Report Information - Report Title: Weekly Report on Capital Flows of Exchange-Traded Index Funds [1] - Data Date: August 18 - 22, 2025 [1] - Analyst: Jin Ling [1] - Report Date: August 28, 2025 [1] Core Findings Domestic Passive Equity Funds - Different index funds showed varying performance in terms of fund size, weekly returns, and net weekly capital inflows. For example, the Shanghai - Shenzhen 300 index fund had a size of 983.449 billion yuan, a weekly return of 4.27%, and a net weekly capital outflow of 34.74 billion yuan; while the ChiNext Index fund had a size of 126.448 billion yuan, a weekly return of 5.81%, and a net weekly capital inflow of 22.61 billion yuan [4]. Overseas Index Funds - International index funds also had diverse performance. The Nasdaq 100 index fund had a size of 78.421 billion yuan, a weekly return of -3.08%, and a net weekly capital inflow of 7.78 billion yuan; the S&P 500 index fund had a size of 20.837 billion yuan, a weekly return of -1.63%, and a net weekly capital outflow of 1.44 billion yuan [5]. Bond Funds - Bond funds had different performance based on factors such as maturity and credit rating. The 30 - year bond fund had a size of 8.969 billion yuan, a weekly return of -1.25%, and a net weekly capital inflow of 59.60 billion yuan; the short - term financing bond fund had a size of 29.341 billion yuan, a weekly return of 0.01%, and a net weekly capital outflow of 28.50 billion yuan [6]. Commodity Funds - Commodity funds, including gold, soybean meal, and others, also had distinct performance. The gold fund had a size of 70.887 billion yuan, a weekly return of -0.29%, and a net weekly capital outflow of 0.94 billion yuan; the energy and chemical fund had a size of 2.93 billion yuan, a weekly return of 0.76%, and a net weekly capital inflow of 0.88 billion yuan [6]. Index - Enhanced Funds - Index - enhanced funds based on different indices had different performance. The CSI 500 index - enhanced fund had a size of 1.978 billion yuan, a weekly return of 3.76%, and a net weekly capital inflow of 0.12 billion yuan; the ChiNext Index - enhanced fund had a size of 0.469 billion yuan, a weekly return of 5.46%, and a net weekly capital outflow of 0.04 billion yuan [6].

Group 1 - The Hong Kong stock market opened lower on August 28, with mixed performance in tech stocks and active trading in gold stocks [1] - Meituan's Q2 revenue reached 91.84 billion yuan, a year-on-year increase of 11.7%, while adjusted net profit fell by 89% to 1.49 billion yuan [1] - Meituan's app monthly active users surpassed 500 million, and the average annual transaction frequency per user hit a historical high [1] Group 2 - The latest valuation of the Hang Seng Tech Index ETF (513180) is 22.3 times P/E, indicating it is currently undervalued compared to 74% of the time since its inception [2] - The Hang Seng Tech Index remains in a historically undervalued range, with potential upward momentum due to expectations of improved external liquidity and interest rate cuts by the Federal Reserve [2] - Investors without a Hong Kong Stock Connect account can access core Chinese AI assets through the Hang Seng Tech Index ETF (513180) [2]

