, the economic growth rate declined; the October LPR quote remained unchanged; a new round of China - US trade consultations started on the 24th in Malaysia; the Fourth Plenary Session of the 20th Central Committee of the Communist Party of China successfully concluded; the central bank announced a 900 - billion - yuan MLF operation on October 27 [1].

1. Report Industry Investment Rating No relevant information provided. 2. Core Views of the Report - Policy support has significantly boosted the equity and convertible bond markets. The Shanghai Composite Index and the Wind Micro - cap Stock Index have reached new phased highs, but the style rotation is rapid, with technology and dividend sectors taking turns. Amid the intertwining of Sino - US tariff issues and domestic policy expectations, the equity market is highly volatile, yet its downside risk is controllable. The convertible bond market is expected to be optimistic, and in the short - term, its initiative comes from the liability side. With the return of net inflows into convertible bond ETFs and the potential launch of stock - bond constant ETFs, the convertible bond market may start a new round of rally after a retracement [3][6]. 3. Summary by Relevant Catalogs 3.1 Week's View and Outlook - Policy has significantly boosted the equity and convertible bond markets. The Shanghai Composite Index and the Wind Micro - cap Stock Index hit new phased highs, with a fast - paced style rotation between technology and dividend sectors. The equity market is volatile due to Sino - US tariffs and domestic policy expectations, but its downside risk is controllable. The convertible bond market is likely to be positive, and in the short - term, the liability side is driving it. Net inflows into convertible bond ETFs have resumed, and the upcoming stock - bond constant ETFs may increase demand for convertible bonds. Attention should be paid to the start of a new round of market after a retracement [3][6]. 3.2 Convertible Bond Valuation - During the week of the Fourth Plenary Session of the 20th CPC Central Committee, risk preference was resilient, and the 100 - yuan valuation rose to around 36%. High - grade large - cap convertible bonds showed stronger valuation performance. As of the latest data, the 100 - yuan premium rate of the whole - market convertible bonds was 35.7%, up 0.6% from the previous week, and the latest quantile was at the 93.9% percentile since 2017. High - grade convertible bonds had a larger increase in valuation than low - grade ones. Compared with last week, the conversion premium rate and the bottom - support premium rate in each parity range mainly increased. The valuation performance was relatively strong in the low - parity range below 80 yuan and the 110 - 120 yuan parity range, while it slightly declined in the high - parity range above 140 yuan. The median price and the yield to maturity of convertible bonds were reported at 131.80 yuan and - 6.47% respectively, up 2.07 yuan and down 0.01% from the previous week, and their quantile levels were at the 99.20 and 0.60 percentiles since 2017 [5][7][12]. 3.3 Clause Tracking 3.3.1 Redemption - During the week, Tongcheng Convertible Bond announced redemption, while Fuchun Convertible Bond, Youfa Convertible Bond, and Zhonghuan Convertible Bond 2 announced non - redemption, with a forced - redemption rate of 25%. There were 18 convertible bonds that had issued forced - redemption or maturity - redemption announcements but had not yet delisted. The potential conversion or maturity balance of the forced - redeemed and matured convertible bonds among the non - delisted ones was 4.9 billion yuan. Currently, there were 34 convertible bonds in the redemption process, and 12 were expected to meet the redemption conditions next week, which should be closely monitored [5][15][18]. 3.3.2 Downward Revision - During the week, Lanfan Convertible Bond proposed a downward revision. As of the latest data, 107 convertible bonds were in the non - downward - revision period, 23 could not be downward - revised due to net - asset constraints, 2 had triggered the condition and the stock price was still below the downward - revision trigger price but no announcement had been made, 32 were accumulating days for downward revision, and 1 had issued a board - meeting plan for downward revision but had not yet held a general meeting of shareholders [20]. 3.3.3 Put Option - During the week, Baolai Convertible Bond issued a conditional put - option announcement. As of the latest data, 2 convertible bonds had issued put - option announcements, and 5 were accumulating days to trigger the put - option. Among them, 1 proposed a downward revision, 1 had triggered the downward - revision condition, 1 was accumulating days for downward revision, and 2 were in the non - downward - revision period [24]. 3.4 Primary Issuance - There was no new issuance of convertible bonds during the week. Jin 25 Convertible Bond, Funeng Convertible Bond, and Jinlang Convertible Bond 02 had been issued but not yet listed. According to the latest announcement, Jin 25 Convertible Bond will be listed next week (October 27, 2025). As of the latest data, there were 7 convertible bonds awaiting registration approval, with a total issuance scale of 6.7 billion yuan, and 6 convertible bonds that had passed the listing committee review, with a total issuance scale of 3.6 billion yuan [27].

