1. Report Industry Investment Rating - The report does not provide a specific industry investment rating. 2. Core Viewpoints of the Report - The "resource products + military manufacturing" trend may continue, and the mid - cap growth style may be dominant in 2026 [2][75][76][82]. - The ETF market's rapid development momentum continues, with various asset varieties showing a "multi - point bloom" situation. The scale has successively exceeded 4 trillion, 5 trillion, and 6 trillion yuan [4]. - In 2026, the "mid - cap blue - chip" style is expected, and industry allocation should focus on the three main lines of "manufacturing, consumption, and cyclical" sectors [4]. 3. Summary According to Relevant Catalogs 3.1 ETF Market Overview - As of December 31, 2025, there were 1381 domestic ETF products, an increase of 350 compared to the end of 2024, with a cumulative scale of 6.03 trillion yuan, an increase of 2.18 trillion yuan compared to the end of 2024, and it successively exceeded the 4 - trillion, 5 - trillion, and 6 - trillion - yuan thresholds during the year [4][8]. 3.2 Dynamics of Various Asset - Class ETFs 3.2.1 A - share ETFs - As of December 31, 2025, there were 826 A - share ETFs, an increase of 27 from the previous month, with a total scale of 28381.44 billion yuan, a decrease of 943.82 billion yuan from the previous month. Currently, 7 products have a scale of over 100 billion yuan [10]. - The CSI A500 products have high capital activity, and satellite - related ETFs have top - performing results. Multiple A500 funds have high average daily trading volumes, and satellite - related ETFs have an average monthly increase of over 40% [13]. 3.2.2 Cross - border ETFs - As of December 31, 2025, there were 247 cross - border ETFs, an increase of 6 from the previous month, with a total scale of 9630.25 billion yuan, a decrease of 67.04 billion yuan from the previous month. Gold - related ETFs are relatively active, with some gold - stock ETFs having a nearly 8% increase in the past month [16][19]. 3.2.3 Bond ETFs - As of December 31, 2025, there were 53 bond ETFs, the same as the previous month, with a current total scale of 8290 billion yuan, a significant increase of 1117 billion yuan from the previous month. Short - term financing ETFs and benchmark treasury bond ETFs are actively traded, and convertible bond - related ETFs have top - performing results recently [22]. 3.2.4 Commodity ETFs - As of December 31, 2025, there were 17 commodity ETFs, the same as the previous month, with a current total scale of 2505 billion yuan, an increase of 90 billion yuan from the previous month. In addition to gold - related ETFs, the Dacheng Non - ferrous Metals ETF has a significant increase in price and volume, rising over 10% in the past month [27]. 3.3 Manager Landscape - The rankings of top managers remain basically stable. Huaxia Fund and E Fund still rank among the top two in non - monetary ETF management scale. In terms of broad - based ETFs, Huaxia Fund ranks first, with a management scale of 6423 billion yuan; in terms of industry ETFs, Huaxia Fund and E Fund rank first and second, with management scales of 2272 billion yuan and 2114 billion yuan respectively [33]. - The concentration of top managers has declined again. As of December 31, 2025, the scale concentration of the top 10 managers decreased by 0.2 percentage points from the previous month to 76.76% [4][36]. 3.4 Capital Flow Changes - In terms of major asset classes, bond and A - share ETFs have received significant capital allocation, while money - market products have been under - allocated. In December, the capital flowing into the ETF market totaled 286 billion yuan, with bond and A - share products having the largest inflows, totaling 216.9 billion yuan, and cross - border products also having an inflow of 70.7 billion yuan. There was an outflow of 7 billion yuan from money - market products [39]. - In terms of sub - sectors, capital has significantly increased the allocation of CSI A500, cross - border technology, science and technology innovation bonds, and gold products. Among A - share products, broad - based products have a large inflow of 102.7 billion yuan, mainly due to the 98 - billion - yuan inflow of CSI A500 products, while industry products have an obvious outflow of 29.2 billion yuan [42]. 