Ge Long Hui·2025-07-09 11:06Core Viewpoint - The banking sector is experiencing strong performance driven by high dividend yields and stable growth, attracting significant capital inflows, particularly into the Bank AH Preferred ETF and the CSI 2000 Enhanced ETF, which exhibit low drawdown characteristics [2][4][5]. Group 1: Performance Metrics - The Bank AH Preferred ETF (517900) has shown a return of 49.05% since July 1, 2024, with a maximum drawdown of -11.11% [2]. - The CSI 2000 Enhanced ETF (159552) has a higher return of 74.10% but a greater maximum drawdown of -19.03% [2]. - The Bank AH +2000 Enhanced combination has a return of 54.97% since last year, with a maximum drawdown of -13.89%, indicating lower volatility compared to the CSI 2000 Enhanced ETF [1]. Group 2: Dividend Yields and Attractiveness - The latest dividend yield for the Bank AH Index is 4.38%, with 39 banks averaging over 3% in dividend yield, and some smaller banks like Jiangsu Bank reaching 7.46% [5]. - The dividend levels are significantly higher than the 10-year government bond yield of 1.65%, making bank stocks attractive to long-term investors [5]. - Major banks are expected to distribute over 420 billion yuan in cash dividends in 2024, with Industrial and Commercial Bank of China leading with 109.7 billion yuan [5]. Group 3: Investment Trends and Strategies - Insurance capital has increased its holdings in bank stocks, with 12.1 billion shares added in Q1 2025, indicating a strong consensus among large funds to invest in the banking sector [5]. - The banking sector is transitioning from a "pro-cyclical" to a "weak-cyclical" nature, providing a safety margin due to low valuations and regulatory support for valuation recovery [6]. - The combination of high dividends and low valuations offers a defensive strategy against market volatility, particularly when small-cap stocks face trading congestion [6].