Core Insights - The report emphasizes the importance of understanding the Black-Scholes (BS) model as a foundational option pricing model, despite its limitations in practical applications [6][7][8] - It highlights the advantages of using Monte Carlo simulation for pricing convertible bonds, particularly in accounting for complex features such as redemption and down-round clauses [34][41] - The report discusses the relationship between implied volatility and actual bond pricing, suggesting that discrepancies can indicate market conditions [20][25][26] Group 1: BS Model and Its Applications - The BS model is a fundamental option pricing model that assumes stock prices follow a geometric Brownian motion, which is crucial for understanding option pricing [6][9] - The report outlines the application of the BS model in calculating implied volatility, theoretical pricing, and Greek letters, which are essential for assessing convertible bonds [20][31] - It notes that the BS model's limitations include its inability to account for certain bond features, leading to potential overvaluation or undervaluation of convertible bonds [26][18] Group 2: Monte Carlo Simulation - Monte Carlo simulation is presented as a method that can effectively incorporate the impact of bond features on pricing, contrasting with the BS model's separation of bond value and option value [34][41] - The report details the steps involved in Monte Carlo simulation, including generating random stock price paths and evaluating cash flows based on bond features [34][37] - It concludes that while Monte Carlo simulation may require more computational resources, it often yields more accurate pricing results compared to the BS model, especially in bear markets [41][46] Group 3: Investment Strategies - The report suggests constructing investment strategies based on the pricing discrepancies identified through BS and Monte Carlo simulations, focusing on undervalued convertible bonds [34][41] - It emphasizes the importance of Greek letters in developing investment strategies, as they provide insights into the sensitivity of bond prices to various factors [31][32] - The report indicates that strategies based on BS pricing deviations and Monte Carlo simulations have historically outperformed traditional low-price strategies [41][49]

1. Report Industry Investment Rating No information regarding the industry investment rating is provided in the given content. 2. Core View of the Report - Market liquidity continues to improve, but attention should be paid to the selling pressure brought by concentrated share unlocks. The market showed a mixed trend this week, with the first three days in adjustment and the last two days in recovery. There was sector differentiation, with data centers and environmental protection and water services leading the gains, while consumption and affordable housing sectors led the losses. As it is the window period for the third - quarter reports (expected to be released next week), market trading activity is increasing. However, the pressure of strategic placement share unlocks in REITs needs to be watched. On October 29th, 46% of the shares of Huatai Baowan Logistics REIT will be unlocked (approximately 603 million yuan), and about 7.5 billion yuan worth of shares are expected to be unlocked in November (a total of 5 REITs, with the unlocked share ratio ranging from 18.1% to 55.8%), which may bring certain selling pressure. [3] - As of October 24, 2025, 18 new public REITs have been successfully issued this year, with a total issuance scale of 36.34 billion yuan, a year - on - year decrease of 24.2%. Two new public REITs made progress this week, with the establishment of CITIC Construction Investment Shenyang International Software Park REIT and Huaxia Zhonghai Commercial REIT. [4] 3. Summary According to the Directory 3.1 First - level Market: Two New Public REITs Made Progress - This year, 18 public REITs have been successfully issued (6 in Q1, 4 in Q2, 6 in Q3, and 2 in October), with a total issuance scale of 36.34 billion yuan, a year - on - year decrease of 24.2%. Two new public REITs, CITIC Construction Investment Shenyang International Software Park REIT and Huaxia Zhonghai Commercial REIT, were established this week. [4] - As of October 24, 2025, in the current approval process, there are 10 newly - applied REITs, 3 of which have been queried and responded, 3 have passed the review, and 3 are registered and awaiting listing. For expansion, 5 have been applied, 3 have been queried and responded, and 2 have passed the review. [4] 3.2 Second - level Market: