Zhi Tong Cai Jing·2025-10-15 13:41Core Viewpoint - Cathay Securities believes that rising geopolitical uncertainties may temporarily increase volatility in global equity markets, presenting opportunities for Chinese equity assets and gold. The recommendation for October is to increase holdings in A-shares, overweight gold, and maintain a standard allocation in bonds [1][2]. Asset Allocation Framework - The asset allocation framework consists of Strategic Asset Allocation (SAA), Tactical Asset Allocation (TAA), and Major Event Review Adjustments. SAA aims to diversify macro risks and set long-term allocation benchmarks, while TAA identifies short-term risk-return characteristics to adjust portfolio weights for improved returns. Major events are subjectively reviewed to correct and supplement quantitative results [2][3]. Equity Market Outlook - The recommendation for equity allocation in October is 41.25%, with overweight positions in A-shares (8.75%) and Hong Kong stocks (8.75%), standard allocation in U.S. stocks (15.00%), underweight in European stocks (2.75%), standard allocation in Japanese stocks (3.25%), and underweight in Indian stocks (2.75%). The outlook for Chinese A/H shares remains positive, with market adjustments viewed as buying opportunities [3][4]. Bond Market Outlook - The recommendation for bond allocation in October is 45%, with standard allocations in long-term government bonds (10.00%), short-term government bonds (12.50%), long-term U.S. Treasuries (10.00%), and short-term U.S. Treasuries (12.50%). The bond market is supported by imbalanced credit supply and demand, along with stable liquidity. The ongoing themes of "central bank bond purchases" and adjustments in redemption fees for bond funds will continue to play a role [4]. Commodity Market Outlook - The recommendation for commodity allocation in October is 13.75%, with an overweight position in gold (10%), underweight in oil (1.25%), and standard allocation in industrial commodities (2.5%). The gold market remains strong, having surpassed key resistance levels, supported by factors such as Federal Reserve rate cuts, geopolitical tensions, and continued purchases by the Chinese central bank [4].