Report Industry Investment Rating The document does not provide a specific industry investment rating. Core Viewpoints of the Report - Future investment strategy suggests balanced style allocation, emphasizing technology, non - banking, and consumption sectors. For stock funds, A - share market may have a spring "good start" with policy expectations, liquidity, and fundamentals improving. For bond funds, short - term negative factors are repaired, but mid - term structural optimization is incomplete. Money funds have no trend investment opportunities in the long - term low - interest environment [3][4]. - Last week, the A - share market continued its upward trend and had a good start, with satellite, AI application, and non - ferrous sectors performing well. The bond market declined, the US stock market reached a new high, and oil and gold prices rose due to geopolitical risks. Funds heavily invested in medical, semiconductor, and military sectors performed well [4][6][7]. Summary by Related Catalogs 1. Last Week's Market Review - **A - share Market**: Continued the upward trend and had a good start during 20260105 - 20260111. Satellite, AI application, and non - ferrous sectors were strong. The satellite sector's popularity and IPO benefits drove the military sector; AI company listings on the Hong Kong Stock Exchange boosted the AI application sector; the US military action in Venezuela affected non - ferrous metal supply and pushed up the sector. The Shanghai Composite Index rose 3.82% to 4120.43, and the Shenzhen Component Index rose 4.40% to 14120.15. The trading volume was 14.13 trillion yuan, with a daily average increase of about 1.56 trillion yuan compared to the previous week. Among industries, defense, media, non - ferrous, computer, and medical sectors led the increase [4][6][7]. - **Bond Market**: Declined as the strong A - share market suppressed it. The 1 - year Treasury yield dropped 5BP to 1.29%, and the 10 - year Treasury yield rose 3BP to 1.88%. Credit spreads narrowed. The ChinaBond Aggregate Net Price Index fell 0.24%, while the CSI Convertible Bond Index rose 4.45% [4][8]. - **Overseas Market**: The US stock market reached a new high, with the Dow Jones Industrial Average rising 2.32%, the S&P 500 rising 1.57%, and the Nasdaq rising 1.88%. European and most Asian markets also rose, except for the Hang Seng Index which fell 0.41%. The US dollar index rose 0.69%. Geopolitical risks from the US military action in Venezuela increased oil and gold prices [4][9]. 2. Last Week's Fund Market Review - **Stock Funds**: Rose 4.92%. Some funds heavily invested in medical, semiconductor, and military sectors performed well. Index funds related to satellite, semiconductor, and media themes did well [4][10][11]. - **Bond Funds**: Rose 0.29%. Partial - debt funds and convertible bond funds with semiconductor and computer in their equity allocation performed well. Among pure - debt funds, those mainly investing in high - grade credit bonds and medium - short - term bonds did better [4][10][11]. - **QDII Funds**: Equity QDII funds rose 2.62%, with funds mainly investing in medicine and semiconductor themes performing well. QDII bond funds rose 0.10% [4][10][12]. - **Money Funds**: Had an annualized yield of 1.58%. Different types of摊余成本法债 funds had different yields [11]. - **Gold ETF and Linked Funds**: Rose 2.85%. Commodity funds rose 2.64% [13]. 3. Future Investment Strategy - **Stock Market**: Policy expectations, liquidity, and fundamentals are expected to improve, and the A - share market may have a spring "good start". Industries with good prospects are technology, non - banking, and consumption. It is recommended to have a balanced style allocation and focus on these sectors [4][14][15]. - **Bond Market**: Short - term negative factors are repaired, but mid - term structural optimization is incomplete. It is recommended to focus on interest - rate bonds with flexible durations and products that mainly invest in high - grade and highly liquid credit bonds [4][15]. - **Money Market**: There are no trend investment opportunities in the long - term low - interest environment [4][15]. - **Commodity Market**: It is advisable to appropriately allocate gold ETFs for long - term and hedging investments [15]. 4. Latest Fund Market Developments - **QDII Quota**: Under the background of promoting inclusive finance, QDII quotas should be more used in public - offering products. Fund companies need to adjust the proportion of QDII quotas used in public - offering and private - placement products, reducing the private - placement quota ratio to within 20% by the end of 2027 and completing at least half of the adjustment by the end of 2026 [17]. - **Fund Sales Fee Regulations**: The official version of the regulations relaxes the redemption fee constraints for bond funds and fine - tunes the subscription and purchase fees. Bond ETFs may become important tools for liquidity management and trading by wealth management institutions. Wealth management funds may gradually increase their allocation to equity funds, with broad - based index funds and low - volatility "fixed - income +" products being more popular [18]. - **Newly Issued Funds**: 11 new funds were established last week, including 3 low - position ordinary FOF funds, 2 strong - equity hybrid funds, 2 stock ETFs, etc. The average subscription days were about 12 days, and the average raised share was 7.45 billion, with a total of 81.91 billion shares [19]. - **Upcoming Fund Dividends**: 99 funds will conduct equity registration in the coming week. The most notable is the Chang Sheng Aerospace and Marine Equipment A, with a dividend of 2.764 yuan per 10 shares [20].

