Market Review and Key Insights: In Hong Kong stocks, the Hang Seng Stock Connect China Central SOE Dividend Index fell 0.67% last week, the Hang Seng Index declined 0.74%, and the Hang Seng Tech Index dropped 2.12%. For A-shares, the CSI State-Owned Enterprise Dividend Index decreased by 2.69%, while the CSI 300 Index fell 2.19%. (Data source: Wind, as of 2026/3/20; all figures represent total return index performance.)

Driven by the ongoing global market shift from growth-oriented to value-oriented investments, the Hang Seng Stock Connect China Central SOE Dividend Index demonstrated relative stability this week. Persistent concerns over the AI sector, including debates about an "AI bubble" and fears of "AI disrupting software companies," have heightened risk aversion among investors. Consequently, "HALO assets"—characterized by high replacement costs, stable cash flows, and resistance to technological displacement—have emerged as key destinations for避险 capital. Against this backdrop, the Stock Connect Central SOE Dividend Index, with its unique asset composition, aligns with the long-term preference for certainty among investors, showing strong resilience in a volatile market.

The value of "HALO assets" is becoming increasingly prominent, with避险 demand driving sustained capital inflows. Recent market apprehensions regarding the tech sector continue to unfold. On one hand, investors are scrutinizing the return efficiency of substantial AI-related capital expenditures, raising doubts about future profitability for related companies. On the other hand, rapid iterations in AI technology have sparked concerns about potential disruption to the business models of certain software firms. This environment has led to a noticeable shift in capital preference from growth stocks reliant on technological narratives—which often carry high valuations—towards traditional sectors possessing solid economic moats, clear asset structures, and strong earnings certainty. Constituents of the Hang Seng Stock Connect China Central SOE Dividend Index are predominantly concentrated in heavy-asset sectors like energy, ports, and utilities. These assets feature high entry barriers, stable depreciation and cost structures, and are difficult to displace with AI technology, making them typical "HALO assets." Their stable dividend-paying capability and risk-resistant attributes make them ideal "safe harbors" during the current phase of heightened risk aversion. From a capital flow perspective, southbound capital has continued to see net inflows, consistently attracting allocation-oriented funds.

The Stock Connect Central SOE Dividend Index offers a higher dividend yield and lower valuation. The Hang Seng Stock Connect China Central SOE Dividend Index boasts a dividend yield of 5.52% (compared to 4.62% for the CSI Dividend Index), with a Price-to-Book (PB) ratio of 0.67 and a Price-to-Earnings (PE) ratio of 7.61. Its total return index has accumulated a gain of 141% over the past five years, outperforming the Hang Seng Total Return Index by 136%. The CSI State-Owned Enterprise Dividend Index has a dividend yield of 4.55%, a PB ratio of 0.91, and a PE ratio of 9.12. Its total return index has achieved a cumulative return of 61% over the past five years, delivering 58% in excess returns relative to the CSI 300 Total Return Index. (Data source: Wind, as of 2026/3/20)

Looking ahead, the domestic interest rate cutting cycle's low-rate environment and the context of weak economic recovery both favor dividend strategies. Furthermore, strengthened by the guidance of market value management, central state-owned enterprises demonstrate strong willingness and capability to pay dividends. Consequently, the Stock Connect Central SOE Dividend ETF (513920) and the State-Owned Enterprise Dividend ETF (561060) present relatively high allocation value.

Stock Connect Central SOE Dividend ETF (513920) Product Overview: The Stock Connect Central SOE Dividend ETF (513920) is the first ETF in the market to combine exposure to Hong Kong stocks, central state-owned enterprises, and dividend attributes. It is also the largest ETF tracking the Hang Seng Stock Connect China Central SOE Dividend Index (HSSCSOY), which comprehensively includes high-quality, high-dividend central SOEs listed in Hong Kong. Related offshore products include: Hua An Hang Seng Stock Connect China Central SOE Dividend ETF Link A (020866) / Link C (020867).

State-Owned Enterprise Dividend ETF (561060) Product Overview: The State-Owned Enterprise Dividend ETF (561060) tracks the CSI State-Owned Enterprise Dividend Index. This index selects 100 stocks from state-owned enterprises based on high cash dividend yield, stable dividend payments, and certain scale and liquidity, reflecting the overall performance of representative high-dividend SOEs in the A-share market. Related offshore products include: Hua An CSI State-Owned Enterprise Dividend ETF Link A (020461) / Link C (020462).

Risk Disclosure: The above content objectively describes the current constituent distribution of the target indices and does not constitute any investment advice or guarantee of investment returns. Index companies may adjust the index compilation methodology in the future, and the composition and weighting of index constituents may change dynamically. Please be aware of risks associated with potentially high concentration and significant weightings of certain index constituents. This fund is an equity fund, representing a fund category with relatively high risk and expected returns. It primarily invests in constituent stocks and alternative constituent stocks of the target index. Its feeder fund mainly aims to closely track the performance of the target index by investing in the target ETF. The expected returns and risks of this fund are higher than those of money market funds, bond funds, and hybrid funds, exhibiting risk-return characteristics similar to the target index. The fund management company does not guarantee that the fund will be profitable, nor does it guarantee a minimum return. The past performance of the fund is not indicative of its future results. The performance of other funds managed by the fund manager does not constitute a guarantee of this fund's performance. Fund product returns are subject to volatility risks. Investment involves risks; please invest cautiously. For details, please carefully read the fund's contract, prospectus, and other legal documents.