Core Viewpoint - The article discusses the current market volatility and suggests that instead of chasing rapidly changing investment trends, investors should consider index-enhanced funds as a pragmatic strategy to achieve returns that exceed market averages [2]. Group 1: Index-Enhanced Funds - Index-enhanced funds are designed to actively manage investments while passively tracking an index, aiming to achieve both beta returns from the index and alpha returns through enhancement strategies [3]. - When selecting index-enhanced funds, it is crucial to evaluate their historical net asset value performance since inception, as past performance can provide insights into potential future returns [5]. - The article emphasizes the importance of understanding the enhancement strategy before making a selection, as any strategy may experience periods of underperformance [7]. Group 2: Performance Metrics - The example of the Zhongtai CSI 300 Index Enhanced Fund illustrates that since its inception on April 1, 2020, the A share's net asset value growth rate reached 69.63%, significantly outperforming the benchmark growth rate of 24.85% by 44.78% [5][9]. - The fund consistently generated excess returns relative to its benchmark across all complete half-year periods since its establishment, indicating stable performance in various market conditions [5]. - The article suggests that a fund's ability to generate consistent small victories over time is more valuable than sporadic outstanding performance in a single year [5].

Core Insights - The demand for precise and efficient investment tools is increasing among investors, driven by the high-quality development of public funds and profound market changes [1][2] - Enhanced index funds (指增基金) are rapidly growing, with fundraising expected to exceed 100 billion yuan by 2025, surpassing the total of the previous three years [1][3] Group 1: Growth and Popularity - Enhanced index funds are shedding their "niche" label and becoming mainstream investment options for investors [2] - By the end of 2025, the number of enhanced index funds reached 476, with total fundraising of 100.45 billion yuan, including 186 newly established funds in 2025 [3] - As of January 31, 2026, 10 new enhanced index funds have been launched, exceeding the same period in 2025 [3] Group 2: Competitive Advantages - Enhanced index funds combine passive and active investment strategies, aiming for stable excess returns while closely following market trends [3][4] - Over 80% of enhanced index funds achieved annual excess returns, with an average net value growth rate of 32.44% and an average excess return rate of 5.39% by the end of 2025 [4] - The flexibility in product development and operation of enhanced index funds allows smaller institutions to fill significant gaps in index product lines [4] Group 3: Challenges and Solutions - Despite rapid growth, enhanced index funds face challenges in maintaining stable excess returns, which is a common concern in the industry [6][7] - The complexity of quantitative strategies and performance attribution makes it difficult for ordinary investors to understand enhanced index funds quickly [7] - High management costs compared to ETFs may hinder competitive advantages in fee structures [7] Group 4: Future Prospects - Enhanced index funds are continuously upgrading through product innovation, model iteration, team collaboration, and ecosystem building [8] - The recent release of guidelines for performance benchmarks aligns with the systematic enhancement strategies of enhanced index funds, highlighting their value [9] - Future developments will focus on product innovation, strategy optimization, and expanding scenarios to cater to institutional investors and retail education [10]

Core Viewpoint - The domestic quantitative trading market in China is expected to reach a historical high of over 2 trillion yuan by 2025, despite regulatory constraints on frequency [2][3]. Group 1: Market Size and Growth - The domestic quantitative private equity management scale is projected to exceed 1.5 trillion yuan in 2025, with public funds managing over 400 billion yuan in quantitative assets, leading to a total market size surpassing 2 trillion yuan [2]. - Compared to the same period in 2024, the total scale of quantitative management is conservatively estimated to increase by 700 billion yuan, driven by significant returns of at least 50% for existing clients [2][3]. - By the end of Q3 2025, the public quantitative scale is expected to exceed 400 billion yuan, and the private quantitative management scale is around 1.49 trillion yuan, indicating a robust growth trajectory [3]. Group 2: Industry Trends and Strategies - The rapid growth of quantitative private equity is attributed to increased market efficiency, demand for stable returns, and the performance of quantitative strategies in volatile markets [3][4]. - Industry players are implementing measures to control scale, such as limiting fundraising and increasing investment thresholds, to balance strategy effectiveness and growth [4][5]. - The industry is anticipated to transition from "scale expansion" to "scale management" in 2026, focusing on strategy diversification to achieve sustainable excess returns [5]. Group 3: Performance and Returns - In 2025, the average return of nearly a thousand index-enhanced strategy products reached 45.08%, with an average excess return of 16.75%, showcasing strong alpha generation capabilities [6]. - The performance of small-cap index-enhanced products, particularly the CSI 1000 index, was notably strong, with average returns of 49.78% and a high percentage of positive excess return products [6][7]. - The high turnover rate and daily trading volume in the A-share market in 2025 are favorable for the performance of quantitative strategies [6]. Group 4: Investor Behavior and Risk Management - Despite proactive scale control by institutions, there is concern over investors' aggressive capital allocation due to high returns from quantitative strategies [6][8]. - Investment professionals emphasize the importance of guiding clients to understand the relationship between returns and risks, advocating for a long-term investment perspective [8]. - Recommendations include implementing mechanisms to reduce short-term redemption impacts and focusing on risk control to avoid excessive pursuit of short-term performance [8].

