Core Insights - The rapid development of passive investment has led to increased institutional focus on enhanced index funds, which combine the advantages of passive indexing and active management [1][2] Group 1: Performance Metrics - As of October 15, the average return of passive index funds over the past year was 31.68%, while enhanced index funds achieved a return of 35.34%, with nearly all funds generating positive returns [1] - Several products tracking indices such as rare metals, CSI 2000, semiconductors, and artificial intelligence reported returns exceeding 50% over the past year [1] Group 2: New Fund Developments - Approximately 140 new enhanced index funds have been established in 2023, more than doubling the total from 2024, with an additional six funds awaiting issuance [1] Group 3: Advantages of Enhanced Index Funds - Enhanced index funds benefit from the growth of ETFs, which have clear risk-return characteristics, allowing enhanced index products to compete effectively with ETFs after accounting for fees [2] - The total market size for enhanced index products is currently around 300-400 billion, indicating significant growth potential [2] - Fund managers have the flexibility to achieve excess returns through active management and strategic stock selection beyond the benchmark index [2] Group 4: Emerging Trends in Quantitative Investing - A new category referred to as "air index enhancement" is gaining popularity, where investment decisions are made based on quantitative models without tracking any specific index [3] - The Longsheng Shengfeng Mixed Fund exemplifies this approach by focusing on a refined selection of stocks from the CSI A500 index, targeting small and medium-sized industry leaders [3] - As of the second quarter, there were 277 quantitative stock selection funds with a total management scale of 90.32 billion, showcasing their broader investment scope and higher performance elasticity [3]

Core Viewpoint - The year 2023 is identified as a significant year for quantitative strategies, with many private equity funds reporting returns exceeding 40% due to favorable market conditions and the effective use of alternative data and artificial intelligence [1][2][3]. Group 1: Performance of Quantitative Private Equity - As of August 8, 2023, several quantitative stock selection strategies have reported returns over 40%, with five key private equity products exceeding 50% [2][5]. - The "air index increase" strategy has shown remarkable performance, allowing for flexible stock selection across the entire market without being tied to specific indices [2][3]. - The average return for 36 billion-level quantitative private equity firms has reached 18.92%, with all firms achieving positive returns [5][6]. Group 2: Market Environment and Strategy Adaptation - The active A-share market and high volatility have provided numerous trading opportunities for quantitative strategies, enhancing their ability to capture alpha returns [3][6]. - The integration of alternative data, continuous signal mining, and advancements in artificial intelligence have significantly improved the efficiency of quantitative models [3][4]. - The current market environment, characterized by increased liquidity and a favorable policy backdrop, has further supported the performance of quantitative strategies [6][7]. Group 3: Comparison with Traditional Strategies - Quantitative private equity has outperformed traditional subjective private equity this year, with 32 out of 42 billion-level private equity firms achieving returns over 10% being quantitative [4][5]. - The flexibility of quantitative strategies allows for dynamic adjustments in stock selection, enabling them to effectively navigate market fluctuations and capture structural opportunities [4][6].