Core Viewpoint - The Hong Kong Dividend Low Volatility ETF (520550) has shown remarkable performance in the current market, characterized by a combination of low volatility and high dividends, making it an attractive investment option during uncertain market conditions [1][5]. Performance Summary - The ETF has reached 34 new highs this year, with continuous net inflows and increasing scale, indicating strong investor interest [1]. - From the beginning of the year to June 20, 2025, the ETF has outperformed both the dividend index and the CSI 300, achieving a growth rate of 15.47% [5]. Dividend Mechanism - The ETF features a monthly dividend assessment mechanism, allowing for up to 12 dividend distributions per year, which is appealing for income-focused investors [3]. - The second cash dividend distribution occurred on June 20, 2025, with the next opportunity for new investors to receive dividends not available until July [4]. Key Factors for Performance 1. **High Dividend Yield and Low Valuation**: The current dividend yield of the Hang Seng High Dividend Low Volatility Index is 7.82%, with some constituent stocks yielding over 8%, significantly higher than the A-share dividend index and the 10-year government bond yield. The index's price-to-earnings ratio is 7.07, and the price-to-book ratio is 0.61, indicating many stocks are trading below their book value, providing a strong margin of safety [7]. 2. **Policy and Capital Support**: The government has mandated that insurance funds increase their equity market investment ratio starting in 2025, favoring undervalued, high-dividend assets. This has led to a significant increase in net purchases of Hong Kong stocks, surpassing 80% of the total for 2024, providing solid support for dividend stocks [8]. 3. **Product Advantages**: The ETF has the lowest fee rate in the market, with a total expense ratio of only 0.2%. It offers monthly dividends for stable cash flow and supports T+0 trading, allowing for flexible adjustments based on market fluctuations. The index's mechanism limits individual stock weight to 5%, enhancing diversification and avoiding "high dividend traps" [9]. Market Behavior - In times of market uncertainty, funds tend to flow back into high dividend sectors. While some Hong Kong tech stocks have yet to recover to pre-tariff highs, the Hong Kong Dividend Low Volatility ETF has already set new highs, illustrating the adage: "In a bull market, one profits from stock prices; in a bear market, from dividends; and in a volatile market, from dividends" [10].