Core Viewpoint - The China Securities A500 Index is highlighted as a quality choice for balancing growth potential and risk control, particularly due to its comprehensive layout of emerging industries and high industry diversification [1]. Market Characteristics - As of October 2025, the A-share market is characterized by "high leverage, high volatility, and high differentiation," with significant divergence in market outlook. The Shanghai Composite Index fluctuates between 3800 and 4000 points, influenced by large declines in the ChiNext and STAR Market, while margin trading balances continue to rise to a historical high of 2.44 trillion yuan [3]. Investment Dilemma - Ordinary investors face a dilemma: chasing high-growth "small-cap" assets risks being trapped, while investing in "large-cap" assets may lack sufficient elasticity. During market fluctuations, investors are advised to prepare for both offensive and defensive strategies, with a recommendation to consider the A500 ETF Southern (159352.SZ) and its associated funds [4]. Balanced Allocation - The key to resolving the investment dilemma lies in balanced allocation. The China Securities A500 Index covers all primary and secondary industries, with a high degree of industry coverage. Its top five sectors include electronics, electrical equipment, banking, pharmaceuticals, and non-ferrous metals, which are more heavily weighted in emerging industries compared to the CSI 300 Index, reflecting China's economic transformation [6]. Comprehensive Layout - The index breaks away from the limitations of solely valuing by market capitalization, incorporating industry leaders and specialized enterprises, serving as an "investment map" for identifying new productive forces. For instance, in the new energy vehicle sector, it includes not only leading manufacturers but also key technology firms in the supply chain [8]. Performance Metrics - As of October 27, the A500 Index has achieved a year-to-date increase of 22.78%, outperforming the CSI 300's 19.85%. The A500 ETF Southern (159352.SZ) has delivered a return of 25.22%, indicating strong performance driven by the inflow of financing into key sectors [9]. Risk Mitigation - The A500 Index serves as a "risk buffer" during market fluctuations, with its maximum industry weight below 15%, effectively reducing the risk of collapse in any single sector. The index's volatility over the past year is approximately 17.3%, comparable to the CSI 300, but with a higher return by nearly 3 percentage points, showcasing its "low volatility, high return" characteristic [10]. Policy Alignment - The index aligns well with current policy directions, particularly in sectors like electronics, electrical equipment, and pharmaceuticals, which are prioritized in the "14th Five-Year Plan." The index includes leading firms in these sectors, benefiting from policy support and technological advancements [13]. Earnings Resilience - The A500 Index has shown strong earnings resilience, with double-digit growth in key sectors during the first two quarters of the year. This performance is crucial as the market focuses on earnings certainty during the earnings reporting season [14]. Valuation Insights - As of October 27, the index's price-to-earnings ratio stands at 17 times, providing a dual safety net of low valuation and high growth potential, which is attractive to investors in the context of a weak economic recovery [15]. Future Outlook - With the acceleration of emerging industries and the recovery of traditional sectors, the long-term value of the A500 Index is expected to steadily rise. The index's historical performance suggests that it can achieve higher levels with sustained earnings growth [16]. Fund Performance - The A500 ETF Southern (159352.SZ) has a management scale of 20.77 billion yuan and has generated an excess return of approximately 2.3 percentage points over the past year, making it a leading fund tracking the A500 Index [18].