Core Insights - The underlying logic of commodities and liquor is interconnected, primarily revolving around the trading of Federal Reserve QE, which is expected to lead to increased dollar liquidity by 2026, marking the beginning of a new cycle for the liquor industry [1][11]. - The probability of the Federal Reserve initiating QE significantly increases by mid-2026, driven by the current administration's push for interest rate cuts, which are anticipated to alleviate inflationary pressures in the U.S. [2][14]. - Once the Federal Reserve begins QE, the People's Bank of China is expected to follow suit with debt monetization, leading to a recovery in the real economy and a return to prosperity in 2026 [3][20]. Group 1: Commodity and Liquor Logic - The current commodity supercycle is driven by the expectation of rampant dollar liquidity due to the Federal Reserve's QE, which will also enhance the appeal of commodities with monetary and safety attributes [1][11]. - The initiation of QE by the Federal Reserve is anticipated to prompt the People's Bank of China to quickly implement debt monetization, thereby improving the balance sheets of the real economy and enhancing consumer capacity and willingness [1][11]. Group 2: Federal Reserve's QE Probability - The current administration's core demand for interest rate cuts is expected to lead to a significant reduction in inflationary pressures, which will likely force the Federal Reserve to initiate QE [2][14]. - By mid-2026, the Federal Reserve is projected to face a liquidity crunch that may compel it to expand its balance sheet through QE, marking a critical window for such actions [2][16]. Group 3: Liquor Industry Revival - The liquor industry has experienced four cycles since 2003, and the anticipated QE in 2026 is expected to initiate a new cycle, driven by a return to prosperity and increased consumer spending [4][25]. - The combination of Federal Reserve interest rate cuts and a strengthening yuan is expected to accelerate the return of national wealth, thereby enhancing consumer demand and initiating a new cycle for the liquor industry [7][28]. Group 4: Investment Recommendations - The report suggests focusing on sectors that will benefit from the anticipated QE, including oil, chemicals, liquor, and high-end manufacturing, as the market is expected to reach new highs [8][31]. - Specific investment strategies include emphasizing metals, consumer goods, and high-end manufacturing sectors that are poised to benefit from the return of cross-border capital and improved consumer sentiment [8][31].

Core Viewpoint - The report outlines the performance and investment strategy of the Galaxy and Beautiful Life Mixed Securities Investment Fund for the second quarter of 2025, emphasizing its focus on long-term stable growth through investments in high-quality companies aligned with the "Beautiful Life" theme, which includes health, happiness, and safety aspects [1][2][3]. Fund Overview - The fund aims to achieve long-term stable appreciation of assets while controlling investment risks by selecting high-quality, growth-oriented companies that fit the "Beautiful Life" theme [2]. - The investment strategy includes asset allocation, stock investment, bond investment, asset-backed securities, stock index futures, warrants, and depositary receipts [2]. Investment Theme - The "Beautiful Life" theme focuses on three dimensions: - Health: Industries related to health such as food and beverage, textiles, and pharmaceuticals [3]. - Happiness: Industries enhancing life satisfaction, including leisure services, TMT (Technology, Media, and Telecommunications), transportation, and new energy [3]. - Safety: Industries that enhance life security, such as real estate, finance, and national defense [3]. Performance Metrics - The fund's performance benchmark is a combination of the CSI 800 Index return (70%) and the CSI All Bond Index return (30%) [4]. - The fund's risk-return profile is higher than money market and bond funds but lower than equity funds [4]. Financial Indicators - As of the end of the reporting period, the total fund shares amounted to 273,812,775.13 [2]. - The net value growth rates for the Galaxy and Beautiful Life Mixed A and C funds were -5.88% and -6.02%, respectively, against a benchmark return of 1.52% during the same period [11]. Asset Allocation - The fund's asset allocation at the end of the reporting period was primarily in stocks, accounting for 86.65% of total assets, with no investments in bonds or asset-backed securities [12]. - The largest sector allocation was in the information transmission, software, and IT services sector, comprising 52.02% of the fund's net asset value [12]. Fund Management - The fund manager, Galaxy Fund Management Co., Ltd., has committed to managing the fund with integrity and diligence, adhering to legal regulations and aiming for the long-term benefit of fund shareholders [9][10].