1. Report Industry Investment Ratings No specific industry investment ratings are provided in the report. 2. Core Viewpoints - The A-share market is expected to enter a high-level oscillation phase, waiting for a direction decision. It is recommended to buy put options to protect long positions or partially take profits on previous positions [2]. - The bond market sentiment is expected to continue to stabilize, and it is advisable to lightly test long positions on bond futures during pullbacks [2]. - Gold is oscillating strongly, and it is recommended to buy gold options and construct a bull spread strategy. Silver long positions should be held above $38 [2]. - The container shipping index is weakly oscillating, and short positions on the October contract should be continued [2]. - For steel products, it is possible to try long positions as the apparent demand has stopped falling and rebounded. For iron ore, coking coal, coke, etc., it is recommended to go long at low prices [2]. - For non-ferrous metals, copper is expected to see inventory depletion near the peak season, and it is recommended to refer to the price range. For other non-ferrous metals, different trading strategies are given according to their respective fundamentals [2]. - In the energy and chemical sector, different trading strategies are provided for each variety based on their supply and demand, cost, and other factors [2]. - In the agricultural products sector, different trading strategies are recommended for each variety according to their market conditions [2]. - For special commodities, trading strategies such as taking partial profits on previous short positions and going short at high prices are proposed [2]. - In the new energy sector, it is recommended to wait and see for polysilicon and lithium carbonate [2]. 3. Summary by Relevant Catalogs Financial Sector - **Stock Index Futures**: A-share market is expected to enter high-level oscillation. It is recommended to buy put options to protect long positions or partially take profits on previous positions [2]. - **Bond Futures**: Bond market sentiment is expected to continue to stabilize. It is advisable to lightly test long positions on bond futures during pullbacks [2]. - **Precious Metals**: Gold is oscillating strongly. It is recommended to buy gold options and construct a bull spread strategy. Silver long positions should be held above $38 [2]. Commodity Sector - **Shipping Index**: The container shipping index is weakly oscillating, and short positions on the October contract should be continued [2]. - **Steel and Iron Ore**: For steel products, it is possible to try long positions as the apparent demand has stopped falling and rebounded. For iron ore, it is recommended to go long at low prices in the range of 770 - 820 [2]. - **Coking Coal and Coke**: Due to a sudden mine accident and partial coal mine shutdowns, coking coal futures are expected to rebound. It is recommended to go long at low prices. Coke is also recommended to go long at low prices as the coking profit continues to repair [2]. - **Non-Ferrous Metals**: Copper is expected to see inventory depletion near the peak season. Different trading strategies are given for other non-ferrous metals according to their fundamentals [2]. - **Energy and Chemicals**: Different trading strategies are provided for each variety based on their supply and demand, cost, and other factors, such as going long, shorting, or waiting and seeing [2]. - **Agricultural Products**: Different trading strategies are recommended for each variety according to their market conditions, such as going long, shorting, or waiting and seeing [2]. - **Special Commodities**: Trading strategies such as taking partial profits on previous short positions and going short at high prices are proposed [2]. - **New Energy**: It is recommended to wait and see for polysilicon and lithium carbonate [2].

Core Viewpoint - The article discusses the potential implications of former President Trump's actions against the Federal Reserve, suggesting that his attempts to undermine its independence could threaten the stability of the U.S. dollar and the broader financial system [1][5][10]. Group 1: Trump's Actions and Motivations - Trump has been pressuring the Federal Reserve, including the dismissal of board member Lisa Cook, to lower interest rates in an effort to stimulate the economy and reduce debt costs ahead of the midterm elections [1][4][10]. - The urgency behind Trump's actions is linked to rising inflation and unemployment in the U.S., as well as the significant national debt of $36 trillion, which incurs over $1 trillion in interest annually [4][10]. Group 2: Federal Reserve's Independence - The Federal Reserve was established in 1913 to prevent financial crises, designed to be an independent entity that balances power between the government and private banks [7][8]. - The independence of the Federal Reserve is crucial for maintaining confidence in the U.S. dollar and preventing inflation, as historical instances of political interference have led to severe economic consequences [9][11]. Group 3: Potential Consequences - Trump's actions could lead to a loss of confidence in the Federal Reserve, prompting global investors to sell off U.S. dollars and bonds, which could destabilize the financial system [10][12]. - The article warns that undermining the Federal Reserve's independence for personal political gain could have dire repercussions, as seen in past instances where political pressure led to rampant inflation [11][12].

