Core Viewpoint - The report highlights the growth of equity investments in sectors such as electronics, communications, innovative pharmaceuticals, and military industries, while emphasizing the importance of a balanced growth investment strategy in the current market environment [1][2]. Group 1: Investment Strategy - The newly launched fund, 景顺长城衡益, is managed by Guo Lin, who adopts a balanced growth investment approach, focusing on TMT (Technology, Media, Telecommunications) and other growth sectors like military, pharmaceuticals, manufacturing, and new consumption [1]. - Guo Lin's investment philosophy is centered on identifying companies with long-term growth potential within sub-sectors that exhibit favorable industry conditions, avoiding bets on single sectors or industry rotations [1][2]. Group 2: Market Analysis - The Hong Kong stock market, despite its volatility, presents solid long-term investment logic, supported by the Federal Reserve's recent interest rate cuts, which may enhance liquidity in the market [2]. - The Hang Seng Index currently has a price-to-earnings ratio of 11.94, which is lower than that of other major indices like the Nikkei 225 (22.53) and S&P 500 (29.57), indicating significant potential for price recovery [2]. Group 3: Performance Metrics - Under Guo Lin's management, the 景顺长城科技创新三年定开 fund has achieved a net value growth rate of 40.57% this year, outperforming its benchmark (26.49%) and the mixed equity fund index (30.97%) [2]. - The fund's portfolio has consistently included significant holdings in growth sectors such as electronics, media, pharmaceuticals, and military, with over 30% of its net value in Hong Kong stocks across the last four reporting periods, showcasing Guo Lin's extensive experience in the Hong Kong market [2]. Group 4: Future Outlook - Guo Lin maintains a relatively optimistic outlook for the equity market, anticipating a potential rebound in risk appetite driven by developments in US-China negotiations and economic data influencing policy expectations [2]. - The new fund will continue to focus on a balanced growth strategy to navigate structural market conditions, with particular attention to sectors like gaming, media, consumer electronics, domestic computing power, pharmaceuticals, military, energy storage, and resources, while favoring technology consumption leaders represented by the Hang Seng Tech Index [2]. Group 5: Fund Structure - The 景顺长城衡益 fund is an initiated fund, requiring the fund manager to invest at least 10 million yuan of their own capital and maintain this investment for no less than three years, reflecting confidence in their strategy and management capabilities [3].

Market Overview - On July 17, the A-share market opened lower but rose slightly, with the Shanghai Composite Index facing resistance around 3507 points[2] - The Shanghai Composite Index closed at 3516.83 points, up 0.37%, while the Shenzhen Component Index rose 1.43% to 10,873.62 points[6] - Total trading volume for both markets reached 15,605 billion yuan, above the median of the past three years[3] Sector Performance - Strong sectors included electronic components, software development, communication equipment, and aerospace, while banking, insurance, precious metals, and real estate underperformed[3] - Over 70% of stocks in the two markets rose, with notable gains in aerospace, biopharmaceuticals, and electronic components[6] Valuation Metrics - The average price-to-earnings (P/E) ratios for the Shanghai Composite and ChiNext indices are 14.44 times and 39.44 times, respectively, aligning with the median levels of the past three years[3] - The report suggests that current valuations are suitable for medium to long-term investments[3] Economic Indicators - China's economy continues to show moderate recovery, driven by consumption and investment[3] - June's Consumer Price Index (CPI) rose by 0.1% year-on-year, while the Producer Price Index (PPI) fell by 3.6%[3] Investment Strategy - The report recommends a balanced strategy to optimize portfolio structure amid market fluctuations, focusing on growth stocks with reasonable valuations and strong mid-year performance expectations[3] - Short-term investment opportunities are highlighted in software development, communication equipment, electronic components, and aerospace sectors[3]