Core Insights - A significant market signal is emerging as the Zhongzheng 2000 Enhanced ETF (159552) has surpassed 1 billion yuan in scale, becoming the largest Zhongzheng 2000 index product on the Shenzhen Stock Exchange, indicating a major shift in investment tool preferences among funds [1][2] - The historical performance of small-cap growth styles suggests that three core factors drive their dominance: fundamental profit recovery, policy and industry cycle resonance, and a loose liquidity environment [2] Group 1: Market Dynamics - Current market conditions reflect a clear "historical reappearance" of the three core factors: ongoing growth policies, resilient infrastructure and manufacturing investments, and high export levels supporting profit recovery [2] - The resonance between policy and industry cycles is evident through clear technological innovation policies and various industry events, which are catalyzing new market hotspots [2] - The liquidity environment remains loose, with significant inflows into growth sectors such as pharmaceuticals, electronics, and machinery, as evidenced by the margin trading balance exceeding 2 trillion yuan, a ten-year high [2] Group 2: Performance Metrics - The Zhongzheng 2000 index has seen a nearly 68% increase over the past year, with a current valuation exceeding 146 times PE and 2.8 times PB, indicating high valuation levels [3] - The Zhongzheng 2000 Enhanced ETF has attracted a net inflow of 960 million yuan year-to-date, marking a nearly 4300% increase in shares, making it the fastest-growing ETF in the market this year [3] - Historical data shows that the Zhongzheng 2000 Enhanced ETF has consistently generated positive excess returns since its inception, with excess returns exceeding 6% in the first two quarters of this year [4]

Core Viewpoint - The China Galaxy Securities report highlights the outstanding performance of the CSI 2000 Enhanced ETF (159552), which achieved a net value growth rate of 29.18% in the first half of 2023, making it the top performer among similar broad-based ETFs. Since its inception, it has recorded a cumulative growth rate of 68.21% [1]. Performance Summary - As of July 9, 2023, the CSI 2000 Enhanced ETF (159552) has further increased its year-to-date growth to 33.20%, with a total growth of 74.30% since its launch in June 2022, significantly outperforming its peers [1][2]. Fund Flow Analysis - There has been a notable increase in the fund's scale, with only two trading days since June showing a decrease. The CSI 2000 Enhanced ETF (159552) has seen continuous growth for 13 trading days, indicating strong capital inflow [2]. Market Dynamics - The maturity of quantitative technology has made "enhanced" strategies more feasible. However, achieving the level of the CSI 2000 Enhanced ETF (159552) still requires significant skill from fund managers, indicating that its enhancement strategy is more effective than its peers [3]. Market Environment - The current market environment has favored small-cap stocks, which have been performing well since the beginning of the year. This has created a fertile ground for enhanced strategies to capture excess returns, particularly as small-cap indices align better with enhancement strategies compared to large-cap indices [3]. Pricing Inefficiencies - The CSI 2000 index is likened to a less monitored market, where many companies receive little attention, leading to frequent pricing errors. This environment allows enhanced strategies to identify undervalued stocks, buy them, and profit when the market corrects these mispricings [4]. Strategy Effectiveness - Small-cap stocks exhibit higher volatility, making it easier for enhancement strategies to capture short-term trends. The flexibility of these strategies allows for quick adjustments, providing a competitive advantage in a market filled with pricing errors [5]. Future Outlook - The CSI 2000 Enhanced ETF (159552) is showing potential for further gains, with the possibility of reaching new historical highs if liquidity remains ample in July 2023 [7].