3.5 Product Declaration Dynamics - In December 2025, the market received 66 declared products, a decrease of 9 from the previous month but still at a high level in recent years. The declared products in December are diversified, covering areas such as batteries, home appliances, non - ferrous metals, public utilities, ChiNext 50, satellites, engineering machinery, animal husbandry and aquaculture, robots, and free cash flow [46]. 3.6 ETF Holder Structure Analysis 3.6.1 Changes in the Proportion of Individual/Institutional Investors - Overall, the proportion of institutional investors' holdings has been rising in the past two years and currently accounts for about 65%. As of June 30, 2025, institutional investors held 1.78 trillion shares, a year - on - year increase of 38.9%, and the proportion of their holdings increased by 4.7 percentage points from the previous period [53]. 3.6.2 Holdings Preference Characteristics of Various Institutional Investors - State - owned funds: The proportion of holdings in broad - based ETFs remains high, accounting for about 98%. The allocation proportion of the CSI 1000 and CSI A500 sectors has increased [65]. - Brokerages: Broad - based products still account for the majority, and the proportion of holdings in industry products has increased. As of mid - 2025, the proportion of industry products increased to 20.5%, a 2.7 - percentage - point increase from the previous period, while broad - based products accounted for 69.6% [69]. - Insurance funds: The proportion of allocation to industry ETFs has significantly increased, and it is roughly the same as that of broad - based ETFs. As of mid - 2025, the proportion of industry ETFs increased to 44%, a 9.6 - percentage - point increase from the previous period, and broad - based ETFs accounted for 41.7% [72]. 3.7 ETF Monthly Investment Strategy 3.7.1 Rotation Strategy Based on Industry and Style Sentiment and ETF Implementation - Industry perspective: The "resource products + military manufacturing" sector may continue to develop. In January 2026, the model recommends focusing on the communication, non - ferrous metals, power equipment and new energy, national defense and military industry, and coal industries [75][82]. - Style perspective: The mid - cap growth style may be dominant in January 2026, with its sentiment possibly in an expansion state and relatively good market performance [76][86]. 3.7.2 ETF Selection Based on Subjective Strategy Analysis - The market is expected to revolve around "mid - cap blue - chips." In terms of industries, the three main lines of manufacturing, consumption, and cyclical sectors are worthy of attention [76]. 3.7.3 ETF Asset Pool for Reference in January - The table provides a reference for corresponding ETF products based on the conclusions of the industry sentiment rotation strategy and subjective strategy analysis, covering mid - cap broad - based, strategy - based, technology manufacturing, consumption, and cyclical sectors [93][95].

Market Overview - In 2025, the A-share market exhibited a comprehensive upward trend, with major indices showing an average increase of over 10%. The growth was particularly pronounced in growth sectors, with the ChiNext Index, North Exchange 50, and Sci-Tech 50 indices each rising by over 30% [1][3]. - The structural characteristics of the market were evident, with technology and resource sectors leading the performance. The optical module (CPO) index surged by over 180%, while indices for optical chips, copper-clad laminates, optical communications, and optical circuit switches all exceeded 100% growth [1][3]. A-share Index Performance - The ChiNext Index led the gains in 2025 with a cumulative increase of 49.57%. The North Exchange 50 and Sci-Tech 50 indices followed with increases of 38.80% and 35.92%, respectively. Other indices such as the Shenzhen Component Index, Wind All A, and CSI 1000 also saw gains exceeding 20% [3]. A-share Industry Performance - Among the 35 industries classified by Wind, 31 recorded increases in 2025. The non-ferrous metals industry topped the list with a cumulative increase of 92.20%. Hardware equipment and industrial trade sectors also performed well, with increases of 62.39% and 54.65%, respectively. Conversely, the daily consumer retail sector saw a decline of 