Core Viewpoint - The recent recovery of the Shanghai Composite Index to 4000 points after ten years is primarily driven by the restoration of confidence in the capital market, supported by favorable policies and events that have encouraged increased investment in high-quality Chinese assets [1] Market Performance - As of November 3, the Shanghai Composite Index has risen nearly 19% year-to-date, marking six consecutive months of gains, with the metals sector being the biggest winner, leading the market with a 73.77% increase [1] - The industrial non-ferrous metals theme index has outperformed the broader sector, achieving a year-to-date increase of 74.57%, while the corresponding ETF has surged by 78.08% [2] ETF Development - The industrial non-ferrous ETF, launched in February 2023, has seen its assets grow to over 5.5 billion yuan, a nearly 15-fold increase from the previous year, making it one of the most explosive niche ETFs this year [2] - The ETF's success is attributed to its focus on pure industrial metals, avoiding distractions from energy and precious metals, thus aligning closely with macroeconomic trends and manufacturing demand [2][3] Investment Strategy - The ETF's index was refined to focus solely on industrial metals, with a significant increase in the weight of industrial and minor metals to 80.9%, making it the only ETF in the market with a pure industrial metal focus [3] - The revised index has shown a year-to-date increase of 81.73% and a rolling P/E ratio of 20.02, lower than the broader non-ferrous metals index [4] Market Trends - The industrial non-ferrous metals sector's performance is driven by fundamental improvements in corporate earnings and supply-demand dynamics, contrasting with other sectors that may be influenced by speculative factors [4] - The ETF has demonstrated resilience during market fluctuations, with less volatility compared to tech growth assets, indicating a more stable investment foundation [5] Future Outlook - The long-term outlook for the industrial non-ferrous metals sector is positive, supported by anticipated interest rate cuts by the Federal Reserve and recovering domestic demand in real estate and infrastructure [6] - Current valuations of related companies are low, with clear potential for earnings improvement, highlighting significant investment value [6] Market Dynamics - The ETF market is experiencing structural differentiation, with a notable increase in niche ETFs like the industrial non-ferrous ETF, while broader ETFs face stagnation or decline [7] - Companies are increasingly seeking differentiated strategies, focusing on value-driven products that address specific investor needs rather than expanding product lines indiscriminately [7][8] Product Innovation - The company has identified three market gaps: lack of precise coverage for small-cap stocks, absence of stable cash flow products, and opportunities in the Hong Kong stock market [8][9] - Solutions include launching the first national small-cap ETF, a monthly dividend ETF, and a Hong Kong innovation drug ETF, all of which have performed well in the market [9][10] Competitive Advantage - The success of the boutique ETFs is supported by a robust framework of team expertise, technological capabilities, and a strong organizational culture [11][12] - The company emphasizes a combination of active research and passive tracking, ensuring that products meet real market demands while maintaining a focus on risk management [12][13] Conclusion - The evolution of the ETF market towards boutique offerings reflects a shift from supply-driven to demand-driven strategies, emphasizing the importance of precision in meeting investor needs [13]