Core Viewpoint - The recent rise of A-shares above 3800 points presents an opportunity for investors to reassess their portfolios, emphasizing the importance of a diversified asset allocation strategy to navigate market volatility and potential downturns [4][6]. Group 1: Market Sentiment and Fund Performance - Despite the current bullish market sentiment and many funds reaching historical highs, a significant number of investors redeemed their holdings before the market's upswing, leading to missed opportunities [6]. - Data indicates that from 2022 to 2024, the net subscription scale of equity funds has continuously shrunk, with net redemptions peaking in the first quarter and fourth quarter of 2024 [6]. Group 2: Volatility and Historical Performance - The Shanghai Composite Index has a compound annual growth rate of 11.6% since its inception in 1990, but it also has an annualized volatility of 43.71%, which is significantly higher than many global indices [10][11]. - Since 2014, the annual maximum drawdown for the CSI 300 and equity fund indices has exceeded 15% in about 60% of the years, highlighting the challenges of long-term holding for domestic investors [12]. Group 3: Timing Strategies and Their Challenges - The desire to time the market is common among investors, but the reality often leads to missed opportunities, as evidenced by the significant drop in annualized returns when missing the best-performing days [16][18]. - From 2014 to the present, maintaining a position in equity funds yields an average annual return of around 15%, but missing the top-performing days drastically reduces this return [16][18]. Group 4: Asset Allocation Strategies - Given the high volatility of the A-share market, a diversified asset allocation strategy is recommended to mitigate risks and enhance returns [22]. - Different asset classes exhibit varying risk-return characteristics, and combining low or negatively correlated assets can help reduce overall portfolio volatility [22][24]. Group 5: Simulation of Asset Allocation - Simulations show that adjusting the asset allocation to include dividend stocks and global indices can lead to smoother net value curves and reduced drawdowns during market downturns [30][32]. - Incorporating bonds into the asset mix further stabilizes the portfolio, increasing the likelihood of maintaining positions during market fluctuations [35][37]. Group 6: Importance of Diversification - Diversification in asset allocation is emphasized as a crucial strategy for investors, with notable figures in finance advocating for a mix of uncorrelated return streams to enhance portfolio performance [38].

Core Viewpoint - The article emphasizes the importance of constructing a diversified asset allocation strategy to navigate the volatility of the A-share market, especially as it recently surpassed the 3800-point mark. Investors should prepare for both gains and losses, as the market does not guarantee a one-way upward journey [2]. Group 1: Market Sentiment and Investor Behavior - Despite the current bullish sentiment and many funds reaching historical highs, numerous investors redeemed their holdings before the market's rise. Data shows that from 2022 to 2024, the net subscription scale of equity funds continuously shrank, with significant net redemptions in the first and fourth quarters of 2024 [3][4]. - Many investors did not endure the market downturn alongside their funds, resulting in missed opportunities for recent gains [3]. Group 2: Market Volatility and Challenges - The Shanghai Composite Index has a compound annual growth rate of 11.6% since its inception in 1990, but it also has an annualized volatility of 43.71%, which is significantly higher than many other global indices [7]. - Since 2014, the annual maximum drawdown for the CSI 300 and equity fund indices has exceeded 15% in about 60% of the years, with the ChiNext Index experiencing over 15% drawdowns every year since 2014 [8][9]. Group 3: Timing Strategies and Their Limitations - Investors often wish to time the market to buy low and sell high, but this is frequently counterproductive. Missing just a few of the best-performing days can drastically reduce annualized returns [11][14]. - From 2014 to the present, holding equity funds consistently yields an average annual return of around 15%, but missing the top-performing days can lead to significantly lower or even negative returns [14][16]. Group 4: Asset Allocation Strategies - The article suggests that different asset types have varying risk-return characteristics, and a reasonable asset allocation can help reduce portfolio volatility and alleviate the need for timing the market [20]. - Simulations show that adjusting asset allocations, such as incorporating dividend assets and global indices, can lead to smoother net value curves and reduced drawdowns during market declines [24][26][30]. - A final portfolio that includes a mix of equity funds, dividend indices, global indices, gold, and bonds demonstrates significantly improved performance and reduced volatility compared to a portfolio solely invested in equity funds [33][35]. Group 5: Importance of Diversification - The article highlights that diversification in asset allocation is crucial for investors, as it provides the necessary resilience to endure market downturns and ultimately benefit from long-term gains [36]. - The concept of diversification as a "free lunch" in investing is supported by notable figures in finance, emphasizing the need for a well-rounded investment approach [37].

