Core Viewpoint - The article discusses the recent performance of the A-share and Hong Kong stock markets, highlighting the growth in technology stocks and the overall market trends, while also addressing the bond market's fluctuations and the significance of various indices in reflecting market conditions. Group 1: Market Performance - The A-share market saw a slight increase, closing at a rating of 4.3 stars [1] - Both large, medium, and small-cap stocks experienced minor gains with low volatility [2] - Growth style stocks slightly declined while value style stocks saw a minor increase [3] - Hong Kong stocks have continued to rise, particularly in the technology sector, with significant year-on-year profit growth in Q2 [4][5] Group 2: Bond Market Insights - The stock market remains robust, but the pure bond market has shown volatility [7] - Long-term pure bonds have continued to decline, with the 10-year government bond down 3% and the 30-year bond down 5% from their highs this year [9] - The current yield for the 10-year government bond is around 1.8%, which is not considered attractive at this time [11] Group 3: Historical Context of A-share Market - The Shanghai Composite Index reached a 10-year high in August, peaking at 3888 points, but has not surpassed the 2015 high of 5178 points or the 2007 high of 6124 points [14][15][17] - The bull market from 2005 to 2007 saw the index rise from under 1000 points to 6124 points, a sixfold increase, which has impacted long-term returns [18][20][22] - The index has shown long-term growth, particularly at the bottom points of bear markets, which are influenced by the fundamentals of listed companies [26][34] Group 4: Index Fund Dynamics - The number of index funds linked to the Shanghai Composite Index is significantly lower compared to those linked to the CSI 300 and CSI 500, with only 16 funds totaling 8.9 billion compared to 285 funds for CSI 300 totaling 1.3 trillion [38][39] - The underrepresentation of the Shanghai Composite Index in the fund market is attributed to its limited scope, only including stocks from the Shanghai Stock Exchange [42][44] - The majority of recent investments by state-owned entities have been in CSI 300 and CSI 500 index funds rather than the Shanghai Composite Index [45] Group 5: Future Outlook and Features - The article mentions the launch of new features for investment strategies, including an "automatic profit-taking" function for actively managed and enhanced index portfolios [53][54] - A new feature in the "Today Star" mini-program allows users to access core data and real-time valuations of mainstream ETFs, helping investors identify undervalued ETFs [57][60]

Core Viewpoint - The current market is experiencing a rotation between value and growth styles, with growth stocks showing strength during periods of value style weakness [6][7][8]. Market Performance - The large-cap stocks have slightly declined, while small-cap stocks have seen minor gains [2]. - The bank index has shown significant volatility recently, peaking at overvalued levels before a pullback [4][5]. - The overall market rating remains stable at 4.8 stars [1]. Historical Comparison - The current market conditions are reminiscent of the 2013-2014 bear market, characterized by weak fundamentals and high interest rates, which suppressed market performance [10][28]. - In 2014, a significant interest rate cut stimulated the economy, leading to a rapid increase in A-share prices [13]. - The market saw three major uptrends from 2014 to 2017, with financial stocks leading the first surge [14][15]. Style Rotation - The market has shown a tendency to rotate between value and growth styles, with growth stocks often outperforming during periods of value style underperformance [7][8]. - The current market environment has seen a similar pattern, with growth stocks gaining traction as value stocks lag [30]. Economic Indicators - There are signs of fundamental recovery in certain sectors, such as technology and pharmaceuticals, which have shown significant year-on-year profit growth [32][33]. - The overall economic environment remains challenging, with a decline in A-share company profits noted for 2024 [28]. Investment Strategy - The company emphasizes a strategy of buying during market dips and selling during peaks, while maintaining patience during stable periods [41]. - The introduction of new features in the "Today Star" app aims to assist investors in tracking ETF valuations and identifying investment opportunities [42][44].

Core Viewpoint - The article discusses the cyclical nature of various industries, particularly focusing on consumer, technology, and pharmaceutical sectors, highlighting their performance during different economic phases and the potential for recovery in the future [8][10][19]. Group 1: Market Performance - The overall market showed a slight decline at the opening but the drop narrowed by the close, with the CSI All Share Index experiencing a minor decrease [1]. - The CSI 300 Index saw a slight increase, while small-cap stocks faced more significant declines [2]. - Consumer stocks are on the rise, indicating a potential recovery in the sector [4]. Group 2: Sector Analysis - The technology sector in Hong Kong has recently experienced a downturn after weeks of gains, approaching a state of undervaluation [5][6][7]. - The pharmaceutical sector faced a decline in earnings from 2022 to the first half of 2024, but signs of recovery were noted in early 2024, with significant gains in the first quarter [11]. - The consumer sector has historically faced downturns during economic crises, such as the 2008 financial crisis and the 2012-2013 economic slowdown, but has also seen rapid recoveries following stimulus measures [13][16]. Group 3: Economic Cycles - The cyclical nature of industries means that periods of low earnings growth and low valuations are often followed by recovery phases where both earnings and valuations improve [26][28]. - The current consumer sector is compared to the pharmaceutical sector two years ago, indicating it is still in a low phase before a potential recovery [19][28]. - The article emphasizes that all sectors, including finance and energy, experience similar cyclical patterns, suggesting that investment opportunities arise during low periods [20][25].

Core Viewpoint - The article discusses the current market conditions, emphasizing the importance of understanding index valuation percentiles and the associated risks when making investment decisions. Market Overview - The major indices, such as the Shanghai and Shenzhen 300, have shown little fluctuation, while small-cap stocks have slightly declined [2][4]. - Value and dividend styles have seen minor increases, whereas growth styles have experienced slight declines [3][4]. - After a significant drop in early April, global markets have rebounded over the following weeks, but have recently entered a period of sideways movement [5][6]. Index Valuation Percentiles - The article highlights that percentile rankings can be a useful reference for current valuations in historical contexts [7][8]. - A 30% percentile indicates that 30% of historical valuations were lower than the current one [9]. Risks Associated with Percentile Valuation 1. **Short Historical Data**: Relying on a short time frame for index data can lead to misleading conclusions. Historical data should ideally encompass multiple market cycles [12][13]. - Solution: Use longer historical indices of similar styles for reference [14][15][16]. 2. **Changes in Index Rules**: Modifications in index selection criteria can alter valuation metrics, making historical comparisons less relevant [18][19][20]. - Solution: Recalculate historical valuations based on new rules [21]. 3. **Different Valuation Weighting Methods**: Variations in how indices calculate valuations can lead to discrepancies in percentiles. For example, the dividend index's valuation can differ significantly based on whether it is market-cap weighted or dividend-yield weighted [22][23][24][28]. - Solution: Calculate valuations based on the actual stocks held in the index [29]. 4. **Economic Downturns**: During economic slowdowns, declining earnings can artificially inflate price-to-earnings ratios, skewing percentile rankings [5][30]. - Solution: Use stable financial metrics for valuation when earnings are volatile [30][31]. New Features and Tools - A new feature in the "Today Stars" mini-program has been launched, allowing users to access ETF valuation tables and identify undervalued ETFs [32][35]. - The program provides real-time data on ETF valuations, including premium/discount rates and historical valuation data [35]. Investor Engagement - The article encourages investors to share their experiences and thoughts, particularly regarding the three-year anniversary of the investment strategy, highlighting the importance of perseverance during market downturns [40][41].