Core Insights - The small-cap stocks continue to lead the market, with the CSI 2000 Enhanced ETF (159552) experiencing a 722% increase in scale and approximately 32% returns year-to-date, making it a dual champion among broad-based ETFs [1][3] - The CSI 2000 Enhanced ETF has shown over 73% returns in the past year, with its scale and net value reaching historical highs throughout the year, demonstrating consistent and stable enhancement capabilities [3][5] Performance Comparison - Since the beginning of 2025, the CSI 300 index has risen by less than 1%, while the CSI 2000 has increased by 15%, highlighting a significant performance gap [5] - Historical data indicates that during market uptrends, small-cap stocks tend to outperform larger-cap stocks, with small-cap stocks having a median elasticity coefficient of 1.73 compared to 0.92 for large-cap stocks from 2010 to 2024 [5] Market Drivers - The strong performance of small-cap stocks this year is attributed to favorable market conditions, including significant rallies in February and April, and the recent performance of sectors like military and innovative pharmaceuticals [5] - Continuous liquidity easing signals from the central bank have lowered market funding costs, making small-cap stocks more sensitive to liquidity changes, which has been a crucial factor in their rise [5] Future Outlook - The future performance of the CSI 2000 Enhanced ETF will depend on two key indicators: the progress of mergers and acquisitions among small-cap companies and the earnings growth and recovery of small-cap indices in the upcoming semi-annual reports [6] - If these indicators are favorable, it could accelerate the small-cap stock market, potentially providing significant upside for the CSI 2000 Enhanced ETF [6]

Core Viewpoint - The small-cap market is expected to continue its upward trend as long as the market remains accommodative, with significant performance observed in indices like the CSI 2000 and CSI 1000, which have outperformed major indices like the S&P 500 [1][9]. Group 1: Market Performance - As of July 3, 2025, the CSI 2000 index has achieved a year-to-date increase of 15.41%, outperforming the S&P 500 by nearly 7 percentage points [1][2]. - The CSI 1000 index also shows strong performance, indicating that small-cap stocks are currently leading the market [1][2]. Group 2: ETF Performance - The CSI 2000 Enhanced ETF (159552) has seen significant inflows, with a total of 600 million in large subscriptions despite recent market fluctuations [2]. - The 1000 Enhanced ETF (159680) has demonstrated a clear upward trend over recent months, with a cumulative excess return of 33.10% since its inception [5][6]. Group 3: Market Drivers - Three main factors are driving the small-cap bull market: high concentration of specialized and innovative companies in the CSI 2000 and CSI 1000 indices, supportive policies for technology growth, and the high liquidity sensitivity of small-cap stocks [7][9]. - The current market environment is characterized by a focus on long-term competitiveness rather than short-term gains, suggesting a more sustainable growth trajectory for small-cap stocks compared to previous bull markets [9][10].

Core Viewpoint - The small-cap style continues to show strength in the market, with the CSI 2000 Enhanced ETF (159552) and the 1000 ETF Enhanced (159680) both reaching new highs since their listing, driven by macroeconomic trends and industry upgrades [1][2][5]. Group 1: Small-Cap Style Performance - The CSI 2000 Enhanced ETF (159552) achieved a net value growth rate of 29.18% in the first half of the year, ranking first among broad-based ETFs, with an excess return of nearly 14% [1]. - The small-cap index turnover rate was 2.1% as of June 27, indicating a relatively high trading congestion level, while the small-cap to large-cap index turnover ratio was approximately 4.1 times, close to historical averages [5]. - The current price-to-earnings (P/E) ratio of the small-cap index to the large-cap index is 2.2 times, positioned at the 72.5% percentile since 2015, suggesting a favorable valuation environment for small-cap stocks [5]. Group 2: Macroeconomic and Industry Trends - The macroeconomic direction and industry upgrade trends are key signals for the rotation between small and large-cap stocks, with small-cap stocks showing relative advantages during periods of technological innovation and policy encouragement [2][4]. - The ongoing favorable environment for small-cap stocks is supported by the thriving sectors of AI and semiconductors, as well as continued policy support for the development of new productive forces [5]. Group 3: Enhanced ETF Performance - The CSI 2000 Enhanced ETF (159552) has consistently delivered excess returns since its establishment on June 29, 2024, with each quarter showing excess returns exceeding 6% in the first two quarters of this year [6]. - The 1000 ETF Enhanced (159680) has also demonstrated significant enhancement effects, achieving a cumulative excess return of 33.10% since its inception on November 18, 2022, with an annualized excess return of 11.88% [9][11]. - Both enhanced ETFs have shown strong adaptability to different market conditions, capturing excess returns during both downward trends and upward surges [8][11].

