Group 1 - The market sentiment has improved, with small-cap stocks regaining momentum, as evidenced by the performance of the CSI 2000 Enhanced ETF and the 1000 ETF, which rose by 0.83% and 0.92% respectively, with a peak increase of 0.99% and 1.00% [1] - In the recent stock index rally, small-cap stocks have significantly outperformed large-cap stocks due to four main reasons: 1) expectations of domestic and international liquidity easing, with a weaker dollar facilitating foreign capital inflow into A-shares, benefiting small-cap stocks; 2) a strengthened narrative around technology and other industries, with clear policy direction attracting continuous capital inflow; 3) a broad market rally lifting the overall market baseline, with policy expectations catalyzing a rebound in low-priced stocks; 4) a significant narrowing of the basis for stock index futures, indicating a recovery in market risk appetite [1] - Over the past 10 days, small-cap ETFs have attracted nearly 800 million yuan in capital inflow, reflecting strong investor interest in this segment [1]

Core Viewpoint - The Shanghai Composite Index reached a nearly four-year high on August 13, with trading volume in both markets exceeding 2 trillion yuan, indicating strong market momentum and investor confidence [1]. Group 1: Market Performance - The CSI 2000 Enhanced ETF (159552) achieved a year-to-date return of over 50%, becoming the first broad-based ETF to surpass this threshold in 2023 [1]. - The fund's share volume expanded more than 45 times this year, making it the ETF with the largest share increase in the market [1]. Group 2: Market Drivers - Four main factors contributed to the outperformance of small-cap stocks compared to large-cap stocks: 1. Expectations of domestic and international liquidity easing, with a weaker dollar facilitating foreign capital inflow into A-shares, benefiting small-cap stocks [1]. 2. Strengthened narratives around technology and other industries, with clear policy directions leading to sustained capital inflow [1]. 3. A general market rally raising the overall market baseline, with policy expectations catalyzing a rebound in previously undervalued stocks [1]. 4. The significant narrowing of the basis for IC and IM futures contracts, reflecting a recovery in market risk appetite [1]. Group 3: Market Outlook - There is a need to monitor the uncertainty arising from the divergence between fundamentals and market performance [1].