Core Insights - The report emphasizes the significance of macroeconomic conditions on style allocation, utilizing three mainstream ETFs for monthly rotation trading, which has consistently outperformed benchmarks in backtesting [1] - Looking ahead to Q4, with the Federal Reserve's interest rate cuts almost certain, and expectations of declining export growth, the financial environment is expected to improve while economic momentum slows, indicating a preference for the CSI 2000 and ChiNext Index [1] Group 1: Merrill Lynch Clock Method - The traditional Merrill Lynch clock divides the economic cycle into four stages: recovery, overheating, stagflation, and recession, with the recovery phase favoring the CSI 2000 and ChiNext Index [2] - A simulated portfolio based on the Merrill Lynch clock from 2014 to present achieved a cumulative return of 379.9%, with an annualized return of 14.4% and an information ratio of 0.44 [2][24] - For Q4, the combination of marginal economic slowdown and low prices is likely to continue, prioritizing the ChiNext Index and CSI 2000 [2] Group 2: Pring Cycle Method - The Pring cycle categorizes the economic cycle into six stages, with the recovery early stage favoring the CSI 2000 and ChiNext Index [3] - A simulated portfolio based on the Pring cycle from 2014 to present achieved a cumulative return of 282.4%, with an annualized return of 12.2% and an information ratio of 0.27 [3][43] - In Q4, leading indicators are expected to continue rising, while synchronous indicators may fluctuate, suggesting a preference for the CSI 2000 [3] Group 3: Macro-Friendly Scoring Method - The macro-friendly scoring method combines the Merrill Lynch cycle, inventory cycle, and financial cycle to create a unique indicator that provides clearer insights into the economic cycle state [4] - The report anticipates that the three cycles will resonate positively in the next six months, favoring growth styles [4] Group 4: Investment Recommendations - Given the expected interest rate cuts by the Federal Reserve and the anticipated decline in export growth, the report suggests that the CSI 2000 and ChiNext Index have high allocation value [5]