As the style shift continues, micro-cap stocks lead the broad market rally, with institutions: the main reason for small and micro-cap adjustments being "liquidity amplifiers," and post-holiday risk appetite is expected to recover.

On April 7th, the A-share market experienced a moderate rebound, with over 3,900 individual stocks rising across both markets, and small- and mid-cap styles outperforming. As of the report, the Micro Cap Stock Index increased by over 2%, China Securities 1000 Enhanced ETF China Merchants (159680) rose 0.96%, and China Merchants CSI 2000 Enhanced ETF (159552) increased by 1.46%.

At the overall market level, the three major indices surged then pulled back, with half-day trading volume in Shanghai and Shenzhen totaling 1.22 trillion yuan. Hotspots rotated quickly, with the chemical sector continuing to rise, led by refining and chemical, organic silicon, and other directions. The PCB concept fluctuated and surged, and the computing power chip concept continued to rebound intraday. Market profitability was concentrated in small- and mid-cap stocks.

Regarding market funds, China Securities 1000 Enhanced ETF China Merchants (159680) received net subscriptions of 23.6 million yuan on the previous trading day, with nearly 70 million yuan net subscriptions over the past 20 trading days. The willingness to deploy funds on dips into small- and mid-cap enhancement strategies persisted; the latest size of this ETF reached 12.2k yuan, with shares and size increasing by about 60% this year.

China Securities 2000 Enhanced ETF China Merchants (159552) had net inflows of 19 million yuan on the previous trading day. Since inception, it has returned 105.76%, outperforming the same period China Securities 2000 Index by 41.89%, ranking among the top in net asset value growth among similar enhanced index funds over the past year.

BOC Securities pointed out that the recent adjustment of small- and micro-cap stocks was mainly due to the “liquidity amplifier” effect. After the Qingming Festival, the performance of small- and micro-cap stocks was weakly affected by new policy regulations, and whether they can break free from the trend depends on the recovery of risk appetite. In the medium to long term, domestic fiscal efforts and the entry of long-term funds are expected to provide support for the market.

Analysis indicates that while uncertainties still exist in the current overseas geopolitical situation, positive factors such as proactive domestic fiscal policies and plans for long-term funds entering the market are accumulating. China Securities 1000 Enhanced ETF China Merchants (159680) and China Securities 2000 Enhanced ETF China Merchants (159552) offer differentiated broad-based allocation tools.

Risk warning: Funds are risky; investments should be cautious.