6.42% [5]. A-share Hot Concepts - The optical module (CPO) index was the strongest performer in 2025, with a cumulative increase of 181.28%. Other notable performers included optical chips (130.78%), copper-clad laminates (129.58%), optical communications (125.58%), and optical circuit switches (112.55%). The rare metals, copper industry, and rare earth indices also showed significant growth, with increases of 119.85%, 103.64%, and 98.97%, respectively [9]. A-share Market Capitalization - By the end of 2025, the total market capitalization of the A-share market reached approximately 118.91 trillion yuan, marking a 26.6% increase from the end of 2024 [15]. - The Shanghai main board had the highest number of listed companies at 1,699, accounting for 31.06% of the total. The Shenzhen main board followed with 1,490 companies (27.24%), while the ChiNext and Sci-Tech boards had 1,393 and 600 companies, representing 25.47% and 10.97%, respectively [13]. Financing and Investment Trends - As of the end of 2025, the A-share margin trading balance was reported at 25.553 billion yuan, reflecting a 5.21% increase from the third quarter and a year-on-year increase of 35.91% [22]. - The top gainers in terms of stock price included Weiwei New Materials, which saw a cumulative increase of 1,820%, followed by Tianpu Co., with a 1,645% increase. Conversely, Shijin Technology led the decline with a 51% drop [24]. IPO Activity - In 2025, the A-share market saw a total of 112 IPOs, representing a 9.8% increase year-on-year. The fourth quarter alone accounted for 36 IPOs, up 9.1% from the previous year [49]. - The total fundraising from IPOs in 2025 reached 130.83 billion yuan, a significant increase of 97.4% year-on-year, with the fourth quarter alone raising 54.86 billion yuan, up 165.0% [51].

- The report utilizes the Barra CNE5 model, which defines 10 style factors including Beta, Momentum, Size, Earnings Yield, Residual Volatility, Growth, BP, Leverage, Liquidity, and Non-linear Size. Positive factor exposure indicates preference for the style, while negative exposure indicates avoidance[36][38][39] - The funds managed by the fund manager exhibit high exposure to Beta, Growth, Liquidity, and Non-linear Size factors, indicating a stable mid-cap growth style. The factor exposures show minimal volatility between reporting periods, suggesting a mature and stable investment framework[39][42][43] - Compared to the benchmark index (CSI 800 for Huashang Xin'an and CSI 300 for Huashang Shuangqu Youxuan), the funds have higher exposure to Beta, Momentum, Growth, Liquidity, and Non-linear Size factors, while exposure to Size, Earnings, BP, and Leverage factors is lower. This indicates a smaller market cap and stronger growth attributes relative to the benchmarks[39][41][43] - Huashang Xin'an fund's cumulative return since 2025 reached 39.87%, significantly outperforming its benchmark (12.32%) and the CSI 800 index (18.49%). The fund also consistently outperformed in short, medium, and long-term periods across various metrics such as return, maximum drawdown, and annualized volatility[24][27][28] - Huashang Shuangqu Youxuan fund's cumulative return since 2025 reached 41.90%, significantly outperforming its benchmark (10.54%) and the CSI 300 index (15.66%). Similar to Huashang Xin'an, it consistently outperformed in short, medium, and long-term periods across various metrics[28][31][33]

Fixed Income Research - The new bond tax regulation, effective from August 8, 2025, reinstates VAT on interest income from newly issued government bonds, local government bonds, and financial bonds, while maintaining VAT exemption for bonds issued before this date until maturity [2][3] - The tax policy change reduces the tax advantages previously enjoyed by government and financial bonds, particularly affecting public funds, asset management products, and proprietary trading departments differently based on their tax rates [3][4] - The new regulation is expected to widen the yield spread between new and old bonds by approximately 4-12 basis points, influencing investor behavior towards older bonds [4][5] - The anticipated annual tax revenue increase from the new bond tax regulation is estimated to be in the hundreds of millions, which is relatively limited compared to the total debt interest expenditure [5] Fund Research - In July, the market saw an increase in valuations across major indices, with the CSI 500 showing significant growth in historical valuation percentiles [7] - A total of 92 new funds were launched in July, with a total issuance scale of 703.43 billion, indicating a strong interest in both active equity and index funds [7][8] - Growth style funds outperformed value style funds, with mid-cap growth funds showing a notable increase of 8.23% [8] - The ETF market experienced a net inflow of 676.83 billion, with significant interest in bond ETFs, while stock ETFs faced outflows [9][10] Industry Research - The retail sales of furniture reached 98.2 billion, growing by 22.9% year-on-year, while clothing and textile retail sales totaled 742.59 billion, with a growth of 3.1% [14] - The introduction of the childcare subsidy policy is expected to boost the entire maternity and childcare industry, particularly benefiting sectors like maternal and infant products [14][15] - The Guangdong Paper Association's initiative to promote "anti-involution" is likely to lead to price increases in packaging paper, benefiting leading companies in the sector [15] - The easing of Sino-US tariff issues may provide support for domestic exports, particularly for companies with a global layout [15]

Group 1 - The ChiNext Index (399006) experienced a strong increase of 1.36% as of July 3, 2025, with notable gains from stocks such as Lens Technology (300433) up 8.41%, Huali Group (300979) up 5.81%, and Tianfu Communication (300394) up 5.45% [1] - The ChiNext ETF (159956) has shown active performance with a significant increase in trading volume, reflecting a 3.36% rise in the ChiNext Index over the past two weeks [1] - The China Securities Regulatory Commission (CSRC) announced the formal implementation of a third set of standards for the ChiNext, which supports the listing of high-quality, unprofitable innovative enterprises, enhancing the inclusivity and adaptability of the system for quality tech companies in the Guangdong-Hong Kong-Macao Greater Bay Area [1] Group 2 - Looking ahead, the market is expected to encounter clearer trading opportunities in July, although uncertainties may increase, with pricing likely to focus on "internal policy developments + mid-year performance disclosures + external changes" [1] - There may be a shift in market dynamics with small-cap stocks potentially loosening their grip, and market capitalization style possibly tilting towards mid-cap stocks, as historical trends indicate that mid-cap growth styles tend to outperform in July [1]

Core Viewpoint - The market outlook for A-shares remains positive, supported by global interest rate cuts and increased domestic capital inflow, leading to a gradual rise in the index center [1][2] Group 1: Market Performance - The CSI 500 Quality Growth Index rose by 0.59% as of June 30, 2025, with notable performances from stocks such as Kaiying Network (up 10%), Jingwang Electronics (up 7.86%), and Shenzhou Taiyue (up 6.76%) [1] - The CSI 500 Quality Growth ETF increased by 0.51%, with the latest price at 0.98 yuan [1] Group 2: Investment Strategy - Huaxi Securities suggests that the A-share market will continue to stabilize and improve, driven by the reopening of global interest rate cuts and a recovery in investor risk appetite [1] - Zheshang Securities indicates that mid-cap growth stocks are currently favored, with upcoming trading opportunities expected in July, although uncertainties may increase [1] - Recommended investment strategy includes focusing on banks as a stable investment, while being optimistic about TMT (Technology, Media, and Telecommunications) sectors [1] Group 3: Index Valuation - The CSI 500 Quality Growth Index is currently at a historical low valuation, with a price-to-book (PB) ratio of 1.84, which is lower than 91.96% of the time over the past three years, indicating strong valuation appeal [2] - The index is characterized by a small and mid-cap value growth style, with a better profitability and lower valuation compared to the broader CSI 500 index [2] Group 4: Top Holdings - As of May 30, 2025, the top ten weighted stocks in the CSI 500 Quality Growth Index account for 23.79% of the index, with notable companies including Chifeng Gold, Ninebot, and Shenghong Technology [2][4]