Sou Hu Cai Jing·2025-04-18 04:17Core Viewpoint - The stability of cash flow, rather than the scale of assets, is crucial for quality of life and investment success, especially in uncertain market conditions [1] Group 1: Cash Flow Index ETFs - A new batch of cash flow index ETFs has emerged, focusing on companies that generate real cash flow, serving as a strategy to navigate market volatility [1] - The China Securities Cash Flow Total Return Index has achieved a remarkable annual return of 40% in a turbulent market [2] Group 2: Investment Strategies - The free cash flow strategy is based on three winning logic points: 1. It focuses on real profitability by looking beyond financial statements, as free cash flow is based on actual cash inflows and outflows [4] 2. It combines high dividend yields with growth potential, providing a dual revenue engine [5] 3. It employs a dynamic rebalancing mechanism to capture undervalued stocks, allowing for timely adjustments to the index [9] Group 3: Performance Metrics - The index demonstrated resilience during bear markets, with a mere 2.76% decline in 2022 when the CSI 300 fell by 21.6% [6] - In bull markets, it outperformed with a 40.94% increase in 2024, achieving an excess return of 27 percentage points [6] - Since its inception in 2013, the index has accumulated a total return of 587.53% [6] Group 4: Index Composition - The index employs a "barbell strategy," including both cash-rich cyclical leaders like coal and petrochemicals, and high ROE growth sectors such as home appliances and automobiles [7] - The top ten constituent stocks, including China Shenhua and Midea Group, account for over 60% of the index, providing stable dividends while retaining growth potential [7] Group 5: Future Outlook - The market is expected to reassess value anchors, with state-owned enterprises facing value re-evaluation as cash flow assets become essential for risk-averse investments [9] - The upcoming issuance of the China Securities Cash Flow ETF may capture more certainty in the era of cash being king [9]