As U.S.-China trade negotiations progress and expectations for Federal Reserve interest rate cuts strengthen, overseas disruptive factors are gradually receding. The A-share market may refocus on domestic narratives. Last week’s "15th Five-Year Plan" communiqué struck a positive tone, boosting confidence by emphasizing "adhering to economic development as the central task" and accelerating the construction of a nationally unified market, providing solid support for the medium- to long-term performance of the A-share market. With the Q3 earnings report season approaching, the market is currently in a window of performance verification, potentially ushering in a rally driven by both "policy and performance."
Structurally, as previous safe-haven trades shift toward value-oriented styles, the cost-performance discrepancies among sectors have been digested, and market risk appetite may rise again. The CSI A500 Index balances both value and growth styles, fully considering sector diversification. Among its components, new productive forces (TMT, new energy, pharmaceuticals, and automobiles) account for 45.8%, significantly higher than the CSI 300/Shanghai Composite Index/SSE 50 (36.8%, 30.6%, and 24.1%, respectively). This structure positions the A500 Index to benefit more from trends driven by technological advancement and industrial upgrading, while its balanced diversification and lower volatility characteristics enable it to maintain a high win rate even in volatile markets.
Additionally, the CSI A500 stock selection imposes strict requirements on ESG scores and requires all constituent stocks to be eligible for the Stock Connect program, enhancing convenience for long-term capital participation. Compared to other broad-based indices, the A500 ETF is more likely to attract foreign capital and may draw more overseas investment after the Federal Reserve cuts interest rates. It is recommended to invest in the CSI A500 Enhanced ETF (159226) or the CSI A500 ETF (159338) based on individual risk preferences to achieve a balanced allocation of growth and value.