Core Viewpoint - The article emphasizes the "return of active equity" since mid-2025, highlighting that active equity funds have significantly outperformed the broad market indices, with a return of 33.19% compared to the 17.66% of the CSI 300 index in the previous year. Active equity funds continue to outperform in 2026, raising questions about their ability to create value in a high-quality development phase of the asset management industry [1]. Group 1: Event Highlights - The event titled "Return of Active Equity" featured top fund managers and investment directors, focusing on practical insights rather than lengthy discussions [3]. - The agenda included discussions on building teams for excess returns, the significance of growth in the A-share market, and a special session with foreign fund managers discussing growth versus value [3][5]. Group 2: Insights from Fund Managers - Wang Qisen, Vice President and Chief Investment Officer of Huashan Fund, discussed the characteristics of successful fund managers, emphasizing internal training and the emergence of new talent over time [5]. - The article highlights the long-term performance of Cao Jin from Fortune Fund, who has consistently managed the small-cap fund since 2015, showcasing his ability to adapt to market trends and maintain low volatility [11][12]. Group 3: Foreign Fund Manager Perspectives - The roundtable featured managers from Allianz, Morgan Asset Management, and Schroders, discussing diverse investment opportunities and the effectiveness of active management in the Chinese market [16][17]. - Both Allianz and Schroders have recently launched active equity products that have shown over 50% performance growth in their first year, demonstrating the potential of foreign funds in A-shares [17][18].

