Core Viewpoint - U.S. small-cap stocks have underperformed recently, but the Vanguard FTSE All-World ex-US Small-Cap ETF (VSS) presents a compelling investment opportunity for the future, particularly as investors approach 2026 [1][3]. Group 1: Performance and Volatility - The Vanguard ETF has outperformed major U.S. small-cap indexes over the past three years while exhibiting significantly lower annualized volatility, challenging the notion that international funds are inherently more volatile [4]. - This ETF provides superior risk-adjusted returns compared to similar domestic funds, making it an attractive option for investors [5]. Group 2: Convenience and Diversification - The ETF simplifies investment by combining exposure to both developed and emerging markets, alleviating the burden of stock-picking for investors [6]. - Investing in international small-cap stocks helps reduce stock-level concentration and mitigates risks associated with focusing on a single geographic market [8]. Group 3: Cost Efficiency - The Vanguard ETF features a low expense ratio of 0.08%, significantly lower than the category average of 1.24%, making it a cost-effective choice for investors [9]. - International small-caps are trading at discounted valuations compared to U.S. counterparts, and they tend to be more profitable, which is noteworthy given that approximately 40% of Russell 2000 index companies are unprofitable [10]. Group 4: Geographic Exposure - About half of the ETF's geographic exposure is allocated to European and Japanese stocks, regions with lower interest rates compared to the U.S., which may benefit investors sensitive to interest rate fluctuations [11].

Core Insights - The AI investment competition concluded with Qwen 3 Max emerging as the winner, followed by DeepSeek, both from China, while GPT-5 ranked last with significant losses [1][4]. Group 1: Competition Overview - The competition involved six top AI models, including Qwen 3 Max, DeepSeek V3.1, and GPT-5, trading cryptocurrency perpetual contracts on the Hyperliquid platform [3][4]. - Each AI model was given $10,000 to trade various cryptocurrencies, with performance measured by risk-adjusted returns [4][5]. Group 2: Performance Metrics - Qwen 3 Max achieved an account value of $12,232 with a return of +22.32%, completing 43 trades with a win rate of 30.2% and a Sharpe ratio of 0.273 [5][6]. - DeepSeek V3.1 followed with an account value of $10,489 and a return of +4.89%, having the highest Sharpe ratio of 0.359, indicating strong risk management [6][7]. - Other models, including Claude Sonnet 4.5, Grok 4, Gemini 2.5 Pro, and GPT-5, experienced significant losses, with GPT-5 suffering a -62.66% return [5][7]. Group 3: Trading Strategies - Qwen 3 Max employed a straightforward strategy, focusing solely on BTC with high leverage, while DeepSeek utilized a more analytical approach with independent logic for each asset [8][10]. - GPT-5 maintained all positions despite substantial losses, reflecting a less adaptive strategy compared to others [10][11]. - Gemini 2.5 Pro adopted a strict short-selling approach, disregarding short-term market fluctuations [10][12]. Group 4: Future Implications - The competition highlighted the effectiveness of simple, focused strategies over complex ones, suggesting that less can be more in trading [14][15]. - The organizers aim to use financial markets as a training ground for AI, believing that the dynamic nature of markets presents a greater challenge than fixed-rule environments [12][14].

Market Overview - Jerome Powell's dovish stance at the Jackson Hole meeting indicates rising downside risks to employment, suggesting potential interest rate cuts[4] - The Chinese stock market continues to lead globally, with the ChiNext, CSI 300, and Hang Seng Tech indices rising by 6.1%, 4.2%, and 4.1% respectively[4] Bond and Currency Markets - The 10-year U.S. Treasury yield decreased by 7 basis points to 4.26%, while the U.S. dollar index fell slightly below 100[4] - Global funds have significantly flowed into bond markets, with notable inflows into U.S. and emerging market bonds[17] Capital Flows - In the past week, overseas active funds saw an outflow of $1.38 billion, while passive funds experienced an inflow of $20.93 billion into Chinese equities[4] - Domestic capital inflows into the Chinese market amounted to $21.64 billion, with foreign capital inflows at $19.55 billion[4] Valuation Metrics - The equity risk premium (ERP) for the Shanghai Composite Index decreased to a historical percentile of 43%, while the CSI 300's ERP is at 54%[4] - The overall ERP for A-shares dropped from 59% to 53%[4] Economic Indicators - The probability of a rate cut in September has decreased to 75% from 85.4% the previous week, indicating a shift in market expectations[4] - Key upcoming economic indicators include U.S. Q2 GDP and personal consumption expenditures data[4] Risk Factors - Short-term asset price fluctuations may not reflect long-term trends, and there are risks of deeper-than-expected economic downturns in Europe and the U.S.[4]

