Core Viewpoint - The article analyzes the performance of active equity funds in the A-share market during a period of volatility, highlighting the characteristics of funds that provide a stable holding experience for investors [1]. Group 1: Characteristics of Low Drawdown Funds - A small percentage (approximately 4.7%) of active equity funds have shown positive returns since March, with some funds like Huian Industry Leader A and Huian Hongyang Three-Year Holding achieving maximum drawdowns of less than 2% [2]. - The average investment concentration of these low drawdown funds is only 0.04%, significantly lower than the average of 0.11% for similar funds, indicating a diversified portfolio that mitigates individual stock volatility [2]. - The average price-to-earnings (P/E) ratio of the top holdings in these funds is around 10 times, compared to 44.23 times for similar funds, providing a strong defensive attribute during market corrections [3]. Group 2: Fund Manager Experience and Strategy - Fund managers of these low drawdown funds have an average experience of over 9 years, having navigated through two complete bear markets, which contributes to their stable investment strategies [3]. - The average turnover rate of these funds is significantly lower (92.54%) than that of similar funds (214.68%), indicating a focus on long-term investment rather than chasing short-term trends [3]. Group 3: Criteria for Selecting "Comfortable" Funds - The article outlines five key criteria for selecting funds that provide a comfortable holding experience, including maximum drawdown of less than 10% and a recovery time of less than 60 days [4]. - Only 14 funds met these stringent criteria, representing less than 0.5% of the total active equity funds established before 2021, showcasing their resilience across market cycles [4]. Group 4: Comparison with High Volatility Funds - High volatility funds, despite showing attractive long-term returns, often lead to poor holding experiences, with significant net redemptions during market downturns [5]. - In contrast, the "comfortable" funds experienced net redemptions of less than 20% during major market declines, demonstrating their ability to retain investor confidence [5]. Group 5: Example of Successful Fund - Huatai Bairui Dingli A maintained a maximum drawdown of under 5% and saw net subscriptions during market downturns, with a profitability percentage of 75.81% over five years [6]. - Conversely, another fund, CITIC Prudential Zhixing A, experienced significant redemptions and a drastic reduction in size due to poor performance during market corrections [6]. Group 6: Building a Fund Portfolio - An investment portfolio consisting of the 14 "comfortable" funds would yield a return of 29.27% with a maximum drawdown of no more than 4%, compared to a mere 2.24% return and over 40% drawdown for the broader market index [7]. - Investors are advised to set hard indicators for constructing a portfolio that emphasizes low drawdown and high recovery capability, ensuring a more stable investment experience [7]. Group 7: Strategy for Ordinary Investors - The article suggests an optimized "core-satellite" strategy, where the majority of funds are allocated to low-volatility, high-success-rate funds, while a smaller portion is invested in higher-risk, higher-reward funds [8]. - This approach balances the need for stability with the opportunity for excess returns, helping investors avoid the psychological pitfalls of high volatility [8].

Market Performance - The A-share market saw a collective decline in the three major indices, with the Shanghai Composite Index dropping by 0.75% [1] - The CSI 1000 ETF (159845) decreased by 0.39%, while other broad indices such as the SSE 50 and CSI 300 fell by 0.83% and 0.82% respectively [1] - Among the top 50 weighted stocks in the CSI 1000 ETF, Xingyuan Material rose by 6.82%, Jibite increased by 3.28%, and Yahua Group gained 3.27%, while Chunzhong Technology and Jucheng Co. saw declines of 6.03% and 5.87% respectively [1] Industry Performance - In the major sectors of the CSI 1000 ETF, the electronics sector fell by 1.36%, power equipment decreased by 1.55%, pharmaceuticals dropped by 0.43%, and computers also declined by 1.55%, while machinery equipment remained flat with a slight increase of 0.02% [1] Fund Flow and Liquidity - The CSI 1000 ETF (159845) experienced a net inflow of 642 million yuan over the past five trading days, bringing its latest scale to 45.476 billion yuan, with a monthly growth of 688 million yuan [1] - The trading volume for the day reached 715 million yuan, with an average daily trading volume of 1.116 billion yuan over the past week, indicating good liquidity [1] Regulatory Environment - The chairman of the CSRC recently indicated a willingness to "moderately open up capital space and leverage limits" for high-quality securities institutions, which has sparked market discussions [2] - This regulatory approach aims to strengthen classified supervision and support superior institutions while maintaining a reasonable leverage range for the securities industry [2] Economic Outlook - Dongguan Securities noted that with enhanced economic resilience and improved corporate profitability, a dual drive of fundamentals and liquidity may become the main theme of the market [2] - Sectors with low valuations, strong dividend defensive attributes, certain earnings growth, and robust technology characteristics are expected to be favored by the market [2]