Core Viewpoint - The fixed income market is facing challenges due to compressed yields, prompting fund managers to adopt new strategies for stable returns, including enhanced trading capabilities and a focus on equity markets for additional gains [1][2][4]. Group 1: Trading Strategies - The importance of trading ability has increased for fund managers in the fixed income sector, as traditional "buy and hold" strategies yield lower returns [1][3]. - The team employs quantitative methods to monitor the duration of bond funds daily, allowing for dynamic adjustments to portfolio duration based on market conditions [2][3]. - The introduction of more trading tools, such as expanding the list of trading partners and integrating third-party trading software, is aimed at improving operational efficiency [3]. Group 2: Investment Focus - The new mixed bond fund, CITIC Prudential Hui Li Bond, aims to create a low-volatility "fixed income plus" product, with a portion of investments allocated to stable-performing equity funds [2][4]. - The fund manager has established strict operational rules for equity positions, including initial allocation ratios and thresholds for profit-taking and rebalancing [2][3]. - There is a growing emphasis on capturing opportunities in the equity market, particularly in stable and mature active equity funds that employ dividend and turnaround strategies [3][4]. Group 3: Market Outlook - The bond market is expected to remain volatile in the short term due to policy uncertainties, but recent interest rate cuts by the central bank may provide support for economic stability [4]. - The short to medium-term bonds are viewed as having higher certainty, while long-term rates are influenced by various factors, leading to greater uncertainty [4]. - The convertible bond market is currently at a neutral valuation, with potential upside due to lower implied volatility compared to underlying stocks, focusing on balanced convertible bonds in sectors like AI and robotics [4].

Core Viewpoint - The revaluation of Chinese assets is driven by technological innovation, macroeconomic policies, industrial environment, and valuation levels, with a particular focus on AI technology as a significant catalyst for change [2][3][4]. Group 1: Drivers of Asset Revaluation - Technological innovation, exemplified by DeepSeek in the AI sector, is a key factor driving the revaluation of Chinese assets, showcasing China's capabilities in manufacturing and technology [2]. - The macroeconomic policy environment is improving, with the government signaling a shift to a "dual easing" cycle, which is expected to stabilize the economy and improve corporate profitability [3]. - Industrial policies are revitalizing market confidence, particularly in the private sector, which is crucial for economic growth and investment [3]. Group 2: Valuation Characteristics - Current asset valuations in China are at historical lows, with broad indices and major industries undervalued compared to international peers, creating an attractive investment opportunity [4]. - The combination of low valuations and improving fundamentals is drawing global investors to reassess the investment value of the Chinese market [4]. Group 3: International Market Context - The global market's adjustments, including a weakening dollar and volatility in U.S. stocks, are enhancing the comparative advantages of Chinese equities [5][6]. - The current economic uncertainty in the U.S. is prompting capital to flow out of American markets, potentially benefiting emerging markets like China [6][7]. Group 4: AI Sector Potential - The AI sector in China is characterized by low-cost advantages, an open-source ecosystem, and ongoing application innovations, indicating significant growth potential [8][9]. - The transition from concept validation to commercial realization in AI is expected to drive performance in the next 1-3 years, marking a shift towards earnings-driven investment [9]. Group 5: Investment Opportunities - Three categories of industries are identified for potential investment: those driven by policy stimulus, those with cleared supply-side issues, and those with clear demand-side support [10][11][12]. - A phased investment strategy is recommended, focusing on sectors with immediate policy impacts, followed by those with supply-side adjustments, and finally, long-term growth sectors in technology [12].