Group 1 - The Hong Kong Stock Connect Non-Bank ETF (513750) has seen a year-to-date increase of 49.50% since its low on April 10, 2025, closing at 1.64 yuan as of August 4, 2025 [1] - The ETF's trading volume reached 8.82 billion yuan with a turnover rate of 7.04%, and the average daily trading volume over the past week was 16.99 billion yuan [1] - The current size of the ETF is 12.516 billion yuan, with a net inflow of 14.25 billion yuan over the last five trading days, and over 72 billion yuan in net inflows in the past month [1] Group 2 - The CSI Hong Kong Stock Connect Non-Bank Financial Theme Index (931024) tracks up to 50 listed companies in the non-bank financial sector, with the top ten weighted stocks accounting for 78.19% of the index [2] - Major stocks in the index include China Ping An, AIA, and Hong Kong Exchanges, each representing over 14% of the index [2] - The report from Minsheng Securities indicates that positive policy adjustments, such as interest rate cuts, are expected to boost market sentiment and support the long-term value growth of quality listed companies [2] Group 3 - Guotai Junan's report anticipates that the performance of listed brokerage firms in the first half of the year will exceed expectations, with increased market financing demand [3] - The Hong Kong Stock Connect Non-Bank ETF is the first and only ETF tracking the non-bank index, with over 60% of its holdings in the insurance sector [3] - The ETF reflects the overall performance of non-bank financial theme listed companies within the Hong Kong Stock Connect range [3]

Core Insights - The Hong Kong Stock Connect Non-Bank ETF (513750) has reached a record high of 8.658 billion yuan in size as of July 21, 2025, with a year-to-date growth of 997.33% [1] - The ETF has seen continuous net inflows over the past 14 days, totaling 3.673 billion yuan, with a single-day peak inflow of 820 million yuan [1] - The ETF's net asset value has increased by 79.30% over the past year, ranking 51 out of 2929 index stock funds, placing it in the top 1.74% [2] Fund Performance - The Hong Kong Stock Connect Non-Bank ETF has achieved a maximum monthly return of 31.47% since its inception, with the longest consecutive monthly gain being 4 months and a total increase of 38.25% [2] - The ETF has outperformed its benchmark with an annualized excess return of 22.98% over the last three months [2] Index Composition - As of June 30, 2025, the top ten weighted stocks in the index include China Ping An, AIA, Hong Kong Exchanges, and others, accounting for 77.92% of the index [3] - The top three holdings, China Ping An, AIA, and Hong Kong Exchanges, each represent over 14% of the index [3] Market Outlook - The insurance sector is expected to see a year-on-year net profit growth of 12.1% in the first half of 2025, driven by improved performance in the second quarter [3] - The insurance industry is currently undervalued, with a PE ratio at the 8.92x percentile and a PB ratio at the 1.50x percentile, suggesting potential investment opportunities [4] Investment Strategy - The market is advised to focus on undervalued stocks, mid-year performance, and business expansion opportunities in the insurance sector [4] - The Hong Kong Stock Connect Non-Bank ETF is the first and only ETF tracking the non-bank index, with over 60% of its composition in the insurance sector, which is seen as a "second flagbearer" in a bull market [4]

