Institutional statement: The allocation value of low-volatility assets is increasingly evident

Securities Times China Securities Network News (Reporter He Xinyi) On July 9, A-share’s four major indexes all closed higher, with technology stocks clearly standing out in terms of gains. But many investors also still remember the recent ups and downs in tech stocks, looking forward to a more “steady and secure kind of happiness.” In fact, balanced dumbbell-type allocation has long been an important strategy in asset allocation. Multiple fund managers said that the allocation value of the current dividend low-vol strategy is becoming increasingly prominent. This trend is also supported by fund flow data. In the current environment, assets characterized by stable cash dividends are seeing higher allocation demand, and related products are gradually returning to investors’ focus.

Data show that in the first half of 2026, the total dividend scale of Shanghai-listed broad-based ETFs reached 17 billion yuan, and the dividend scale of dividend- and cash-flow-type ETFs was nearly 2 billion yuan, together accounting for 93% of the total domestic ETF dividends. From the start of the year through the end of June, Shanghai-listed dividend- and cash-flow-type ETFs have attracted more than 23 billion yuan in net inflows.

Liu Jun, deputy general manager of Huatai-Pinebridge Fund and manager of dividend low-vol ETFs, said that the periodical volatility of the dividend low-vol index this year implies that its valuation, dividend yield, and trading structure may have returned to more attractive allocation ranges. As of now, the index’s dividend yield over the past 12 months has reached 5.2%; over the past week, trading volume as a proportion of the entire A-share market was only 1.23%, which is in a low range below the one-year average. This shows that dividend return advantages are relatively more prominent, the trading structure is healthier, and the value for a mid-term layout is expected to improve.

More importantly, the recent performance of the dividend low-vol index is essentially a phase repricing under the backdrop of fast rotation in market style, rather than a change in dividend capacity or underlying logic. Since the second quarter, as geopolitical risks eased, oil prices declined, and market risk appetite increased, funds have, in phases, flowed more toward technology growth directions and market structure has split clearly. However, dividend-type ETFs across the whole market have continued to receive attention from incremental capital. In May and June, net inflows were 9.8 billion yuan and 9.2 billion yuan respectively, fully demonstrating that many medium- to long-term funds still recognize this type of asset and are actively positioning for it.

Liu Jun believes that the current dividend low-vol thematic ETFs may be in a stage where dividend attractiveness is improving, the strength of capital allocation is increasing, and the foundation for a repair is gradually being solidified. In the short term, they are likely to benefit from valuation repair brought by the market’s style rebalancing. In the medium term, against the backdrop of the persistence of a low interest rate environment and continued demand for long-term steady returns, they may still be high-quality tools that combine dividend yield, volatility control, and bottom-fund allocation attributes.

Yang Zhengwang, a fund manager at E Fund, said that the adjustment of dividend assets in this round is mainly driven by an extreme switch in market style—AI-driven capital withdrawing from dividend value-type assets—rather than problems in the fundamental conditions of indices such as dividend low-vol. The constituents’ earnings and dividends remain steady. Currently, the price-to-book ratio of the CSI Dividend Low Volatility Index is 0.8 times, and the dividend yield is as high as 5.2%. The combination of undervaluation plus high dividends forms a solid safety cushion for the index, and the index’s drawdown has already been larger than is typical in history. From a long-term historical perspective, the CSI Dividend Low Volatility Total Return Index’s approximate annualized return over the past 10 years is about 9.4%, with annualized volatility of only 16.4%. The logic of selecting high-dividend, low-volatility companies can look through market cycles and provide investors with relatively strong long-term returns.

(Editor: Xu Nannan)

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