Hong Kong Stock Connect State-Owned Enterprise ETF Guotai (159519) surges over 1.2%. Focus on domestic and external demand allocation strategies, and grasp the investment value of the Hong Kong Stock Connect State-Owned Enterprise sector.

April 1, the Hong Kong-listed SOE ETF Cathay (159519) rose by more than 1.2%. Pay attention to allocation ideas for domestic and external demand, and seize the allocation value of the Hong Kong SOE sector.

Haitong Securities said that, from an allocation perspective, adjustments can be made based on the rebalancing idea between domestic and external demand. For the external demand portion, reduce the allocation to sectors with a relatively larger exposure to discretionary consumption in Europe and Asia; maintain the allocation to sectors whose external demand does not decline but rather increases, mainly focusing on midstream manufacturing and the broad energy supply-chain where China has industrial advantages. For the domestic demand portion, demand was previously less crowded, but it may be more resilient than external demand. In the near term, marginal improvement in high-frequency real estate data, profit downgrades after the earnings season ends, and clearing of positions are coming into place; you can appropriately increase allocation to Alpha opportunities in essential consumption and services consumption, as well as to internet consumption where pressure is improving. Innovation drugs that are relatively independent from macro logic and where the business cycle is improving are more of an α opportunity. China Hong Kong local stocks are still a value-for-money core holding.

The Hong Kong SOE ETF Cathay (159519) tracks the Mainland state-owned index (H11153). This index mainly covers state-owned enterprises participating in the Belt and Road Initiative. It selects the top 100 securities with the highest composite scores as index constituents. It focuses on sectors such as building decoration, transportation, and communications, and the style tilts toward large-cap blue chips, to reflect the overall performance of state-owned listed companies in related areas.

Risk warning: Mentioned individual stocks are only used for industry event analysis and do not constitute any recommendation or investment advice regarding any individual stock. Short-term rises and falls in the index are for reference only and do not represent any commitment or guarantee regarding its future performance, nor do they constitute any promise or guarantee regarding fund performance. Views may be adjusted as market conditions change, and do not constitute investment advice or commitments. The fund risk and return characteristics mentioned are different from each other. Investors are kindly reminded to read the fund legal documents carefully, fully understand product features, risk levels, and the principles of profit distribution, and choose products that match their own risk tolerance. Invest cautiously. For fund fee rates, please refer to the legal documents.

Daily Economic News

(Editor-in-charge: Dong Pingping)

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