Liquidity Increased This Week 3.2.1 Market Review: The CSI REITs Total Return Index Fell 0.16% - The CSI REITs Total Return Index (932047.CSI) closed at 1045.13 points this week, with a decline of 0.16%, underperforming the CSI 300 by 3.08 percentage points and the CSI Dividend by 0.89 percentage points. The year - to - date increase of the CSI REITs Total Return Index is 7.98%, underperforming the CSI 300 by 10.46 percentage points and outperforming the CSI Dividend by 6.66 percentage points. [4] - By project attribute, property - type REITs fell 0.13%, while franchise - type REITs rose 0.46%. By asset type, data centers (+1.40%), environmental protection and water services (+1.32%), transportation (+0.47%), and warehousing and logistics (+0.36%) sectors performed well. [4] 3.2.2 Liquidity: Both Turnover Rate and Trading Volume Increased - The average daily turnover rates of property - type and franchise - type REITs this week were 0.53% and 0.47% respectively, an increase of 13.70 and 11.36 basis points compared to last week. The trading volumes this week were 496 million and 134 million shares respectively, with a week - on - week increase of 35.73% and 31.88%. The data center sector had the highest activity. [4] 3.2.3 Valuation: The Affordable Housing Sector Had a Higher Valuation - From the perspective of ChinaBond valuation yields, the yields of property - type and franchise - type REITs were 3.93% and 4.07% respectively. The warehousing and logistics (5.40%), transportation (4.93%), and park (4.48%) sectors ranked among the top three. [4] 3.3 This Week's News and Important Announcements - **News**: On October 22nd, Shenghao Group initiated the issuance of communication tower infrastructure public REITs, and companies such as China Merchants Fund had in - depth discussions on including communication towers as a new asset type in the REITs pilot scope. On October 23rd, the Guangzhou government supported the issuance of REITs for eligible consumption and cultural tourism projects; the Qingcheng Mountain - Dujiangyan Scenic Area launched the selection of asset appraisal institutions for its REITs; the Putuo District government approved the public REITs project of Zhoushan International Aquatic City; Hunan Province solicited opinions on promoting the issuance of REITs for urban renewal projects. [34] - **Announcements**: Several REITs released their September operation data, including China Merchants Expressway REIT, Huatai Jiangsu Expressway REIT, etc. Huatai Baowan Logistics REIT and CICC Liandong Science and Technology Innovation REIT announced share unlocks. [34]

Investment Rating - The report maintains a "Buy" rating for Jiangsu Jinzu (600901) [2] Core Views - The company's performance for the first nine months of 2025 met expectations, with operating income reaching 4.638 billion yuan, a year-on-year increase of 17.15%, and net profit attributable to the parent company at 2.446 billion yuan, up 9.82% year-on-year [5][8] - The company has shown steady growth in interest-earning assets and a significant increase in bond payables, with total assets reaching 162 billion yuan, an 18% increase from the previous year [8] - Asset quality is improving, with a non-performing financing lease asset ratio of 0.90%, down 1 basis point from the previous year [8] - The net interest margin for the leasing business reached 3.75%, an increase of 8 basis points year-on-year [8] - The company has implemented a mid-term dividend policy, with a payout ratio of 48% and a dividend yield of 2.16% [8] Financial Data and Profit Forecast - The company forecasts operating income for 2025 to be 5.891 billion yuan, with a year-on-year growth rate of 11.6% [6] - The net profit attributable to the parent company is projected to be 3.234 billion yuan in 2025, reflecting a year-on-year growth of 9.9% [6] - The earnings per share (EPS) for 2025 is estimated at 0.56 yuan, with a return on equity (ROE) of 12.9% [6][9]