Core Viewpoint - The performance of the small-cap indices, particularly the CSI 2000 and CSI 1000, has outperformed larger indices like the CSI 300 and ChiNext, indicating a strong preference for small-cap stocks in a market characterized by ample liquidity and moderate economic fundamentals [2][4]. Group 1: Index Performance - The CSI 2000 index has achieved a year-to-date increase of 13.49%, while the CSI 1000 index has risen by 5.36%, outperforming U.S. stocks [2]. - The CSI 2000 Enhanced ETF (159552) has surged by 28.93%, exceeding the CSI 2000 index by 15.44%, and the CSI 1000 Enhanced ETF (159680) has increased by 13.56%, outperforming the CSI 1000 index by 8.20% [4]. Group 2: Market Conditions - The strong performance of these indices is attributed to multiple interest rate cuts and a clear stance from the central bank on maintaining a moderately loose monetary policy, which has enhanced market liquidity and favored technology growth [7]. - The CSI 1000 index is closely linked to concepts such as "specialized and innovative" and "new quality productivity," while the CSI 2000 index, with its smaller market capitalization, has greater elasticity, making it a favored target for funds in the absence of major market trends [7]. Group 3: Investment Strategies - The CSI 2000 Enhanced ETF has set 18 new historical highs this year, with a remarkable increase of 71% from last year, indicating strong excess returns [7]. - The ETFs utilize a three-layer enhancement mechanism to amplify returns: 1. Industry rotation through a quantitative model that captures hotspots like AI and high-end manufacturing [9] 2. Stock selection using a multi-factor model to identify undervalued small-cap stocks [9] 3. Risk control measures to limit industry deviation and manage tracking errors [9]. - Recent inflows into these ETFs suggest a market shift towards a more aggressive investment stance, making small-cap index-enhanced ETFs worthy of consideration for portfolio inclusion [9].

Core Viewpoint - The small-cap indices, represented by the CSI 1000 and CSI 2000, have shown strong performance with significant inflows into related ETF products, indicating a robust market sentiment and potential investment opportunities in these segments [1][2]. Group 1: Market Performance - The CSI 1000 index saw 9 stocks hitting the daily limit up, while the CSI 2000 had 28 stocks, reflecting a strong upward trend with respective gains of 0.47% and 0.72% [1]. - The CSI 1000 Enhanced ETF (159680) received a substantial inflow of 3 million in a single transaction, totaling a net inflow of 22.43 million over the past two trading days [1]. Group 2: ETF Performance - Both the CSI 1000 Enhanced ETF (159680) and the CSI 2000 Enhanced ETF (159552) have outperformed their benchmark indices, achieving excess returns of 7.36% and 13.41% respectively from the beginning of the year to June 25 [3]. Group 3: Driving Forces - The market's performance is driven by three main engines: 1. Liquidity and policy support, with multiple reductions in reserve requirements and interest rates enhancing market liquidity, benefiting small and micro enterprises [3][4]. 2. Enhanced strategies in ETFs that utilize active management to generate excess returns through industry rotation, stock selection, and risk control [6]. 3. A favorable environment for growth sectors, with policies supporting AI, robotics, military, semiconductors, and pharmaceuticals, aligning with the majority of the components in the CSI 1000 and CSI 2000 indices [4]. Group 4: Investment Strategy - The current market conditions resemble the bullish sentiment of September 2022, suggesting that growth stocks within the CSI 1000 and CSI 2000 indices are likely to be key focus areas for investors [7]. - Enhanced ETFs are positioned as offensive allocations in investment portfolios, with recommendations to balance risk by pairing with dividend or bank stocks for a better experience [8].

Core Viewpoint - The "Bank AH + Small Micro Plate" combination has reached a new high with a 21.76% increase by June 24, 2025, outperforming all Shenwan first-level industries [1] Group 1: Composition of the Combination - The combination consists of 40% Bank AH Preferred ETF (517900), 30% 1000 ETF Enhanced (159680), and 30% CSI 2000 Enhanced ETF (159552) [2] Group 2: Strengths of the Combination - The combination's strength lies in selecting bank stocks, which have consistently reached new highs this year, providing three advantages that other sectors cannot match [4] - Firstly, banks have a leading Return on Equity (ROE), with an average ROE of 10.2% for listed banks in 2024, and 14 banks exceeding 11%, including Chengdu Bank at 17.8% and Hangzhou Bank at 16.0% [5] - Secondly, the dividend yield of banks is strong, with most major banks yielding between 4% and 5%, while the 10-year government bond yield is below 2%, highlighting the superior return potential of bank stocks [7] - Thirdly, institutional investors are increasingly favoring banks, with significant investments from insurance funds and public funds, leading to a revaluation of bank stocks [8] - The Bank AH Preferred ETF (517900) employs a rotation strategy in the AH market, allowing it to select undervalued stocks dynamically, making it the only vehicle for investing in Hong Kong-listed banks [8][10] Group 3: Performance of Small Micro Plate - The CSI 2000 Enhanced ETF (159552) has achieved a 25.17% increase in 2025, outperforming its benchmark by 13%, with net value reaching new highs 17 times and a 256% growth in scale [11] - The 1000 ETF Enhanced (159680) has seen an 11.51% increase, exceeding its benchmark by nearly 8%, with net value reaching new highs 6 times [11] - The ongoing monetary easing by the central bank is favorable for small-cap stocks, particularly in sectors like AI, robotics, and domestic software, which have significant growth potential [13]