Core Insights - The active equity funds experienced a remarkable performance in 2025, with 94.91% of all funds generating positive returns, and 96.64% of active equity funds achieving positive returns over one year [3][4] - The emergence of "doubling funds" was a significant highlight, with 60 funds, including 51 active equity funds, achieving over 100% cumulative returns [4][5] - The strong performance of active equity funds is closely linked to the structural trends in the A-share market, particularly in technology sectors such as optical modules, PCB, cloud computing, and innovative pharmaceuticals [3][5] Fund Performance - Among active equity funds, Yongying Technology Smart Selection A led with a return of 223.14%, making it the only fund to achieve "doubling" status [5] - Other notable performers included AVIC Opportunity Navigator A with 156.48% and Hengyue Advantage Selection A with 141.96% [5] - A total of 3419 funds outperformed their benchmark returns, representing 78.26% of the active equity funds [3] Market Trends - The "doubling funds" phenomenon is characterized by a clear structural market trend, with most funds heavily invested in the "computing power" industry chain, particularly in optical modules [5][6] - The communication sector emerged as a significant winner among passive index "doubling funds," with several funds achieving returns exceeding 110% [6] New Entrants and Management - The emergence of new fund managers was notable, with the average management tenure of fund managers for the "doubling funds" being only 3.01 years, and 43.33% having less than two years of experience [7][8] - Despite the high returns associated with newer fund managers, experienced managers also delivered strong performances, indicating a diverse range of expertise contributing to the success of these funds [8] Fund Management Companies - E Fund emerged as the largest winner in 2025, managing nine "doubling funds," with E Fund Rui Xiang I achieving the highest return of 119.38% [10] - Smaller fund companies also contributed significantly to the "doubling funds," with several achieving impressive returns despite their lower rankings in total assets [11][12] Future Outlook - Analysts suggest that the technology sector will continue to be a clear investment focus in 2026, recommending strategies such as "core + satellite" and "barbell" approaches for portfolio diversification [13]