Investment Rating - The report maintains a positive outlook on the shipping sector, highlighting a shift from expectation-driven to reality-driven stock price movements, with sufficient safety margins around current valuations [5][6]. Core Insights - The shipping sector is experiencing a historical opportunity as three negative factors (policy, exchange rates, and ship prices) have reversed to positively impact the market. The Clarksons second-hand ship price index is steadily breaking through 2024 highs, indicating an approaching inflection point for new ship prices [5][6]. - The report recommends specific companies such as China Merchants Energy Shipping and COSCO Shipping Energy, while also suggesting to monitor Haitong Development and Pacific Shipping [5]. - The report emphasizes the potential for significant upward revisions in global oil shipping profitability forecasts and reset costs, with current charter rates around $50,000 per day expected to rise [5][6]. Summary by Sections Shipping Market Overview - VLCC rates stabilized at high levels around $80,000 per day, despite an 8% week-on-week decline to $78,862 per day. The overall market remains calm, with charterers attempting to suppress rates through private deals [5][6]. - The report notes a 5% week-on-week decline in Suezmax rates to $65,724 per day, while Aframax rates increased by 14% to $56,567 per day, indicating mixed market conditions [5][6]. Air Transportation - The report highlights unprecedented challenges in the aircraft manufacturing supply chain, with an aging global fleet expected to constrain supply over the next 5-10 years. This situation is anticipated to lead to significant improvements in airline profitability as demand for international flights increases [5][6]. Express Delivery - The express delivery sector is entering a new phase of competition, with three potential scenarios outlined: price stabilization leading to profit recovery, continued competitive pressure in certain regions, and potential for higher-level mergers and acquisitions [5][6]. Rail and Road Transportation - Rail freight volume and highway truck traffic are showing resilience, with national railway freight reaching 80.32 million tons, a 2.33% week-on-week increase, and highway truck traffic increasing by 24.72% [5][6]. High Dividend Stocks in Transportation - The report lists high dividend stocks in the transportation sector, including Bohai Ferry with a dividend yield of 8.09% and Zhonggu Logistics at 10.88%, indicating strong potential for income generation [5][6].

Group 1: Report Industry Investment Rating - No industry investment rating is provided in the report. Group 2: Core Views of the Report - Market liquidity continues to improve, but attention should be paid to the selling pressure brought by concentrated share unlocks. The market was volatile this week, with the first three days in adjustment and the last two days in rebound. The data center and environmental protection water sectors led the gains, while the consumption and affordable housing sectors led the losses. The market trading activity is increasing during the third - quarter report window period, but the unlocking pressure of strategic allocation shares of REITs needs attention. On October 29, 46% of the shares of Huatai Baowan Logistics REIT will be unlocked (about 603 million yuan), and about 7.5 billion yuan of shares are expected to be unlocked in November [3]. - As of October 24, 2025, 18 new public REITs have been successfully issued this year, with a total issuance scale of 36.34 billion yuan, a year - on - year decrease of 24.2%. Two new public REITs achieved new progress this week. The CSI REITs Total Return Index closed at 1045.13 points, up 0.16% this week, underperforming the CSI 300 by 3.08 percentage points and the CSI Dividend by 0.89 percentage points [4]. Group 3: Summary by Directory 1. Primary Market: Two Newly Issued Public REITs Achieved New Progress - This year, 18 public REITs have been successfully issued, with a total issuance scale of 36.34 billion yuan, a year - on - year decrease of 24.2%. Two newly issued public REITs, CITIC Construction Investment Shenyang International Software Park REIT and China Asset Management China Overseas Commercial REIT, have been established. There are currently 10 newly issued REITs under application, 3 have been questioned and responded, 3 have passed the review, and 3 have been registered and are waiting for listing. For the expansion, 5 have been applied, 3 have been questioned and responded, and 2 have passed the review [4][15]. 2. Secondary Market: Liquidity Continued to Improve This Week 2.1 Market Review: The CSI REITs Total Return Index Fell 0.16% - The CSI REITs Total Return Index closed at 1045.13 points, up 0.16% this week, underperforming the CSI 300 by 3.08 percentage points and the CSI Dividend by 0.89 percentage points. Year - to - date, it has risen 7.98%, underperforming the CSI 300 by 10.46 percentage points and outperforming the CSI Dividend by 6.66 percentage points. This week, equity - based REITs fell 0.13%, while concession - based REITs rose 0.46%. In terms of asset types, the data center, environmental protection water, transportation, and warehousing logistics sectors performed well [4]. 