Core Viewpoint - Small-cap stocks are leading the market, with significant gains observed in various companies, driven by favorable policies and a low-interest-rate environment [1][3]. Group 1: Market Performance - Small-cap stocks such as Taihe Technology, Wavelength Optoelectronics, Sand Technology, and Yihau New Materials have reached their daily limit up [1]. - The CSI 1000 and CSI 2000 indices rose by 0.51% and 0.94%, respectively, indicating strong performance in the small-cap sector [1]. - The 1000ETF Enhanced (159680) and CSI 2000 Enhanced ETF (159552) have outperformed major indices this year, with significant gains of 48% and 61% since last year [8]. Group 2: Market Drivers - The market's strength is attributed to supportive policies, with the A-share market remaining robust above 3000 points, leading to a preference for small-cap stocks over large-cap stocks [3]. - Continuous liquidity and a low-interest-rate environment favor small-cap stock speculation, while market volatility allows enhanced index products to capture excess returns [3][8]. - The top five sectors in the CSI 2000 index include Machinery Equipment (11.5%), Electronics (9.1%), Computers (7.8%), Pharmaceutical Biology (6.7%), and Basic Chemicals (6.7%) [3]. Group 3: Future Outlook - There is potential for further gains in small-cap stocks due to ongoing supportive policies and the early-stage growth of industries like AI and robotics [8]. - The market's volatility continues to provide opportunities for quantitative strategies to identify undervalued small-cap stocks, enhancing the performance of the 1000ETF Enhanced and CSI 2000 Enhanced ETF [8]. - Investors are advised to consider entry points during market pullbacks and maintain a long-term holding strategy to increase the probability of profitability [9].

Core Viewpoint - The performance of small-cap indices, specifically the CSI 2000 and CSI 1000, has shown significant growth, with respective increases of 47.33% and 35.33% since September 2022, indicating a strong market trend for small-cap stocks [1][5]. Group 1: Index Performance - The CSI 2000 Enhanced ETF (159552) and CSI 1000 Enhanced ETF (159680) have outperformed their respective indices, with gains of 61.75% and 49.45%, surpassing the CSI 2000 and CSI 1000 by 14.42% and 14.12% [3]. - Recent data shows a slight pullback in the CSI 1000 and 2000 indices, but fund managers are still optimistic about small-cap stocks, as evidenced by increased allocations to small-cap positions despite an overall decrease in equity fund holdings [5]. Group 2: Historical Trends and Future Outlook - An analysis of the past three years indicates that the CSI 1000 and 2000 indices have moved in close correlation, with the CSI 1000 still having room to rise towards its historical peak [8]. - The CSI 1000 Enhanced ETF (159680) has consistently delivered excess returns relative to its benchmark, achieving an annualized excess return of 11.07% since inception, demonstrating resilience even in down markets [10]. Group 3: Market Conditions and Policy Support - The current monetary policy, including recent reserve requirement ratio cuts by the central bank, has increased liquidity in the market, which historically benefits small-cap stocks due to their reliance on financing and sensitivity to interest rates [10]. - Government support for "new productive forces" such as AI, robotics, and domestic chips aligns well with the constituents of the CSI 1000 and 2000 indices, providing a favorable environment for growth [12]. Group 4: Investment Strategy - Investors are advised to stagger their investments over 3-5 months to mitigate the risk of market timing, suggesting a long-term holding strategy to maximize profit potential [14].