Core Viewpoint - The article emphasizes the value of systematic investment plans (SIPs) or dollar-cost averaging, highlighting how consistent investments during market fluctuations can lead to significant long-term gains, even when starting at market highs [2][4][28]. Group 1: Historical Performance of SIPs - A historical example from 1997 shows that an investor who consistently invested $1,000 monthly in a fund during a market downturn ended up with a 41% profit after two years, despite an 80% drop in fund value [4]. - A simulation from 2015 to 2021 indicates that investors who started SIPs at the peak of the A-share market could achieve a 72% return, outperforming the Shanghai Composite Index by 102 percentage points [4][12]. Group 2: Recent Performance Analysis - Data from various indices over the past five years shows that investors who maintained SIPs during market volatility achieved positive returns, while those who made lump-sum investments often faced losses [13][26]. - For instance, SIPs in the CSI 1000 index yielded a total return of 19.58% compared to a loss of 0.28% for a one-time investment [12][26]. Group 3: Performance Over Different Time Frames - In the past year, SIPs yielded returns between 10% and 24%, while lump-sum investments achieved returns of 33% to 69%, indicating that while lump-sum investments can outperform in a strong rebound, SIPs provide a more stable approach during uncertain times [18][22]. - Over three years, SIPs consistently outperformed lump-sum investments across most indices, with the CSI 1000 index showing a return of 22.58% for SIPs versus 12.70% for lump-sum investments [21][22]. Group 4: Long-Term Advantages of SIPs - The article highlights that over five years, SIPs demonstrated a clear advantage, with all indices showing positive returns for SIPs, while many lump-sum investments remained in the red [26][28]. - The consistent investment strategy allows investors to accumulate shares at lower prices during market downturns, which can lead to substantial gains when the market recovers [29][30]. Group 5: Key Takeaways on SIPs - SIPs are portrayed as a strategy that mitigates the risks associated with market timing, allowing investors to avoid the psychological pressures of trying to "time the market" [29][30]. - The article concludes that while SIPs are not without risks and require a long-term commitment, they can be a more effective strategy for building wealth over time compared to waiting for perfect market conditions [30][31].

Core Viewpoint - The article discusses the significance of the three-year annualized return of equity funds as a timing indicator for market trends, particularly in the context of the recent bull market in A-shares [2][11]. Group 1: Historical Context and Analysis - The three-year annualized return of equity funds has been a focal point since the first wave of the bear market in 2022, highlighted by investor Dong Chengfei [3][4]. - Historical peaks of the three-year annualized return occurred in 2015 and 2021, both exceeding 30%, indicating a doubling of total returns over three years [4][17]. - The article references past bull and bear market cycles, noting that bull markets typically last between 2 to 3 years and 2 months [15]. Group 2: Future Projections - The author suggests that the bottom of the current bear market may occur in early 2024, with potential subsequent lows in mid-2024 [8][22]. - The analysis indicates that if the bear market bottom is established in early 2024, a three-year projection could lead to a peak around early 2027, assuming a minimum return of 30% [20][24]. - The potential for a bull market is further supported by the observation that the current three-year rolling annualized return is still negative, suggesting that the market has not yet reached a bubble phase [24][32]. Group 3: Market Dynamics and Fund Performance - The article notes that the equity fund index has seen a cumulative increase of 46.8% since its bottom on February 5, 2024 [28]. - To achieve a three-year annualized return of 30%, a potential increase of 49.66% is required, emphasizing the importance of compounding effects [30][32]. - The performance of equity funds may not align perfectly with the broader A-share market, indicating that future trends could diverge based on market conditions [30][32].

