Report Industry Investment Rating - The report does not explicitly mention the industry investment rating. Core Viewpoints - Continue to be optimistic about equities, small - cap, and growth styles. Maintain a high allocation of equity assets, be bullish on the performance of Hong Kong stocks, and suggest paying attention to small - cap and growth - style funds. For fixed - income + funds, focus on relatively stable varieties, and for bond funds, focus on short - duration varieties [2][76]. Summary by Directory 1. 1 - month Review: Equity and Commodity Prices Rise, US Dollar Index Declines 1.1 Asset Market Performance - **Stock Market**: A - shares and US stocks rose. The Shanghai Composite Index rose 3.76%, the Science and Technology Innovation 50 rose 12.29%, the Dow Jones Index rose 1.73%, and the Nasdaq Index rose 0.95%. The A - share "Spring Rally" continued, with the mid - cap growth style having the largest increase. US stocks fluctuated upward due to the resilience of economic data, and Hong Kong stocks rose influenced by the A - share market [8][14]. - **Bond Market**: US Treasury yields increased, while Chinese government bond yields decreased. The 1 - year US Treasury yield rose slightly to 3.48%, and the 10 - year yield rose to 4.26%. In China, the 1 - year government bond yield dropped to 1.30%, and the 10 - year yield dropped to 1.81%, with the term spread slightly widening [8][18]. - **Commodity Market**: Commodity prices rose. The CRB Commodity Index rose 7.13%, the Nanhua Commodity Index rose 8.61%, and COMEX gold rose 13.28%. Crude oil prices rose to $70.7 per barrel, and precious metals had the largest price increases, exceeding 40% [8][27]. - **Foreign Exchange Market**: The US dollar index declined, and the RMB appreciated. The US dollar index dropped to 97.12, and the RMB spot exchange rate rose to around 6.95 [8][23]. 1.2 Fund Market Performance - **Performance and Issuance**: In January, the fund market performed well, and the issuance scale increased. The total issuance scale in January was 120.2 billion yuan, a 6% increase from the previous month. Equity funds' issuance scale was 69.3 billion yuan, a 113% increase from the previous month, accounting for 58% of the total issuance [33]. - **Fund Capital Flows**: In January, the on - site funds had a net capital outflow. ETFs had a net outflow of 821.95 billion yuan (excluding money - market funds), and LOFs had a net inflow of 2.23 billion yuan. Among ETFs, equity products had a net outflow of 774.74 billion yuan, and bond - type products had a net outflow of 108.35 billion yuan. Among LOFs, equity products had a net outflow of 0.6 billion yuan [37]. - **Active Equity Fund Style Tracking**: The overall position of the active equity funds in the whole market increased their exposure to the prosperity style and reduced their exposure to the quality, dividend, and value - potential styles. The median position of the prosperity style was 30%, a 22 - percentage - point increase from the end of the previous month, while the median positions of the quality, dividend, and value - potential styles decreased by 33, 8, and 4 percentage points respectively [38]. 2. 2 - month Outlook: Continue to be Optimistic about Equities, Small - cap, and Growth Styles 2.1 Overseas and Domestic Environment - **Overseas**: In January, the market's expectation of the Fed's interest - rate cuts in 2026 decreased significantly, and the long - term US Treasury yields continued to rise [44]. - **Domestic**: The private - sector financing growth rate continued to rise, the inflation factor continued to recover, and the economic recovery signal of the fundamental model continued. It is recommended to maintain a high allocation of equity assets [49]. 2.2 Trading Perspective - **Stock Market Odds**: The stock - market odds have been fluctuating around the 3 - year average since 2025. As of January 30, the dividend yield of the CSI 300 was 2.6%, and the equity risk premium ERP(DY) was 1.4, at the 61.3% percentile of the past 3 years [50]. - **Market Sentiment**: The A - share market sentiment has returned to the optimistic range. Based on the A - share market sentiment index constructed from seven indicators, the sentiment index has returned to the optimistic range [54]. 2.3 Market Style - **Growth Style**: The growth - value style rotation model shows that the market factor, US Treasury yield, and style momentum all favor the growth style, so the growth style is comprehensively recommended [61]. - **Small - cap Style**: Although the current credit environment recommends the large - cap style, the loose monetary environment and long - and short - term style momentum still recommend the small - cap style, so the small - cap style is comprehensively recommended [65]. 2.4 Hong Kong Stock Market - Based on the Hong Kong - stock timing strategy of macro - comprehensive indicators, the macro - indicators that are bullish on Hong Kong stocks have recovered, and the model continues to be bullish on the performance of Hong Kong stocks [69]. 2.5 Domestic Bond Market - The short - term liquidity remains in a tight balance, and the long - term interest rates have declined. Due to the continuous implementation of growth - stabilizing policies and the need for domestic interest - rate cuts, short - term bonds present better opportunities than long - term bonds [74]. 2.6 February Fund Allocation Strategy - **Equity Assets**: Maintain a high allocation of equity assets, and pay attention to investment opportunities in Hong Kong stocks. - **Style Preference**: In the short term, the small - cap and growth styles are expected to continue to outperform, so continue to pay attention to small - cap and growth - style funds. - **Fixed - income + and Bond Funds**: For fixed - income + funds, focus on relatively stable varieties, and for bond funds, focus on short - duration varieties. - **Recommended Funds**: Silver Hua Integrated Circuit (013840.OF, medium - high risk), Soochow Mobile Internet (001323.OF, medium - high risk), Bosera Sheng Yan (012124.OF, medium - high risk), BOC Stable Income (380009.OF, medium risk), Penghua Stable Short - term Bond (007515.OF) [76].