Core Viewpoint - The article discusses the three main scenarios of fund losses and provides guidance on whether to hold or sell under different circumstances, emphasizing the importance of understanding the root causes of losses and the long-term logic of industries [7][10][28]. Group 1: Market Conditions - The first scenario of fund losses occurs when the entire market is declining, which is referred to as systematic risk. This type of risk is unpredictable and unavoidable, as seen during the 2008 financial crisis when the market dropped by 60% [10][12][13]. - The market experiences cyclical changes, transitioning from prosperity to recession and back to prosperity, indicating that economic recovery and market confidence will eventually return [15][16]. Group 2: Industry-Specific Issues - The second scenario involves specific industries or themes experiencing downturns. For instance, the photovoltaic industry faced a downturn from 2021 to 2023 due to rapid capacity expansion, but demand remains, suggesting that holding onto investments may be wise if the long-term logic of the industry hasn't changed [18][22][25]. - Investors should assess whether the fundamental logic of the industry has shifted before deciding to sell [27]. Group 3: Fund Management Problems - The third scenario, which requires the most caution, is when the fund manager's management leads to losses. Key indicators include: 1. Long-term performance significantly underperforming peers, necessitating a review over a complete market cycle [30][31]. 2. A shift in investment style, where a fund manager deviates from their stated strategy, indicating a potential gamble rather than a sound investment approach [33]. 3. Departure of a key fund manager, which can lead to a decline in performance if the fund's success was heavily reliant on that individual [36]. Group 4: Risk Management Strategies - The article suggests that while temporary losses are normal, understanding their causes is crucial for effective management. It highlights the human tendency to react emotionally when losses exceed 20% [39]. - To mitigate risks during market downturns, diversifying across different asset classes such as stocks, bonds, and commodities can help reduce overall risk, as these assets often have low correlation [44][50]. - Although diversification may dilute potential gains during strong bull markets, it is presented as a suitable investment strategy for ordinary investors seeking to minimize volatility [52].

Core Viewpoint - The article emphasizes the pitfalls of having an excessive number of funds in an investment portfolio, likening it to running a supermarket, which can lead to false diversification and management difficulties [6][17]. Group 1: Reasons for Excessive Fund Holdings - Fear of Missing Out (FOMO) drives investors to buy into new concepts and themes, leading to an overwhelming number of funds [9]. - Misunderstanding the principle of diversification results in investors believing that holding more funds inherently reduces risk [11]. - Decision paralysis occurs when investors are overwhelmed by choices, leading them to buy multiple funds without a clear strategy [13]. Group 2: Problems with Excessive Fund Holdings - False Diversification: Holding many funds does not guarantee risk diversification, as many funds may share the same underlying assets [18]. - Management Overload: Monitoring numerous funds can be time-consuming and impractical, making it difficult to analyze performance and make informed decisions [22]. Group 3: Steps to Optimize Fund Holdings - Step 1: Define a portfolio structure based on individual risk tolerance and investment goals, including allocations to different types of funds [27][30][34]. - Step 2: Tag each fund according to its category to gain clarity on the portfolio composition [37]. - Step 3: Consolidate similar funds by evaluating them based on performance, drawdown history, fund size, fee structure, and manager experience [41][45][49]. Group 4: Tools and Recommendations - The article suggests using fund comparison tools available in various apps to facilitate the selection process and streamline decision-making [50]. - It introduces a three-part asset allocation tool that helps investors avoid common pitfalls by providing a structured framework for fund selection and management [65][66].

Group 1: Economic Overview and Federal Reserve Insights - The U.S. September non-farm payroll data presents a mixed picture, with 119,000 jobs added, exceeding market expectations, but the unemployment rate rising to 4.4% [3][12] - Average hourly earnings increased by only 0.2% month-on-month in September, a significant slowdown from 0.4% in August, indicating potential wage pressures [3][12] - The Federal Reserve's internal views are divided, and the market's expectations for a December rate cut have fluctuated significantly, influenced by recent economic data [3][11] Group 2: Oil and Gas Industry Outlook - The oil and gas extraction sector is expected to see supply slow down, with Brent crude oil prices projected to range between $55 and $70 per barrel in 2026 [3][13] - OPEC+ is expected to slow its production increase, while non-OPEC supply growth is anticipated to decline significantly, particularly in shale oil production [3][13] - Global GDP growth is forecasted at approximately 3.1% in 2026, with a corresponding slowdown in oil demand growth [3][13] Group 3: Petrochemical Sector Analysis - The refining sector is anticipated to recover due to a contraction in global supply and the implementation of "anti-involution" policies in China, which may enhance the competitiveness of leading companies [3][21] - The polyester sector is expected to see a tightening supply-demand balance, with significant recovery potential, particularly for high-quality companies in the polyester filament and bottle-grade sectors [3][21] - Investment recommendations include focusing on leading refining companies such as Hengli Petrochemical and Rongsheng Petrochemical, as well as high-dividend oil companies like China National Petroleum and China National Offshore Oil [3][21]