Core Viewpoint - The article discusses the behavior of mutual fund investors as the Shanghai Composite Index surpasses 3600 points, emphasizing the need for investors to reassess their strategies and avoid impulsive decisions based on short-term market fluctuations [3][4]. Investor Behavior and Challenges - Many investors exhibit a "redemption upon breakeven" mentality, which reflects a fundamental misalignment in their investment understanding and behavior [5][6]. - Behavioral finance concepts such as "loss aversion" and "anchoring effect" contribute to this mindset, leading investors to make irrational decisions based on short-term price movements rather than long-term potential [6][7]. - The lack of a clear long-term investment plan often results in investors being swayed by market volatility, creating a cycle of holding during losses and redeeming upon minor gains [6][7]. Proposed Solutions - Investment advisory firms suggest focusing on "investor account profitability" and aligning investment strategies with reasonable time horizons to mitigate losses from mismatched funding [7]. - Fund companies and sales channels are encouraged to enhance investor education, improve communication, and create mechanisms that align the interests of fund managers and investors [7]. Differentiated Strategies for Various Investor Scenarios - For investors who have returned to profitability, it is recommended to "lock in profits" partially before making further decisions, especially if the fund's long-term performance is stable [9][10]. - Investors who are still at breakeven but with minimal gains should evaluate valuation levels and industry trends to make informed decisions about adjusting their positions [10]. - Investors who are still "underwater" may consider averaging down if the fund's fundamentals remain strong, while those with deteriorating fundamentals should consider cutting losses [10]. - For investors with no positions or light positions, a gradual entry strategy is advised, focusing on low-volatility products initially [11]. Portfolio Review and Adjustment - Investors are encouraged to reassess their fund holdings, ensuring alignment with their initial investment strategies and risk tolerance [12][13]. - Key factors to consider include industry diversification, equity-to-bond ratios, and the stability of fund managers' investment styles [13][14]. - Continuous evaluation of fund performance against peers is crucial, particularly in volatile market conditions [14]. Market Outlook and Investment Discipline - The current market environment is characterized as an "investment new cycle," with a recommendation for investors to maintain patience and adhere to investment discipline [25][26]. - Investors are advised to manage their funds across different time horizons and to engage in systematic investment approaches like dollar-cost averaging [30][31]. - Emphasis is placed on the importance of constructing a well-diversified portfolio to mitigate risks associated with market fluctuations [31].

Market Pricing Status - The trading heat in the market has slightly declined, with turnover rates decreasing and net capital inflows reducing [8][24][28] - The average daily trading volume for the entire A-share market decreased to 18.1 billion, down from 18.5 billion the previous week [8] - The proportion of stocks rising in the A-share market dropped to 31.9%, with a median weekly return of -1.48% [8][9] A-Share Liquidity Tracking - ETF outflows have accelerated, with overall capital inflows slowing down [24][28] - The new issuance scale of equity funds decreased to 8.87 billion, down from 19.41 billion [35] - Foreign capital inflow into the A-share market was 25.9 million USD, with the northbound capital transaction proportion dropping to 11.6% [46][48] A-Share Industry Allocation - Financing capital is flowing into the pharmaceutical and electronics sectors, while foreign capital is entering the banking sector [3][46] - The net inflow for the pharmaceutical sector was 6.7 billion, and for electronics, it was 6.06 billion [3] - The ETF capital flow showed net inflows in food and beverage (+0.95 billion) and coal (+0.22 billion), while electronics (-11.09 billion) and pharmaceuticals (-6.46 billion) experienced net outflows [3][46] Hong Kong and Global Capital Flow - Southbound capital inflows increased, with net purchases rising to 59.02 billion, the highest since 2022 [4][48] - The Hang Seng Index fell by 3.5%, with major global markets also experiencing declines, particularly the French CAC40 index, which dropped by 3.7% [4][48] - Foreign capital primarily flowed into developed markets, with the US receiving 4.06 billion and the UK 0.98 billion [4][48]

Macroeconomic Liquidity and Capital Prices - The central bank maintained a net injection of 129.5 billion CNY, continuing to support the liquidity environment[10] - The money market rates have increased, with R007 rising by 18.7 basis points and DR007 by 14.6 basis points[13] - Bond market yields are under pressure, with 1Y and 10Y government bond yields increasing by 3.45 and 6.72 basis points respectively[13] Microeconomic Liquidity and A-share Market - A-shares experienced a net inflow of 46.6 billion CNY, primarily driven by significant inflows of leveraged funds[21] - Retail investors showed increased activity, with net inflows of 78.6 billion CNY, a rise of 26.2 billion CNY from the previous period[24] - Leveraged funds saw a net inflow of 444 billion CNY, marking a significant increase in market risk appetite[28] Fund Flows and Public Offerings - New issuance of equity funds reached 19.4 billion CNY, an increase of 6.8 billion CNY from the previous period[39] - Equity ETFs experienced a net outflow of 58.3 billion CNY, while industry-themed ETFs saw a net inflow of 115.1 billion CNY[40] - The total supply of funds was 58 billion CNY, up 35.9 billion CNY, while total demand decreased to 11.3 billion CNY, down 16.4 billion CNY[21] Risk Factors - Economic recovery may fall short of expectations, potentially increasing market uncertainty[65] - Geopolitical events could escalate tensions, impacting domestic and international markets[65] - Statistical data discrepancies may lead to inaccuracies in market assessments[65]