Report Summary 1. Investment Ratings No investment ratings for the industry are provided in the report. 2. Core Viewpoints The report presents several ETF strategy indices constructed with the help of ETFs, which can convert quantitative models or subjective views into practical investment strategies. The performance and positions of these indices are tracked on a weekly basis [12]. 3. Summary by Directory 1. ETF Strategy Index Tracking - **ETF Strategy Index Last Week's Performance**: - **Huabao Research Size Rotation ETF Strategy Index**: Last week's index return was 7.47%, the benchmark was CSI 800 with a return of 4.18%, and the excess return was 3.30% [13]. - **Huabao Research SmartBeta Enhanced ETF Strategy Index**: Last week's index return was 1.97%, the benchmark was CSI 800 with a return of 4.18%, and the excess return was -2.21% [13]. - **Huabao Research Quantitative Fire - Wheel ETF Strategy Index**: Last week's index return was 3.81%, the benchmark was CSI 800 with a return of 4.18%, and the excess return was -0.36% [13]. - **Huabao Research Quantitative Balance Art ETF Strategy Index**: Last week's index return was 1.73%, the benchmark was SSE 300 with a return of 2.79%, and the excess return was -1.06% [13]. - **Huabao Research Hot - Spot Tracking ETF Strategy Index**: Last week's index return was 6.24%, the benchmark was CSI All - Share with a return of 5.04%, and the excess return was 1.20% [13]. - **Huabao Research Bond ETF Duration Strategy Index**: Last week's index return was -0.12%, the benchmark was ChinaBond Aggregate Index with a return of -0.23%, and the excess return was 0.11% [13]. 1.1 Huabao Research Size Rotation ETF Strategy Index - **Strategy Principle**: It uses multi - dimensional technical indicator factors and a machine - learning model to predict the return difference between the Shenwan Large - Cap Index and the Shenwan Small - Cap Index. The model outputs signals weekly to predict the strength of the index in the next week and determines positions accordingly to obtain excess returns relative to the market [14]. - **Performance**: As of January 9, 2026, the excess return since 2024 was 25.26%, the excess return in the recent month was 2.56%, and the excess return in the recent week was 3.30% [14]. - **Positions**: As of January 9, 2026, it held 50% of CSI 500ETF (code: 159922.SZ) and 50% of CSI 1000ETF (code: 512100.SH) [18]. 1.2 Huabao Research SmartBeta Enhanced ETF Strategy Index - **Strategy Principle**: It uses price - volume indicators to time self - built Barra factors and maps timing signals to ETFs based on the exposure of ETFs to 9 major Barra factors to obtain returns exceeding the market. The selected ETFs cover mainstream broad - based index ETFs and some style and strategy ETFs [18]. - **Performance**: As of January 9, 2026, the excess return since 2024 was 18.76%, the excess return in the recent month was -3.73%, and the excess return in the recent week was -2.21% [18]. - **Positions**: As of January 9, 2026, it held 25.21% of High - Dividend ETF (code: 159207.SZ), 25.13% of Shenzhen Dividend ETF (code: 159905.SZ), 24.98% of Free Cash Flow ETF800 (code: 563580.SH), and 24.68% of Dividend Low - Volatility 100ETF (code: 515100.SH) [21]. 1.3 Huabao Research Quantitative Fire - Wheel ETF Strategy Index - **Strategy Principle**: It starts from a multi - factor perspective, including the grasp of medium - and long - term fundamental dimensions, the tracking of short - term market trends, and the analysis of the behaviors of various market participants. It uses valuation and crowding signals to prompt industry risks and multi - dimensionally digs out potential sectors to obtain excess returns relative to the market [21]. - **Performance**: As of January 9, 2026, the excess return since 2024 was 39.31%, the excess return in the recent month was 2.75%, and the excess return in the recent week was -0.36% [21]. 1.4 Huabao Research Quantitative Balance Art ETF Strategy Index - **Strategy Principle**: It uses a multi - factor system including economic fundamentals, liquidity, technical aspects, and investor behavior factors to build a quantitative timing system for trend judgment of the equity market. It establishes a prediction model for the market's large - and small - cap styles to adjust the position distribution of the equity market and comprehensively obtains excess returns relative to the market through timing and rotation [25]. - **Performance**: As of January 9, 2026, the excess return since 2024 was -12.27%, the excess return in the recent month was -1.07%, and the excess return in the recent week was -1.06% [25]. - **Positions**: As of January 9, 2026, it held 20.50% of Non - Ferrous Metals ETF (code: 512400.SH), 20.11% of Chemical ETF (code: 159870.SZ), 20.06% of Securities and Insurance ETF E Fund (code: 512070.SH), 19.88% of Steel ETF (code: 515210.SH), and 19.46% of Oil and Gas ETF (code: 159697.SZ) [26]. 1.5 Huabao Research Hot - Spot Tracking ETF Strategy Index - **Strategy Principle**: It tracks and mines hot - spot index target products in a timely manner based on strategies such as market sentiment analysis, industry major event tracking, investor sentiment and professional opinions, policy and regulatory changes, and historical deduction. It constructs an ETF portfolio that can capture market hot - spots in a timely manner, providing investors with references for short - term market trends and helping them make more informed investment decisions [28]. - **Performance**: As of January 9, 2026, the excess return in the recent month was 1.08%, and the excess return in the recent week was 1.20% [30]. - **Positions**: As of January 9, 2026, it held 40.04% of Non - Ferrous Metals 50ETF (code: 159652.SZ), 22.32% of Hong Kong Stock Dividend ETF Bosera (code: 513690.SH), 19.90% of Hong Kong Stock Connect Pharmaceutical E Fund ETF (code: 513200.SH), and 17.74% of Short - Term Financing ETF (code: 511360.SH) [31]. 1.6 Huabao Research Bond ETF Duration Strategy Index - **Strategy Principle**: It uses bond market liquidity indicators and price - volume indicators to screen effective timing factors and predicts bond yields through machine - learning methods. When the expected yield is lower than a certain threshold, it reduces the long - duration positions in the bond investment portfolio to improve the long - term return and drawdown control ability of the portfolio [31]. - **Performance**: As of January 9, 2026, the excess return in the recent month was 0.15%, and the excess return in the recent week was 0.11% [32]. - **Positions**: As of January 9, 2026, it held 50.00% of 10 - Year Treasury Bond ETF (code: 511260.SH), 25.00% of Treasury Bond ETF 5 - 10 Years (code: 511020.SH), and 25.00% of Policy Financial Bond ETF (code: 511520.SH) [34].