Group 1 - The core viewpoint indicates that Powell hinted at a potential interest rate cut in September, leading to a significant rise in US stocks, with the Dow Jones reaching a new high and the Chinese concept index increasing by 2.73% [1] - Major technology stocks experienced a broad increase, with Baidu rising nearly 3%, JD.com and Alibaba up over 2%, and Tencent increasing by 1.42% [1] - Automotive stocks surged, highlighted by NIO's nearly 15% increase and Dongfeng Group's stock opening up over 69% due to its subsidiary Lantu Auto's introduction to the Hong Kong market [1] Group 2 - The Hong Kong stock market showed mixed results, with the Hang Seng Index rising by 0.62%, while sectors such as photovoltaic and steel performed well, contrasting with weaker performances in military and chip stocks [1] - Leveraged funds flowed into various ETFs, including government bond ETFs and technology-focused ETFs, indicating strong investor interest [1] - The performance of specific stocks varied, with Miniso rising over 9% and ZTE increasing nearly 4%, while restaurant stocks and Tesla-related stocks faced declines, exemplified by Dongfang Zhenxuan's nearly 3% drop [1]

Market Overview - The Hang Seng Index closed up 0.17% at 25,165.94 points, while the Hang Seng Tech Index fell 0.01% to 5,541.27 points, and the National Enterprises Index rose 0.08% to 9,013.27 points [1] - The index opened lower at 24,968.57 points, dropped initially, but rebounded in the afternoon to surpass 25,000 points, ultimately gaining 43.04 points with a total turnover exceeding 285.2 billion HKD [1] - There were 934 stocks that rose, 1,267 that fell, and 961 that remained unchanged by the end of the trading day [1] Sector Performance - The market showed mixed performance across sectors, with solar energy, Apple-related stocks, and new consumption concepts generally rising, while sectors like chips, gold, banking, and insurance experienced mixed results [1] - Coal, technology, and biomedicine sectors mostly saw declines [1] Notable Stocks - Individual stock movements included: - Dongfang Zhenxuan up 8.22% - Alibaba down 0.68% - Fuyao Glass up 15.19% - Xinte Energy up 2.30% - BeiGene down 3.05% - WuXi AppTec up 0.30% - Sunny Optical Technology up 9.74% - Heng Rui Pharmaceutical down 0.57% - Laopu Gold up 8.84% - SMIC up 3.40% - Shandong Gold up 0.98% - Xiaopeng Motors up 4.41% - Bank of China up 0.91% - China Reinsurance up 3.57% [1] Top Traded Stocks - The top three traded stocks were: - Pop Mart up 12.54% with a turnover exceeding 11.5 billion HKD - Tencent Holdings down 0.34% with a turnover exceeding 9.4 billion HKD - Xiaomi Group up 0.29% with a turnover exceeding 8.2 billion HKD [2]

Market Performance - A-shares continued strong performance with the Shanghai Composite Index reaching a ten-year high since August 2015, while the North Star 50 hit a historical peak. The Shenzhen Composite Index and ChiNext Index also surpassed their previous highs from October 2022. The Shanghai Composite Index rose by 0.85%, the Shenzhen Composite Index increased by 1.73%, and the ChiNext Index gained 2.84%. The total trading volume in the Shanghai and Shenzhen markets reached 27,642 billion, a significant increase of 5,196 billion compared to the previous trading day [1]. ETF Performance - The top-performing ETFs included rare earth and artificial intelligence-related funds, with the rare earth ETF from E Fund (159715) leading with a 6.31% increase, followed closely by another rare earth ETF (159713) at 6.22%. The ChiNext artificial intelligence ETF from Southern Fund (159382) rose by 5.87% [2][3]. Industry Insights - The global liquidity easing expectations have provided support for metal prices, with many metal varieties facing supply rigidity due to capital expenditures. The overall valuation remains low, indicating potential for price increases in the future. The non-ferrous metals sector, particularly rare earths, tungsten, cobalt, and antimony, is expected to see upward momentum due to improved supply-demand dynamics and policy support [3]. - The demand for rare earths is anticipated to improve further due to the development of emerging industries such as new energy and humanoid robots, leading to a more favorable supply-demand balance and long-term price increases [3]. Artificial Intelligence Sector - The AI sector is expected to continue its innovation trajectory in the second half of 2025, accelerating growth across the industry chain. Analysts recommend focusing on the "AI mainline" and see opportunities in AI applications and computing power sectors. The AI sector has not yet reached overheating levels, suggesting further expansion into more AI-related fields [4]. ETF Trading Activity - The Hong Kong Securities ETF (513090) recorded the highest trading volume at 33 billion. Other notable ETFs included the Short-term Bond ETF (211360) and Silver Hua Li ETF (211880) [7][8]. The turnover rate for the Sci-Tech Growth ETF (588070) was the highest at 337% [8]. New ETF Launches - A new AI-focused ETF from Huatai-PineBridge (589560) will begin fundraising, closely tracking the Shanghai Stock Exchange Sci-Tech Innovation Board AI Index, which includes 30 companies in the AI sector. This index emphasizes semiconductor companies and high R&D investment [9][10].