Market Overview - The US and China have suspended the implementation of a 24% tariff on each other's goods for 90 days, leading to a global stock market rally, with the ChiNext Index leading the gains[3] - The US July PPI increased by 0.9% month-on-month, significantly above the expected 0.2%, indicating rising inflationary pressures[3] - The 10Y US Treasury yield rose to 4.33%, while the US dollar index slightly declined, remaining below 100[3] Fund Flows - As of August 14, 2025, overseas active funds saw a net outflow of $1.36 billion, while passive funds experienced an inflow of $12.32 billion[3] - Domestic capital outflow reached $28.67 billion, contrasted by foreign capital inflow of $10.96 billion[3] Valuation Metrics - The ERP for the Shanghai Composite Index decreased from 63% to 59%, indicating a decline in valuation attractiveness[3] - The S&P 500, Dow Jones, Nasdaq, and Euro Stoxx 600 have ERPs of 2%, 2%, 6%, and 3% respectively, reflecting varying levels of market valuation[3] Economic Indicators - The US July CPI rose by 2.7% year-on-year, slightly below the expected 2.8%, while the PPI year-on-year was reported at 3.3% against an expectation of 2.5%[3] - The probability of a rate cut by the Federal Reserve in September increased to 92.10%, up from 88.90% the previous week[3] Risk Sentiment - The S&P 500 closed at 6449.80, above the 20-day moving average, with an implied volatility trend showing a decline[3] - The options market for the CSI 300 indicates a bullish sentiment, with 55% of its constituent stocks above the 5-day moving average[3]

Economic Overview - The Federal Reserve maintained the federal funds rate at 4.25% to 4.5% during the July FOMC meeting, marking the highest number of dissenting votes since the pause in rate cuts began this year[3] - July non-farm payrolls added only 73,000 jobs, significantly below the expected 104,000, with the unemployment rate rising to 4.2%[3] - The downward revision of May and June non-farm payrolls totaled 258,000, indicating a weakening labor market[3] Market Performance - Global equity markets experienced a downturn, with the S&P 500 closing at 6238.01, down 2.36% for the week[8] - The 10-year U.S. Treasury yield fell by 17 basis points to 4.23%, while the U.S. dollar index remained below 100, indicating a continued weak dollar environment[3][9] - The A-share index saw a majority decline, with the Hang Seng Tech index leading the losses, while only the Argentine index showed slight gains among emerging markets[3][8] Capital Flows - Significant capital inflows were observed in U.S. and European equity markets, while Chinese markets experienced substantial outflows, with domestic investors withdrawing $3.085 billion and foreign investors adding $882 million[3][14] - Over the past week, overseas active funds withdrew $285 million from Chinese markets, while passive funds saw inflows of $1.167 billion[3][14] Valuation Metrics - The ERP for the CSI 300 index rose to 64%, indicating a slight improvement in valuation compared to historical levels[3][12] - The risk-adjusted returns for the CSI 300 increased from 71% to 79%, while the S&P 500's risk-adjusted returns remained stable at 48%[3] Risk Sentiment - Despite significant adjustments in the U.S. stock market, retail investor sentiment remains optimistic, as indicated by a decrease in the put-call ratio from 1.13 to 1.00[3] - In the A-share market, over 50% of stocks are trading below their 30-day moving average, reflecting a shift in sentiment towards caution[3] Economic Data - The U.S. manufacturing PMI showed marginal weakness, while new orders PMI remained below the expansion threshold[3] - The probability of a Fed rate cut in September increased to 80.3%, with a 58.4% chance of a further cut to 3.75%-4.00% in October[3]

Market Overview - Global asset prices showed an upward trend, with the Nikkei 225 and ChiNext leading the gains, while most commodities experienced declines[4] - The S&P 500 closed at 6388.64, remaining above the 20-day moving average, indicating strong momentum[4] Capital Flows - As of July 24, 2025, overseas active funds saw a net outflow of $5.35 million, while passive funds recorded an inflow of $26.01 million[18] - Domestic capital experienced a net outflow of $1.41 million, contrasted by foreign capital inflow of $20.66 million[18] Valuation Metrics - The equity risk premium (ERP) for the A-share market decreased to a historical 60th percentile, with the Shanghai Composite Index's ERP dropping from 59% to 53%[4] - The ERP for the Hang Seng Index and the CSI 300 also saw declines, indicating a shift in valuation sentiment[4] Risk Sentiment - The Chinese options market reflects an optimistic pricing trend, with a notable increase in the volume of call options for the CSI 300 above the 4100 level[4] - The put-call ratio for the S&P 500 increased to 1.16, suggesting a cautious market sentiment and rising hedging demand[4] Economic Data - U.S. economic data for June indicates resilience, with a significant improvement in CPI and PMI figures, alleviating concerns over stagflation[4] - The probability of a Fed rate cut in September rose to 64.5%, reflecting market expectations for monetary easing[4]