Core Insights - In 2025, the FOF (Fund of Funds) market saw improved performance, with median returns for top-performing products reaching 12.89% and an arithmetic average of 11.83% [1] - A significant disparity in returns was noted, with five FOF products achieving total returns exceeding 50% during the year [1] - The standout performer was Guotai Optimal Navigation One-Year Holding, which led with an annual return of 66.14% [1] Performance Analysis - Several FOF products, including E Fund Advantage Return A and Guotai Industry Rotation A, also reported annual returns above 50%, indicating strong performance in equity markets [1] - High-performing FOFs demonstrated a clear thematic focus in their investment strategies rather than a uniform approach [1] Investment Strategies - Certain FOFs concentrated on distinctive index funds to amplify the market elasticity of specific assets, benefiting from strong trends in precious metals [2] - Others, like E Fund Advantage Return, focused on actively managed equity funds, particularly in technology sectors, showcasing a strategy to achieve excess returns through active management [2] Market Context - The overall recovery in FOF performance in 2025 was closely linked to improvements in the equity market environment, with a stabilization and rebound in large-cap equities supporting the net asset value of underlying FOF assets [2] - The clear structural trends in the market allowed FOFs to effectively leverage their asset allocation flexibility, resulting in notable returns for some products [2]

Core Viewpoint - The champion fund, Huaxia North Exchange Innovation, has achieved over 30% excess returns compared to the fund industry benchmark for three consecutive years, defying the "champion curse" narrative [2][3]. Group 1: Fund Performance - As of December 31, 2025, Huaxia North Exchange Innovation has a total return of 138.42% since its inception at the end of 2021, with an excess return of 139.25% compared to its benchmark [13]. - The fund's performance in 2025 was 77.38%, significantly outperforming the North Exchange 50 Index, which saw a notable increase in market activity, with the index reaching historical highs [14][13]. - Huaxia Fund's active equity products have seen multiple funds achieving over 100% excess returns, with nine funds exceeding 30% excess returns compared to their benchmarks over the past two years [5]. Group 2: Investment Strategy and Management - The success of Huaxia North Exchange Innovation is attributed to a mature system based on customer experience and a long-term investment strategy focused on sustainable excess returns [4][3]. - Fund manager Gu Xinfeng emphasizes the importance of identifying mispriced opportunities in the market, particularly during periods of significant volatility [15]. - Huaxia Fund has established a robust research platform that supports various asset classes, ensuring a comprehensive investment decision-making process [43][44]. Group 3: Innovation and Product Development - Huaxia Fund has been proactive in launching innovative products, such as the "Red Rocket" index investment service platform and the "LetfGo" investment experience evaluation model, aimed at enhancing investor engagement [8][42]. - The firm has a history of early product launches in emerging sectors, such as technology and AI, positioning itself advantageously in the market [21][39]. - The introduction of specialized products, like the "all-weather strategy" accounts, reflects Huaxia Fund's commitment to meeting diverse investor needs [46][47]. Group 4: Market Trends and Future Outlook - The North Exchange has experienced significant growth, with the index rising 38.8% in 2025, marking it as the best-performing year since its inception [14]. - Huaxia Fund's strategic focus on sectors like AI, semiconductors, and biotechnology has attracted substantial capital inflows during industry upswings [39][40]. - The firm continues to adapt to market changes, ensuring that its investment strategies remain relevant and effective in delivering consistent returns [48].

