Core Viewpoint - The fund has moderately reduced its holdings in the innovative drug sector while increasing allocations to the non-bank financial and internet sectors in Q3 2025 [1] Non-Bank Financial Sector - The tightening liquidity environment benefits insurance companies' interest spreads, with valuations at historically low levels, providing good safety margins and recovery potential [1] - In the context of a weak macroeconomic recovery, the stable nature of insurance products is likely to attract more capital [1] Internet Sector - The internet sector has become a key focus for allocation in Q3, with valuation recovery driven by a combination of macroeconomic, fundamental, and liquidity factors rather than a surge in performance [1] - The initiation of the Federal Reserve's interest rate cut cycle has lowered risk-free rates, directly boosting the valuations of long-duration assets like internet companies [1] - Improved market sentiment regarding overall demand has enhanced growth prospects for core businesses such as e-commerce and advertising [1] - Internet companies have shifted from a growth-oriented to a profit-oriented approach after several years of strategic adjustments, resulting in significantly improved profitability and cash flow quality [1] - In a challenging environment for traditional industries and increased volatility in certain tech sectors, leading internet firms have become a consensus investment choice due to their high liquidity, clear business models, and stable shareholder returns, attracting funds from other sectors [1]

Macro Environment - The current macroeconomic situation is characterized as "weak recovery, low inflation," with policies focused on stabilizing growth and preventing risks [5][11] - The State Council issued a plan to optimize the market allocation of factors, which is expected to enhance economic efficiency and provide a more flexible policy environment for related industries [5][11] - Policies supporting traditional industries such as automotive, steel, and construction have been introduced, alongside new initiatives for emerging sectors like new energy storage and artificial intelligence [5][11] Market and Industry Performance - In September, the bond market showed significant differentiation, with the 10-year government bond futures index slightly rising by 0.02%, while the 30-year futures contract fell by 2.28% [48][51] - The equity market favored growth sectors, with the advanced manufacturing index rising by 8.99% and technology (TMT) by 5.6%, while sectors like healthcare and finance saw declines [53][58] - The top-performing industries in September included electric equipment (21.17%), non-ferrous metals (12.79%), and electronics (10.96%), while sectors like social services and non-bank financials faced declines [58][63] Monthly Allocation Recommendations - The report suggests a balanced allocation between growth and value styles, with a focus on sectors such as TMT, pharmaceuticals, and securities [6][69] - The anticipated easing of monetary policy by the Federal Reserve is expected to enhance market risk appetite, although the crowded midstream manufacturing sector may increase short-term volatility risks [6][69]