2.2 Liquidity: Both Turnover Rate and Trading Volume Increased - The average daily turnover rates of equity - based and concession - based REITs this week were 0.53% and 0.47% respectively, an increase of 13.70BP and 11.36BP compared to last week. The trading volumes were 496 million and 134 million shares respectively, a week - on - week increase of 35.73% and 31.88%. The data center sector was the most active [4][24]. 2.3 Valuation: The Affordable Housing Sector Had a Higher Valuation - The ChinaBond valuation yields of equity - based and concession - based REITs were 3.93% and 4.07% respectively. The warehousing logistics, transportation, and park sectors ranked among the top in terms of valuation [4][29]. 3. This Week's News and Important Announcements News - On October 22, Shenghao Group launched the issuance of communication tower infrastructure public REITs, and companies such as China Merchants Fund conducted in - depth discussions. On October 23, Guangzhou supported the issuance of REITs in the consumption and cultural tourism fields; Qingcheng Mountain - Dujiangyan Scenic Area REITs launched the selection of asset evaluation institutions; Zhoushan International Aquatic City's public REITs project passed the review; Hunan Province solicited opinions on promoting the issuance of REITs for urban renewal projects [32]. Announcements - Multiple REITs released operation data and share unlock announcements. For example, China Merchants Expressway REIT's daily average toll - paying traffic volume in September 2025 was 16,000 vehicles, with a year - on - year increase of 3.5% and a month - on - month decrease of 7.2%. Huatai Baowan Logistics REIT's 138 million strategic allocation shares will be unlocked on October 29 [32].

Investment Rating - The report maintains a "Buy" rating for the company [2] Core Views - The company reported a total revenue of 11.6 billion yuan for the first nine months of 2025, a year-on-year increase of 59%, with a net profit attributable to the parent company of 9.1 billion yuan, up 51% year-on-year [7] - The third quarter of 2025 saw a total revenue of 4.73 billion yuan, representing a year-on-year increase of 101% and a quarter-on-quarter increase of 40% [7] - The report highlights a significant increase in trading activity and new fund issuance, benefiting the company's brokerage and fund distribution businesses [9] Financial Data and Profit Forecast - The company is projected to achieve revenues of 14.17 billion yuan in 2025, with a year-on-year growth rate of 22.12% [8] - The net profit attributable to the parent company is expected to reach 11.42 billion yuan in 2025, reflecting an 18.82% year-on-year increase [8] - The report indicates an upward revision of profit forecasts due to improved market conditions, with net profits projected at 11.42 billion yuan for 2025, 12.40 billion yuan for 2026, and 12.47 billion yuan for 2027 [9]

Investment Rating - The report maintains a "Buy" rating for the company [2] Core Insights - The company reported a strong performance in Q3 2025, achieving record high quarterly results driven by proprietary trading, with a revenue of 228 billion yuan, up 56% year-on-year and 49% quarter-on-quarter [5] - For the first nine months of 2025, the company achieved a revenue of 558 billion yuan, representing a 33% year-on-year increase, and a net profit of 232 billion yuan, up 38% year-on-year [5] - The report highlights a significant improvement in the company's return on equity (ROE), which reached 8.15%, an increase of 1.85 percentage points year-on-year [5] Financial Data and Earnings Forecast - The company is projected to achieve revenues of 84,603 million yuan in 2025, with a year-on-year growth rate of 32.63% [6] - The net profit attributable to the parent company is expected to be 31,330 million yuan in 2025, reflecting a year-on-year increase of 44.35% [6] - The earnings per share (EPS) is forecasted to be 2.07 yuan in 2025, with a price-to-earnings (P/E) ratio of 14.43 [6] Business Performance Breakdown - The brokerage segment generated 109.4 billion yuan in revenue, a 53% increase year-on-year, while investment banking and asset management also saw double-digit growth [7] - The company's total assets reached 2.03 trillion yuan by the end of Q3 2025, an 18% increase from the previous year, with client funds growing by 31% [7] - The investment income for Q3 2025 was 122 billion yuan, marking a 47% year-on-year increase [7] Market Position and Competitive Analysis - The company maintained a leading position in the refinancing and bond underwriting markets, with a market share of 22.9% and 13.8% respectively [7] - The report notes that the company's market share in margin financing reached 8.06%, an increase of 0.6 percentage points from the previous year [7] - The asset management segment saw significant growth, with the company's fund management arm, Huaxia Fund, achieving a net profit of 8.66 billion yuan, contributing 2.3 billion yuan to the company's profits [7] Investment Analysis Opinion - The report raises the profit forecast for the company, expecting net profits of 313 billion yuan, 338 billion yuan, and 374 billion yuan for 2025, 2026, and 2027 respectively, reflecting year-on-year growth rates of 44%, 8%, and 11% [7]