Core Insights - The first batch of floating rate funds has shown significant performance differences, with some funds focused on AI achieving over 70% returns, while others targeting consumer and healthcare sectors performed poorly [1][2]. Group 1: Fund Performance - As of December 27, the top-performing fund, Huashang Zhiyuan, achieved a return of approximately 71.75%, followed by Xinao Advantage Industry at 54.44%, with several other funds exceeding 40% returns [2]. - A total of 26 floating rate funds were launched, with 10 funds outperforming their benchmarks, representing less than 40% of the total [4]. Group 2: Investment Strategy - Fund managers are under pressure to balance between seeking excess returns and adhering closely to benchmark indices, which requires enhanced asset pricing and industry rotation judgment capabilities [6]. - The floating rate mechanism encourages fund managers to focus not only on absolute returns but also on the controllability of excess returns and drawdowns [7]. Group 3: Market Trends - The AI sector remains a core focus for many top-performing funds, with significant investments in leading AI stocks contributing to their success [3]. - The overall market, represented by the CSI 300 index, saw a rise of approximately 18.32% in the second half of the year, positively impacting the net asset values of these funds [4].

Core Viewpoint - The article discusses the performance and future trends of quantitative investment strategies in 2025, highlighting the coexistence of differentiation and opportunities within the public quantitative fund industry [2][4][5]. Group 1: Differentiation in Quantitative Investment - The public quantitative industry in 2025 is characterized by product differentiation, with a wider variety of quantitative products available compared to previous years, including strategies covering 500, 1000, and 2000 indices [4]. - Alpha differentiation has expanded, with significant variations in excess returns among different models on the same platform, indicating a rare occurrence of divergence within the industry [4]. - There is a notable performance gap between public and private quantitative funds, with public funds being more conservative due to compliance constraints, while private funds have shown better performance in small-cap stocks [4]. Group 2: Opportunities in Quantitative Investment - 2025 is seen as a significant year for quantitative investment, with active market participation and substantial individual stock differentiation creating a favorable environment for excess returns [5]. - The year marks the implementation of high-quality development policies in public funds, promoting "constrained active management" as a mainstream approach, which opens new opportunities for quantitative methods across various investment processes [5]. - Quantitative investment is increasingly recognized as a valuable methodology for predicting returns, managing risks, optimizing portfolios, and executing trades, leading to broader application across the asset management industry [5]. Group 3: Trends and Future Outlook - The future of public quantitative investment is expected to be expansive, with an increasing number of listed companies and improved liquidity, providing ample opportunities for differentiation in quantitative strategies [10]. - The integration of AI into public quantitative investment is anticipated to enhance investment methodologies, emphasizing the need for precision and detail in research and development [10]. - The focus for 2026 will be on strengthening the alpha generation capabilities while ensuring robust risk management to maintain investor confidence during market volatility [11].

Core Insights - The article emphasizes the importance of selecting the right index-enhanced funds, focusing on the dual benefits of "Beta base + Alpha excess" returns [3] - The stability and sustainability of excess returns are highlighted as the only hard standard for evaluating these funds [4] Performance Analysis - The China Securities 1000 Index Enhanced Fund has shown the strongest excess performance over the past three years [5] - The Guotai Haitong China Securities 1000 Index Enhanced A fund achieved a return of 57.67% over three years, significantly outperforming its benchmark of 14.46%, resulting in an excess return of over 43% [6] - The招商中证1000指数增强A fund recorded a three-year return of 40.39%, exceeding its benchmark by over 25%, and a five-year return of 58.75%, which is more than five times its benchmark of 11.73% [6] Fund Management Capabilities - The article outlines that the excess returns from quality index-enhanced funds are not due to luck but stem from the fund company's research and investment capabilities [7] - A comprehensive product line that covers various market segments is essential, avoiding reliance on a single sector [7] - The ability to customize strategies based on the characteristics of the index is crucial for identifying investment opportunities [7] - A strong research team with expertise in financial engineering, risk management, and information technology is necessary to adapt strategies dynamically [7]