1. Report Industry Investment Rating No industry investment rating information is provided in the report. 2. Report's Core View - The recovery signal of the fundamental situation still needs to be observed, the momentum factor remains bearish, and the market sentiment is rising from a low level. It is recommended to maintain an under - allocation of equity assets. In the short - term style, the small - cap style is expected to dominate in December, and the growth style will continue to dominate. It is recommended to focus on small - cap and growth styles. For fixed - income + funds, it is recommended to focus on relatively stable varieties, and for bond funds, focus on short - duration varieties [2][74]. 3. Summary According to the Catalog 11 - month Review Stock Market - A - shares declined, with the Shanghai Composite Index falling 1.67% and the Science and Technology Innovation 50 falling 6.24%. The Dow Jones Index rose 0.32%, and the Nasdaq Index fell 1.51%. Affected by concerns about the valuation of the US stock AI sector and the volatility of the Fed's interest - rate cut expectations, A - shares and Hong Kong stocks declined, and US stocks fluctuated [8][13]. Bond Market - US bond yields declined, with the 1 - year US bond yield dropping to 3.61% and the 10 - year US bond yield dropping to 4.02%. Domestic bond yields rose, with the 1 - year Treasury yield rising to 1.40% and the 10 - year Treasury yield rising to 1.84%, and the term spread widened. The decline in US bond yields was due to the volatility of the Fed's interest - rate cut expectations, while the rise in domestic bond yields was because the central bank's Treasury purchase volume was lower than expected [8][17]. Foreign Exchange Market - The US dollar index declined to 99.44, and the RMB appreciated. The on - shore exchange rate of the US dollar against the RMB rose to 7.08, and the off - shore exchange rate rose to 7.07. The decline in the US dollar index was due to the continuous volatility of the Fed's interest - rate cut expectations, and the RMB appreciation was supported by the weakening of the US dollar and the strong domestic economic fundamentals [20]. Commodity Market - Crude oil prices fell to $63.2 per barrel. Domestic commodity prices rose slightly after fluctuations, and overseas commodity prices fell overall after rising first and then falling. Among domestic commodities, precious metals and grains led the gains, while coal, coking, steel, minerals, agricultural and sideline products, non - metallic building materials, non - ferrous metals, energy, and chemicals declined [25]. Fund Market - The performance of the fund market in November was poor. The issuance scale increased to 94.6 billion yuan, a 31% increase from the previous month. Structurally, the issuance scale of equity funds was 45.3 billion yuan, a 30% increase from the previous month, accounting for 48% of the total issuance. ETF funds had a net inflow of 100.9 billion yuan (excluding money funds), and LOF funds had a net outflow of 320 million yuan. Among them, equity - type ETF products had a net inflow of 32.3 billion yuan, and equity - type LOF products had a net outflow of 440 million yuan. Active equity funds increased their positions in dividend, value - potential, and prosperous styles and reduced their positions in quality styles [30][36][37]. 12 - month Outlook Overseas Environment - The market's expectation of the Fed's interest - rate cut within the year fluctuated significantly, and the market expected the Fed to cut interest rates in December. The probability of the Fed cutting interest rates in December increased to over 80%. US bond yields first rose and then fell, with an overall decline [43]. Domestic Environment - The private - sector financing growth rate continued to decline, and the inflation factor rebounded from a low level. It is recommended to maintain an under - allocation of equity assets as the economic recovery signal still needs to be observed, and the momentum factor remains bearish [47]. Trading Perspective - The stock - market odds were close to the three - year average, and the A - share market sentiment was rising from a low level but had not yet returned to the optimistic range [48][52]. Market Style - The growth - value style rotation model shows that the market factor, US bond yield, and style momentum are all favorable for growth, and the growth style will continue to dominate. The small - large - cap style rotation model shows that the current credit environment, monetary environment, and long - and short - term style momentum all recommend the small - cap style [59][64]. Hong Kong Stock Market - The number of macro - indicators bullish on Hong Kong stocks decreased compared with last month. The model recommends an under - allocation of Hong Kong stocks as the private - sector financing growth rate, Hong Kong dollar M2 growth rate, and Chinese sovereign CDS spread are bearish, although the US dollar index and south - bound funds are bullish [68]. Domestic Bond Market - Short - term liquidity remained in a tight balance, and long - term interest rates rose. It is recommended to focus on short - duration bond funds as short - term bonds have better opportunities than long - term bonds [71]. Fund Allocation Strategy - It is recommended to maintain an under - allocation of equity assets and focus on small - cap and growth styles. For fixed - income + funds, focus on relatively stable varieties, and for bond funds, focus on short - duration varieties. Recommended funds include Dongwu Mobile Internet (001323.OF, medium - high risk), CITIC Prudential Multi - Strategy (165531.OF, medium - high risk), Harvest New Consumption (001044.OF, medium - high risk), BOC Steady Income (380009.OF, medium risk), and Penghua Stable Short - Term Bond (007515.OF) [2][74].