Core Insights - The year 2025 has been marked by significant market movements, with the Shanghai Composite Index reaching a nearly ten-year high, validating earlier bullish predictions [1] - Key themes for 2025 include the impact of Trump's new policies, domestic policy responses, and the challenges of asset allocation in a low-interest-rate environment [1] - The A-share market has seen a surge in investor participation, with nearly 250 million investors, indicating a robust market environment [2] Market Performance - A-shares and Hong Kong stocks have performed well, driven by sectors like AI and innovative pharmaceuticals, with the ChiNext Index outperforming gold [3] - Among 31 primary industries, 30 have reported positive returns, with a stark contrast between the leading materials sector and the declining food and beverage sector, showing an 80% difference [4] - Various fund types have achieved positive returns, with equity and mixed funds averaging 29.97% and 26.17% returns respectively [7] Fund Performance - Commodity funds have seen unprecedented gains, with returns nearing 40%, while QDII funds have also performed well with a 26.46% increase [8] - FOF funds have benefited from diversified asset allocation, achieving an average return of 15.84%, marking one of the best years historically [8] - Bond funds have lagged, with an average return of only 2.13%, although convertible bond funds have performed better, exceeding 20% returns [8] Investment Trends - The concept of "slow bull" has gained traction, with expectations for a sustainable market rally over the next two to three years, supported by technological innovation and policy backing [16] - Investors are increasingly favoring low-volatility products, with a focus on absolute returns and diversified strategies [14] - The market is characterized by alternating sentiments of fear and greed, with a need for disciplined investment approaches amidst volatility [12][19]

Core Insights - The total scale of commodity funds has shown steady growth in 2023, with over 60 funds reaching a total scale of 293.7 billion yuan, an increase of 16.37 billion yuan since the beginning of the year, representing a year-to-date growth rate of 123.1% [1] - Gold ETFs have outperformed other commodity funds, with all top ten products being gold-themed ETFs, and 55 out of the 60 funds showing a net value growth rate of over 40% this year [1][2] - The strong performance of gold ETFs is attributed to three main factors: heightened demand for safe-haven assets due to global geopolitical conflicts and economic uncertainty, expectations that the interest rate hike cycle of major central banks has peaked, and ongoing gold purchases by central banks providing stable demand support [1] Performance Disparity - There is a notable disparity in the performance of commodity funds, primarily due to the Federal Reserve's interest rate cuts not meeting expectations and the high volatility of the US dollar index, benefiting precious metals like gold as a safe-haven asset [2] - The slowdown in global economic growth and accelerated energy transition have pressured traditional oil and gas prices, leading to poor performance in related thematic funds [2] - Analysts indicate that the performance disparity among different commodity funds will likely continue in the short term, with a shift of funds from cyclical commodities to defensive assets as macroeconomic cycles evolve [2]

Group 1 - The A-share market has seen a significant increase in investor participation, with 22.46 million new accounts opened in the first ten months of 2025, representing an 11% year-on-year growth, bringing the total number of A-share investors close to 250 million [1] - The A-share and Hong Kong stock markets have performed well in 2025, driven by sectors such as AI computing and innovative pharmaceuticals, with the ChiNext index outperforming gold and the mixed equity fund index achieving a return of 32.47%, surpassing major indices like the Nasdaq [2][3] - Among 31 first-level industries, 30 have recorded positive returns this year, with the only exception being the food and beverage sector, which saw a slight decline, highlighting a significant divergence in sector performance [3] Group 2 - The commodities market has experienced unprecedented performance this year, with commodity funds achieving returns close to 40% and other QDII funds rising by 26.46%, influenced by a declining interest rate environment and geopolitical tensions [7] - Bond funds have underperformed, with an average return of only 2.13%, although convertible bond funds have shown a remarkable increase of over 20%, comparable to equity fund indices [8] - Overall, different types of funds have provided a positive experience for holders, particularly technology-focused funds, which have delivered substantial returns [10]