Quantitative Models and Construction Methods - **Model Name**: Hang Seng Stock Connect Non-Bank Financial Index (931024.CSI) **Model Construction Idea**: The index aims to reflect the overall performance of non-bank financial companies listed in Hong Kong that are part of the Stock Connect program[31][32]. **Model Construction Process**: 1. Calculate the median daily turnover rate for each Stock Connect security over the past month as the monthly turnover rate. Exclude securities with an average monthly turnover rate below 0.1% over the past 12 months or 3 months, unless their average daily trading volume exceeds HKD 50 million[32]. 2. Select securities from industries such as insurance, capital markets, mortgage credit institutions, other comprehensive financial services, special financial services, and consumer credit as candidate samples[32]. 3. Rank the candidate samples by average daily market capitalization over the past year and select the top 50 securities. If fewer than 50 securities meet the criteria, include all eligible securities[32]. 4. Apply weighting factors between 0 and 1 to ensure no single stock exceeds 15% weight and the top five stocks collectively do not exceed 60% weight[33]. **Model Evaluation**: The index demonstrates strong representation of large-cap financial stocks, particularly in the insurance sector, and provides a focused investment tool for non-bank financial themes in Hong Kong[34][35][36]. Model Backtesting Results - **Hang Seng Stock Connect Non-Bank Financial Index**: - **Total Return**: 53.30%[48] - **Annualized Volatility**: 33.26%[48] - **Maximum Drawdown**: 20.29%[48] - **Sharpe Ratio**: 1.56[48] Quantitative Factors and Construction Methods - **Factor Name**: Market Capitalization Weighting **Factor Construction Idea**: Emphasize large-cap stocks to ensure stability and representativeness of the index[36]. **Factor Construction Process**: 1. Divide constituent stocks into market capitalization tiers: above HKD 500 billion, between HKD 200 billion and HKD 500 billion, and below HKD 500 billion[36]. 2. Assign weights based on market capitalization, with stocks above HKD 500 billion collectively accounting for 46.63% of the index weight, stocks between HKD 200 billion and HKD 500 billion accounting for 28.49%, and stocks below HKD 500 billion accounting for 8.31%[36]. **Factor Evaluation**: The factor ensures the index is dominated by stable, large-cap stocks, reducing volatility and enhancing reliability[36][40]. - **Factor Name**: Sector Allocation **Factor Construction Idea**: Focus on insurance and capital market sectors to capture the core of non-bank financial themes[34][35]. **Factor Construction Process**: 1. Allocate weights to sectors based on their representation in the index: insurance accounts for 65.11%, securities companies for 11.08%, and other capital market entities for 20.95%[35]. **Factor Evaluation**: The factor provides a balanced yet focused exposure to key non-bank financial sectors, aligning with the index's thematic goals[34][35]. Factor Backtesting Results - **Market Capitalization Weighting Factor**: - **Weight Distribution**: - Above HKD 500 billion: 46.63%[36] - HKD 200 billion–500 billion: 28.49%[36] - Below HKD 500 billion: 8.31%[36] - **Sector Allocation Factor**: - **Weight Distribution**: - Insurance: 65.11%[35] - Securities Companies: 11.08%[35] - Other Capital Market Entities: 20.95%[35] Additional Observations - **Index Fundamental Characteristics**: - **ROE (2024)**: 11.69%[43] - **ROE (2025 Q1)**: 2.94%[43] - **Dividend Yield (Last 12 Months)**: 4.01%[43] - **Valuation Metrics**: - **PE_TTM**: 8.52 (22.76% below historical average)[44] - **Index Concentration**: - **Top 10 Constituents Weight**: 82.79%[41] - **Largest Constituent (Hong Kong Exchange)**: 17.69% weight[41]

Core Viewpoint - The financial sector, particularly the banking sector, has shown strong performance recently, with a continuous rise over six trading days, although there was a slight pullback in early trading today [1] Group 1: Differences Between Indices - The CSI 300 Non-Bank Financial Index consists of 27 stocks selected from the CSI 300 Index, focusing on capital markets, other financial sectors, and insurance, with an average market capitalization of approximately 842 billion [2][3] - The CSI 800 Securities and Insurance Index includes 50 stocks from the CSI 800 Index, concentrating on the securities and insurance sectors, with an average market capitalization of about 538 billion [4] - The weight distribution in the CSI 300 Non-Bank Financial Index is heavily concentrated in large-cap stocks, with the top five stocks accounting for 64.06% and the top ten for 78.25% [5] - In contrast, the CSI 800 Securities and Insurance Index has a more diversified weight distribution, with the top five stocks exceeding 50% and the top ten at 63.58% [7] Group 2: Performance and Volatility - Over the past year, both indices have performed well, with returns exceeding 20%, but the CSI 300 Non-Bank Financial Index has outperformed the CSI 800 Securities and Insurance Index [9] - In the last three years, the CSI 300 Non-Bank Financial Index has also shown slightly better performance, while the CSI 800 Securities and Insurance Index has outperformed over the last five years [9] - The volatility of the CSI 800 Securities and Insurance Index has been higher than that of the CSI 300 Non-Bank Financial Index across all time frames from one to five years, although the difference is not significant [9] Group 3: Valuation Levels - Despite both indices having increased by over 20% in the past year, their price-to-earnings ratios (TTM) remain below the historical 5% threshold, indicating attractive valuation levels [11] Group 4: Suitable Investor Types - The CSI 300 Non-Bank Financial Index is suitable for investors looking to invest in large-cap non-bank financial stocks and seeking stable allocations, or as part of an enhancement strategy for the CSI 300 Index [14] - The CSI 800 Securities and Insurance Index is more appropriate for investors optimistic about the overall development of the securities and insurance industries, who can tolerate slightly higher volatility and wish to capture opportunities in mid- and large-cap stocks [14] Group 5: Similarities Between Indices - Both indices focus on non-banking sectors, primarily concentrating on securities and insurance [15] - Historically, the overall trends of both indices have been relatively consistent [15] - There is a significant overlap in the top ten constituent stocks of both indices [17]