Core Viewpoint - The article discusses the performance and characteristics of the China Securities Dividend Value Index, which tracks 50 high dividend yield and value-oriented stocks, primarily in the banking, coal, and transportation sectors, accounting for approximately 80% of the index [3][4]. Summary by Relevant Sections Index Composition and Performance - The China Securities Dividend Value Index consists of 50 stocks with high dividend yields and notable value characteristics, reflecting the overall performance of high dividend and value stocks [3]. - As of the midday close on August 19, 2025, the index showed a performance change of 72.0% [4]. - The rolling price-to-earnings (P/E) ratio of the index is reported at 7.6 times [4]. Historical Context and Adjustments - The index has been in existence since 2014, with its valuation percentile indicating historical performance relative to current valuations [4]. - The index was adjusted from a market capitalization-weighted to a stock rate-weighted methodology on December 16, 2013 [4]. Dividend Yield Calculation - The dividend yield is calculated as the total cash dividends (pre-tax) over the stock market value, with the index considering the average cash dividend yield over the past three years [5]. - The actual dividend yield received by fund holders may be lower than the reported values due to applicable tax rates, which vary between markets [5]. Fund Management and Fees - The fund associated with the index has a low management fee of 0.15% per year and a custody fee of 0.05% per year [5].

Group 1 - The Hang Seng High Dividend Low Volatility Index rose by 0.7%, aiming for a "four consecutive days" increase [1] - The CSI Dividend Low Volatility Index increased by 0.2%, while the CSI Dividend Index and CSI Dividend Value Index fell by 0.02% and 0.04% respectively [1] - The trading volume of the Hang Seng Dividend Low Volatility ETF (159545) reached nearly 80 million yuan, with its total scale reaching a historical high of 4.05 billion yuan as of yesterday [1]

Group 1 - The core indices such as the China Securities Dividend Value Index and the China Securities Dividend Low Volatility Index have shown slight increases of 0.2% and 0.1% respectively, while the Hang Seng High Dividend Low Volatility Index has decreased by 0.8% [1] - The Hang Seng Dividend Low Volatility ETF (159545) experienced a net inflow of 1.5 billion yuan in July, reaching a total size of nearly 4 billion yuan, marking a record high since its inception [1] Group 2 - The China Securities Dividend Index consists of 100 stocks with high cash dividend yields and stable dividends, primarily from the banking, coal, and transportation sectors, which together account for over 55% of the index [2] - The China Securities Dividend Low Volatility Index is composed of 50 stocks that exhibit good liquidity, continuous dividends, and moderate dividend payout ratios, with a significant representation from the banking, transportation, and construction sectors, accounting for nearly 70% [2] - The Hang Seng High Dividend Low Volatility Index includes 50 stocks within the Hong Kong Stock Connect that have good liquidity and low volatility, with financial, industrial, and energy sectors making up nearly 70% of the index [2] - The China Securities Dividend Value Index is made up of 50 stocks that exhibit high dividend levels and value characteristics, with banking, coal, and transportation sectors representing approximately 80% of the index [2]

Core Viewpoint - The article discusses the investment philosophy of Walter Schloss and his son Edwin Schloss, emphasizing their "cigar butt" strategy, which focuses on buying undervalued stocks with a strong margin of safety and minimal debt [2][3][9]. Investment Performance - Walter Schloss established his limited partnership in 1955, achieving a remarkable annual compound return of 15.3% from 1956 to 2000, compared to the S&P 500's 11.5% during the same period [3]. - An investment of $1 in Schloss's partnership in 1956 would have grown to $662 by 2000, while the same amount in the S&P 500 would have only reached $118 [3]. Investment Philosophy - The Schlosses are minimalists, focusing solely on financial statements and avoiding external influences, which allows them to concentrate on buying cheap stocks [4]. - Their investment strategy is characterized by a strong emphasis on safety margins, only purchasing stocks priced significantly below their net current asset value (NCAV) or tangible asset value [9]. - They adhere to a zero or low-debt principle, ensuring that companies have minimal long-term debt, which reduces the risk of bankruptcy due to debt defaults [10]. Market Neutrality - Schloss's approach does not rely on bull markets for returns; instead, it focuses on the intrinsic value of stocks, which can be realized through various catalysts such as fundamental improvements, asset sales, or mergers [12][15]. - The strategy aims to capture value recovery rather than relying on high growth or market bubbles [15]. Diversification - The Schlosses maintain a highly diversified portfolio, typically holding over 100 stocks, which mitigates individual stock risks and ensures that a few successful investments can offset losses from others [16][17]. - This diversification strategy allows them to avoid significant losses from any single investment, thereby enhancing overall portfolio stability [17]. Avoiding Valuation Bubbles - The core of their deep value strategy is to only buy extremely cheap stocks, avoiding investments during market bubbles, which protects against substantial downturns [19][20]. - By steering clear of high-growth stocks that are often overvalued, the Schloss strategy minimizes risk during market corrections [20]. Summary of Success Factors - The Schloss strategy emphasizes strong downside protection, capturing value recovery, and maintaining a diversified portfolio, which collectively contribute to consistent positive returns over time [21][22][23]. - The approach is particularly suitable for investors with moderate risk tolerance who seek stable returns and wish to avoid significant drawdowns, focusing on long-term growth through compounding [23].