As market volatility intensifies recently, will domestic macroeconomic and external risk factors disrupt A-share trends? Dai Kang, Managing Director and Chief Asset Research Officer at GF Securities Development Research Center, stated that the phenomenon of residents' deposits "moving" will continue, and this round of A-share gains is driven by internal factors. China's economic resilience is expected to support A-shares in achieving independent performance, while Federal Reserve interest rate policies have limited impact on A-shares. Multi-factor resonance sectors performed well in August, and future opportunities should be explored through the core logic of thematic growth rotation. The market has underestimated US economic recession risks, and appropriate reduction of risk exposure to US assets is recommended.

Host: What do you believe are the main factors driving A-share market gains in August? Are they macroeconomic recovery, policy benefits, the market's own structural adjustments, or overseas market drivers such as interest rate policies and economic expectations? Do you think this sustained upward pattern in A-shares has opened up?

Dai Kang: Residents' Deposit "Relocation" Phenomenon Will Continue; This Round of A-Share Gains Driven by Internal Factors

I believe the main factor behind this round of A-share gains is the recovery of risk appetite in the A-share market under a low interest rate environment, with global situation easing and domestic policy coordination. Among these, the phenomenon of residents' deposit relocation deserves particular attention. Under the positive cycle of wealth effects, this phenomenon is expected to continue. This round of A-share gains is more driven by internal factors.

Host: Based on current market conditions, what are your views on A-share performance trends in September? Will it continue August's upward trend, or might there be adjustments? What factors will become key variables affecting September performance, such as Federal Reserve interest rate decisions, domestic macroeconomic data, or policy orientations?

Dai Kang: Current A-Share Market Risk Appetite Recovery Leads Fundamentals; Focus on Economic Data and US Monetary Policy

Currently, domestic policies to counter involution, promote consumption, encourage births, and stabilize real estate are gradually taking effect, and their subsequent effectiveness deserves attention. Current funding conditions are also relatively reasonable and abundant, so the core focus remains on the positive cycle of market risk appetite. Internally, September will reveal industrial added value, retail sales, and fixed asset investment data - these macroeconomic indicators need attention. The current recovery in A-share market risk appetite is ahead of fundamentals. From a funding perspective, easing expectations remain unchanged. If domestic LPR rates are reduced alongside the Federal Reserve's September interest rate decision, it would be a further favorable condition.

Host: From a global liquidity perspective, how will Federal Reserve interest rate policies affect the pace of A-share liquidity release, and will it change domestic residents' preference for high stock market returns?

Dai Kang: Federal Reserve Policy Has Limited Impact on A-Shares; Economic Resilience Expected to Support A-Share Independent Performance

Federal Reserve interest rate policy is an external factor and not the dominant driver of this A-share rally. Under the global trend of rate cuts and liquidity easing, I believe Federal Reserve rate cut expectations can only have timing impacts but cannot change A-shares' independent performance trend, with relatively limited impact on domestic residents' risk appetite. From the broader economic background, over the past few months amid global tariff disruptions, China has demonstrated its economic resilience, which provides important confidence support for A-shares' independent performance.

Host: In August's rally, which sectors performed most prominently? What were the underlying driving logics? Will this sector rotation trend continue in September? How should investors capitalize on investment opportunities from sector rotation?

Dai Kang: August Multi-Factor Resonance Sectors Performed Well; Future Opportunities Through Thematic Growth Rotation Logic

August markets showed characteristics of style switching and thematic rotation. In terms of corresponding sectors, those with outstanding performance included semiconductors, energy metals, software development, communications equipment, photovoltaic equipment, and components - all driven by multi-factor resonance. Whether this rotation trend can continue in September depends on changes in market risk appetite and new themes. In our recommended optimized barbell strategy, we increase allocation to corresponding high-beta varieties to capture excess returns. For subsequent thematic opportunities, these include domestic demand policies, the "15th Five-Year Plan," AI, robotics, innovative drugs, technology industry trends, semiconductor domestic substitution under deglobalization, defense under important event drivers, and strategic resource trends including rare earths, minor metals, and core strategic resources.

Host: You mentioned in reports that "global barbell strategy" is a strategic choice for high volatility times. How does the domestic optimized barbell strategy connect with the "global barbell strategy"? For example, when allocating domestic high-volatility growth stocks, should one also pair with overseas low-volatility assets (such as US Treasuries, high-dividend US stocks) to balance portfolio risk? How should the allocation ratios adjust based on global market dynamics?

Dai Kang: Market Underestimates US Economic Recession Risk; Appropriately Reduce Risk Exposure to US Assets

Under current market conditions, we recommend investors be relatively cautious toward US assets. I believe global markets currently underestimate future US recession risks. From an odds perspective, US stock valuations are expensive and contain asymmetric risks. From a probability perspective, while legislation may boost US economic growth short-term, I believe there are significant medium-term recession risks. Regarding US Treasuries, I suggest differentiating between short-term and long-term bonds - short-term US bonds can be actively allocated, while long-term US bonds carry uncertainty. Overall, I recommend appropriately reducing risk exposure to US assets.