Core Viewpoint - The public offering FOFs are expected to increase their equity allocation as the A-share market rises, leading to a rebound in returns for these products [1][2][5] Group 1: Performance and Trends - Over 95% of public offering FOF products have positive returns year-to-date, with approximately 36 products achieving returns exceeding 20% [1] - The rebound in FOF returns is attributed to adjustments in portfolio structure, with a shift from pure bond funds to equity funds, particularly in sectors like technology and healthcare [2][3] - The best-performing FOFs have significantly increased their equity positions, with some funds reporting equity allocations as high as 99% [2] Group 2: Challenges and Risks - FOFs heavily invested in pure bond funds are underperforming, with many of these products facing pressure to liquidate [4][5] - There has been an increase in the number of FOFs facing liquidation risks, with 19 funds reporting liquidation this year, up by 8 from the previous year [5] - The industry is experiencing a divergence in performance, with smaller FOFs struggling to survive due to unclear positioning and competition for capital [5][6] Group 3: Future Outlook - The expectation is that the equity allocation in FOFs will continue to rise as economic recovery strengthens and market valuations remain low [5] - The industry is moving towards a more differentiated strategy, with a focus on the ability of FOF managers to adapt to structural opportunities in the equity market [6]

Group 1 - The core viewpoint of the article highlights the significant growth and potential of the innovative drug sector in the Hong Kong stock market, with the Hong Kong Innovative Drug Index rising by 101.33% this year [1][10] - The innovative drug sector is identified as a clear trend within the pharmaceutical industry, with substantial future growth potential [1] - The recent adjustments to the Hong Kong Innovative Drug Index will further focus on pharmaceutical research and development, enhancing its purity and sharpness [1] Group 2 - In the first half of this year, the number of approved innovative drugs exceeded the total for the previous year, with 43 drugs approved, marking a 59% increase [3] - This increase in approvals is attributed to the drug review and approval reform initiated in 2018, which has significantly accelerated the process [3] - The approved innovative drugs include treatments for major diseases such as cancer and rare diseases, improving patient access to medications and providing revenue growth opportunities for pharmaceutical companies [3] Group 3 - The pharmaceutical industry has seen a decline in sales and financial expense ratios, contributing to improved profit margins for innovative drug companies [1][5] - From 2021 to the first quarter of 2025, the sales expense ratio decreased from 14.33% to 12.18%, and the financial expense ratio dropped from 0.69% to 0.38% [5] - The overall net profit for the pharmaceutical and biotechnology sector reached 506.74 billion yuan in the first quarter of 2025 [1] Group 4 - The total amount of overseas licensing transactions by Chinese pharmaceutical companies reached 608 billion USD in the first half of 2025, surpassing the total for the previous year [6] - This growth is driven by the demand from multinational pharmaceutical companies facing patent expirations and the increasing global competitiveness of Chinese innovative drug assets [6] - The trend of Chinese pharmaceutical companies continuing to seek overseas licensing opportunities is expected to persist [6] Group 5 - The article suggests that investors can capture growth opportunities in the innovative drug sector through innovative drug ETFs and related funds, which can help diversify individual stock risks [9] - The Hong Kong Innovative Drug ETF has shown strong performance, leading the market with a 101.33% increase this year [10] - The ETF's share split on August 8 is expected to lower the investment threshold, allowing for more flexible participation [10]