Group 1 - The Hong Kong stock market experienced a decline, with the Hang Seng Index turning negative after previously rising by 0.46% [1] - The Hang Seng Technology Index's gains narrowed to less than 1% [1] - Various sectors such as real estate, gold, coal, chips, and non-ferrous metals showed weakness [1] Group 2 - The Hang Seng Index closed at 25,256.63, down by 13.44 points or 0.05% [2] - The National Enterprises Index increased by 19.62 points, or 0.22%, closing at 9,058.71 [2] - The Hang Seng Technology Index rose by 54.52 points, or 0.98%, ending at 5,597.69 [2]

Group 1 - The core CPI in July showed a month-on-month increase of 0.4%, reversing a previous decline, while the year-on-year core CPI rose by 0.8%, marking the third consecutive month of growth [2][11][12] - The PPI decreased by 0.2% month-on-month, with a year-on-year decline of 3.6%, indicating a narrowing of the month-on-month decline compared to previous months [2][15][16] - The introduction of two consumer loan interest subsidy policies aims to stimulate domestic consumption by targeting both demand and supply sides [3][35][37] Group 2 - The domestic securities market showed a mixed performance, with the ChiNext Index experiencing the highest increase of 8.6% [4][39] - The communication sector led the industry gains with a rise of 7.7%, reflecting strong market interest in technology and innovation [4][41] - The overall GDP growth for the first half of the year was 5.39%, indicating resilience in the domestic economy [4] Group 3 - Investment recommendations focus on new productive forces, emphasizing sectors such as artificial intelligence, innovative pharmaceuticals, and robotics, which are expected to yield excess returns [5][47] - There is a strong emphasis on boosting consumer spending, particularly in new consumption areas, home appliances, and automobiles [5][47] - The report highlights the potential for stable returns from high-dividend assets and suggests a long-term investment opportunity in gold due to geopolitical tensions and economic uncertainties [5][47]

Market Performance - A-shares experienced a strong upward trend on the last trading day of the Year of the Tiger, with the Shanghai Composite Index reaching a new high in the current rebound, closing up 0.76% at 3264.81 points [1] - The total trading volume in the two markets was 749.1 billion yuan, an increase of approximately 62 billion yuan compared to the previous day [1] - Northbound funds continued to buy heavily, with a net purchase of over 9 billion yuan today, marking the 13th consecutive day of accumulation, totaling 48.5 billion yuan for the week, which is the second-highest weekly net purchase on record [1] Sector Performance - Cyclical sectors such as non-ferrous metals, coal, steel, oil, and electricity saw collective gains, with notable performances in rare earth and gold concepts, including stocks like China Rare Earth and Yintai Gold hitting the daily limit [2] - New energy sectors, including lithium mining, lithium batteries, energy storage, wind power, and photovoltaics, also performed strongly, with Rongjie shares rising over 8% and Sunshine Power increasing over 7%, bringing its latest market value to 190.9 billion yuan [2] - The telecommunications sector saw all three major operators rise significantly, with China Telecom hitting the daily limit and China Unicom increasing by about 7% [2] Hong Kong Market - The Hong Kong stock market saw a strong rally, with the Hang Seng Index rising nearly 2% to surpass 22,000 points, closing up 1.82% at 22044.65 points, marking a six-month high [2] - The Hang Seng Technology Index increased by 2.67% to 4568.79 points, with individual stocks like New Oriental Online rising over 10% to set a new historical high [2]