Core Insights - The overall fund size in China reached 30.46 trillion units by the end of Q3 2025, with a net redemption of 124.76 billion units, representing a decrease of 0.41% [10][11][12] - Despite the overall trend of net redemptions, 45 actively managed equity funds saw net subscriptions exceeding 1 billion units, indicating strong investor interest in high-performing products [2][4][6] Fund Performance Summary - In Q3 2025, 107 actively managed equity funds had net subscriptions over 500 million units, more than doubling from the previous quarter, with mixed funds being the dominant category [4][6] - The top three funds by net subscriptions were: - ICBC Value Select Mixed A: 5.883 billion units, net subscription ratio of 571.02% [5][7] - Huatai-PineBridge Xinxiang Tianli Mixed A: 3.941 billion units, net subscription ratio of 331.24% [5][7] - Yongying Semiconductor Industry Smart Selection Mixed C: 3.219 billion units, net subscription ratio over 180% [5][7] Market Trends - The bond fund category experienced the largest net redemption, shrinking by 505.52 billion units, while mixed and actively managed equity funds also faced significant outflows [10][12] - Conversely, money market funds and QDII funds saw net inflows, with money market funds gaining 450.78 billion units and QDII funds 109.84 billion units, indicating a shift in investor preference [12][13] Fund Categories Overview - The performance of various fund categories in Q3 2025 was as follows: - Stock funds: 35.85 trillion units, net subscription of 331.99 million units [13] - Index funds: 32.43 trillion units, net subscription of 514.74 million units [13] - Actively managed equity funds: 3.43 trillion units, net redemption of 182.75 million units [13] - Mixed funds: 26.64 trillion units, net redemption of 2.18 trillion units, the highest redemption ratio [12][13] - Bond funds: 89.31 trillion units, net redemption of 5.06 trillion units, the largest among all categories [12][13]

Core Viewpoint - In the third quarter of 2025, public funds in China achieved a remarkable profit of 2.08 trillion yuan, driven by strong performance in equity products, marking a significant increase of 4.4 times compared to the previous quarter [1][3][10]. Profit Overview - The overall profit of public funds for the first three quarters of 2025 reached 27.14 trillion yuan, with equity funds being the major contributors [1][11]. - The profits from stock and mixed funds in the third quarter were 1.08 trillion yuan and 757.49 billion yuan, respectively, accounting for nearly 90% of total profits [4][11]. Fund Management Companies - Leading fund management companies such as E Fund, Huaxia, and Harvest reported profits exceeding 100 billion yuan in the third quarter, with E Fund alone generating 297.28 billion yuan [5][6][7]. - A total of 162 fund management firms reported profits, with 34 companies achieving profits over 10 billion yuan [6][12]. Market Performance - The market showed strong performance in the third quarter, with the CSI 300 Index rising by 17.9% and the ChiNext Index increasing by 50.4%, contributing to the profitability of public funds [3][10]. - The "seesaw" effect was evident in the stock and bond markets, with larger equity fund management companies reporting higher overall profits [7]. Specific Fund Performance - E Fund's products, including the E Fund CSI 300 ETF and E Fund ChiNext ETF, were among the top performers, generating profits of 49.58 billion yuan and over 39 billion yuan, respectively [8][9]. - Huaxia Fund and Harvest Fund also reported significant profits, with Huaxia's total reaching 227.41 billion yuan and Harvest's at 102.64 billion yuan [9][11].