Report Title - Which Active Equity Funds are Suitable for Core Portfolio Allocation? - Weekly Insights on Financial Products 20251025 [1] Core Viewpoints - From the allocation needs of core funds, the report sets the characteristics that core funds should possess, aiming to provide basic excess returns, improve the holding experience, and effectively respond to the volatile market environment. It proposes three strategies to find suitable core funds: high win - rate relative to the equity - focused fund index, good holding experience, and wide distribution of the ability circle [3]. Summary by Sections Strategy 1: High Win - Rate Relative to the Equity - Focused Fund Index (Active & Quantitative) - **Difficulty of Outperforming the Index**: It is not easy for active equity funds to outperform the equity - focused fund index (885001) in the long term. Only 2 products (Huashang New Trend Optimization, Anxin Advantage Growth) have outperformed 885001 every year in the past 10 years. The proportion of products that outperform 885001 in different time intervals is shown in relevant tables [3][10][12]. - **Investment Style Analysis of Anxin Advantage Growth**: Since being managed by Nie Shilin, it has outperformed 885001 every year. The product has a balanced and flexible industry distribution, with a certain proportion of allocation in multiple major active equity sectors, and the industry distribution is flexibly adjusted. It has relatively concentrated holdings to obtain excess returns through concentrated stock selection [15]. - **Excess Return Analysis**: In terms of the relationship between annualized excess and annualized tracking error, for funds with a tracking error within 10%, 8 products have an annualized excess of over 10%; for those within 8%, 1 product has an annualized excess of over 8%. Only 63 products (2.69% of the total) can generate excess returns in both rising and falling environments of 885001 [20]. - **Selection of High - Win - Rate Funds**: 20 active equity funds are selected based on positive cumulative excess returns in both rising and falling daily environments of 885001 in the past five years and ranked by information ratio. Some products have their current fund managers managing them for a full five - year period, and some products have high quarterly and annual win - rates [23]. - **Screening Framework and List**: The report screens high - win - rate active equity funds by calculating four indicators, setting time intervals, and eliminating certain types of funds. The final list includes more balanced funds like Bodao Shengyan and funds with greater elasticity like Huaxia Innovation Frontier [26][27] Strategy 2: Good Holding Experience (Low Volatility & High Sharpe Ratio) - **Characteristics of Funds with Good Holding Experience**: These funds are close to the efficient frontier (low volatility and outstanding long - term performance) and have a high number of record - high days. Some examples are given according to different quantile criteria [46]. - **Screening Process and Results**: The report screens funds by calculating two indicators, eliminating certain types of funds, and finally selects 30 funds with better comprehensive capabilities. Representative products selected over the past three years and two years are also provided [48] Strategy 3: Wide Distribution of the Ability Circle (Individual Ability vs. Platform System) - **Requirement of the Ability Circle**: To effectively respond to the volatile market environment, fund managers need a wide ability circle, with both the ability to allocate in multiple tracks and the ability to select stocks deeply within tracks [3] - **Analysis of Fund Managers' Investment Styles**: The investment styles of several fund managers such as Zhou Yun, Hu Song, Chen Wen, Qiao Qian, and Zhang Jiansheng are analyzed, including their investment concepts, stock - selection methods, and portfolio adjustment strategies [30]