Core Viewpoint - The report from CITIC Securities indicates a weak performance in A-shares in March, with a divergence in Hong Kong stocks, a decline in US stocks, a rise in gold, and a pullback in the bond market. It suggests that the current economic environment is characterized by a Kondratiev wave downturn, impacting various asset classes [1][2]. Global Macro Outlook - The report predicts that the peak year-on-year GDP for the US will be in Q1 2025, for Japan in Q2 2025, and for the Eurozone also in Q2 2025. It anticipates a temporary improvement in the yen's performance against the dollar and a strengthening of the euro against the dollar in the future. Additionally, it forecasts that gold priced in dollars will continue to strengthen [1][3]. Asset Price and Fundamental Outlook - According to analyst expectations, the forecasted ROE for the entire A-share market and non-financial A-shares in Q1 2025 is 7.38% and 6.42%, respectively, with slight adjustments from the previous month. The intrinsic value estimate for the CSI All A Index in Q2 2025 is projected to be 5,343 points. The report also notes that the ten-year Chinese government bond yield is deviating from historical cyclical patterns [3]. Industry and Style Rotation - The report identifies high economic sentiment in industries such as agriculture, non-ferrous metals, telecommunications, transportation, and non-bank financials. Currently, institutional focus is on non-bank financials and transportation, while interest in light manufacturing, automotive, consumer services, and comprehensive industries has decreased. Recent increases in institutional attention have been noted in the "petroleum and petrochemicals," "non-ferrous metals," "steel," "consumer services," and "real estate" sectors. The machinery sector is approaching a crowded indicator threshold, while the machinery, automotive, and food and beverage sectors are in a sustained crowded state [4].

Core Viewpoint - The article emphasizes the importance of a diversified asset allocation strategy, highlighting the performance of various asset classes, particularly gold and equities, in the current market environment [2][3][4]. Group 1: Asset Performance - COMEX gold ranked second in 2024 with a return of 27.65%, closely trailing the Nasdaq index [2]. - The asset allocation strategy of fund manager Tang Jun has evolved, with gold being a significant holding, peaking at nearly 18% mid-2024, but later decreasing to 13.71% by the end of Q4 2024 [3][4]. Group 2: Investment Philosophy - Tang Jun's investment approach is characterized by a "top-down" strategy that emphasizes low correlation among underlying assets, distinguishing it from traditional FOF managers [8][10]. - He focuses on the concept of "return streams," which involves optimizing risk and enhancing portfolio performance by reducing correlation among assets [10][65]. Group 3: Macro and Micro Analysis - The macroeconomic factors influencing asset allocation include monetary policy and credit expansion, which have become more significant than traditional economic cycles [44][46]. - Tang Jun's framework for asset allocation is structured into three levels: macroeconomic drivers, expectation differences, and low-correlation return streams [106]. Group 4: Tactical Adjustments - Tactical adjustments in asset allocation are made based on market conditions, with a focus on maintaining a disciplined approach to risk management [51][88]. - The strategy includes a dynamic adjustment of asset weights based on macroeconomic indicators and market sentiment, such as the performance of small-cap stocks and the behavior of retail investors [37][39]. Group 5: Future Outlook - The outlook for 2025 suggests that domestic asset allocation will depend on credit expansion, while international considerations will focus on U.S. fiscal policies and their impact on inflation and risk assets [101][103].