Market Overview - The trading heat continues to rise, with new issuance of equity funds and accelerated inflow of financing funds, while retail investor activity increases and foreign capital turns to outflow [1][2] - The average daily trading volume exceeds 1.5 trillion, indicating a marginal increase in market sentiment [1] Market Sentiment - Market sentiment is on the rise, with the average daily trading volume of the entire A-share market exceeding 1.5 trillion, and the turnover rate of the Shanghai Composite Index falling to 88% [1] - The number of daily limit-up stocks has decreased to 59, with the maximum consecutive limit-up stocks being 8, and the sealing rate dropping to 70.2% [1] Fund Flows - New issuance of public equity funds has increased to 12.6 billion, with an ordinary stock position rising by 0.1% [2] - Foreign capital has seen a net outflow of 1.4 million USD, with the northbound capital transaction proportion dropping to 11.6% [2] - The net inflow of financing reached 28.57 billion, with the transaction proportion rising to 9.7% [2] Industry Allocation - There is a notable divergence in funding within the electronics sector, with financing and ETF allocations increasing while foreign capital allocation decreases [3] - The net inflow in financing for the computer sector is 4.42 billion and for the electronics sector is 3.07 billion [3] - The non-bank financial sector and media sectors saw net inflows of 0.71 billion and 0.57 billion respectively in ETFs [3] Hong Kong and Global Fund Flows - The southbound capital inflow has decreased to 21.46 billion, representing the 76th percentile since 2022 [4] - Global foreign capital primarily flows into developed markets, with the US and Japan seeing inflows of 3.02 billion and 1.16 billion respectively [4]

Core Viewpoint - The article discusses the performance of dividend assets compared to growth assets in different market phases, highlighting the potential risks of dividend assets under certain market conditions, particularly during bull markets [4][26]. Market Phases Analysis - From 2014 to present, dividend assets have shown low volatility and steady growth, while growth assets like the ChiNext have experienced more dramatic fluctuations [6]. - In the early bull market phase (2014-2015), the dividend index rose by 177%, but growth stocks outperformed with a 194% increase in the ChiNext index [8]. - During the 2015 stock market crash, the dividend index fell by 44%, similar to the declines in the CSI 300 and ChiNext indices [11]. - In the structural bull market phase (2016-2017), the dividend index increased by 44%, matching the CSI 300, while the ChiNext index only rose by 6% [14]. - In the bear market of 2018, the dividend index decreased by 25%, but it had the smallest decline compared to other indices [17]. - From 2019 to 2021, the dividend index only increased by 24%, significantly lagging behind the ChiNext's 170% rise [19]. - During the adjustment period (2021-2022), the dividend index fell by 4%, outperforming the CSI 300 and ChiNext indices [21]. - In the current oscillation phase (2022-2024), the dividend index has risen by 4%, while other indices have declined [23]. - Looking ahead to the potential explosive phase starting in Q4 2024, the dividend index is expected to lag behind growth styles due to a lack of valuation elasticity [25]. Investment Strategy Insights - The article concludes that while dividend assets may underperform in bull markets driven by risk appetite, they can perform well in structural bull markets where both valuation and earnings recover [26]. - Historical market trends indicate that a balanced asset allocation is essential for navigating different market environments and achieving sustainable returns [27].

Core Insights - The report emphasizes the positive stance on macroeconomic growth and stock market stability, which benefits the non-bank financial sector, particularly brokerage firms and financial information services [3] - The insurance sector is expected to see stable growth in liabilities and improved asset performance, with a focus on equity flexibility and economic recovery catalysts [3] Group 1: Brokerage and Multi-Financial Sector - The brokerage sector's net profit for listed firms reached 144.8 billion in 2024, a year-on-year increase of 16%, with Q1 2025 showing a significant 85% increase to 51.7 billion [4] - Brokerage firms with strong retail advantages and high dividend yields are highlighted as having attractive valuations, especially those with a net profit growth driven by brokerage and investment businesses [4] - Recommended stocks include high beta financial information service providers like Guiding Compass and Dongfang Wealth, as well as leading brokerages such as Guosen Securities and China Galaxy [4] Group 2: Insurance Sector - The insurance sector is facing pressure on both the asset and liability sides, but there is potential for stable growth in new business value (NBV) due to improved product offerings and declining liability costs [5] - The report suggests that the insurance sector's valuation remains low, with a focus on companies like China Pacific Insurance and China Life, which are expected to benefit from ongoing economic stabilization measures [5] - The anticipated increase in equity asset allocation by listed insurance companies is expected to enhance performance, particularly in the property insurance segment [5] Group 3: Market Data - The market turnover rate has remained high, with a 32% year-on-year increase in new account openings in Q1 2025, indicating strong retail investor engagement [14] - The margin financing scale reached 1.91 trillion, maintaining a high level, with trading ratios in a reasonable range [18] - New equity fund issuance in Q1 2025 reached 110.2 billion, a 102% year-on-year increase, driven by the popularity of ETF products [22]