A：Macroeconomic performance is relatively stable in 2025, and economic data and confidence have improved compared with the past three years. The GDP growth target of 5% was achieved, but the structure was unbalanced. Exports (especially high-end manufacturing exports driven by AI demand) and durable goods consumption performed well, while traditional real estate, coal, and food and beverage industries were relatively weak. The macro-economy is expected to remain stable in 2026, and the intensity of steady growth policy will shift from extraordinary to conventional. The bond market is expected to provide stable coupon returns with limited capital gains; the equity market is optimistic about the continuation of the slow bull pattern and experiencing a market switch from valuation repair to earnings repair.

A：The equity market performed well and achieved good money-making effects, but the industry distribution was uneven. Non-ferrous, communications, electronics and other industries performed well, while the stock prices of traditional pro-cyclical industries such as real estate, coal and food and beverages in mass consumer goods were weak.

A：Bond market interest rates are operating in a narrow range of volatility in 2025, and the smooth macro environment and relatively restrained monetary easing have led to limited interest rate downside factors, while not supporting a significant increase in interest rates. Ten-year Treasury bonds have basically fluctuated between 1.6 and 1.9.

A：The convertible bond market will continue to rise in 2025, and in addition to contributing to earnings following the rise in underlying stocks, rising levels of convertible bond valuations (premiums) have become an important source of earnings. The unbalanced supply and demand environment in the convertible bond market has led to continued high and high volatility in the conversion premium, providing excess returns for the Fixed Income Plus Fund.

A：The policy tone emphasizes promoting stable economic growth, a reasonable rebound in prices, promoting investment to stop falling and stabilize, formulating and implementing plans to increase urban and rural residents' income, and focusing on stabilizing the real estate market. In terms of consumption policy, it will continue to be an important starting point for expanding domestic demand, but there will be structural adjustments, and service consumption will be exerted.

A：In 2025, the growth rate of capital expenditure and inventory growth of listed companies have dropped to the low point of the past 20 years, which reflects that various industries are going through the process of continuous de capacity and de stocking. With most industries experiencing capacity clearance in 26 years, in the macro environment of stable demand, the improvement of industry supply and demand pattern has brought about a price recovery, thus driving the PPI year-on-year in the second half of the year is expected to turn positive and further repair.

A：The anti-roll policy will continue to advance in 2026, with some industries as the main focus in the initial stage. The policy will help the industry to better complete the profitability improvement brought about by capacity clearance and price improvement. The tone of monetary policy in 2026 is expected to be similar to that in 2025, with the overall policy remaining relatively accommodative, but with a trade-off between steady growth and risk prevention.

A：The bond market went through an adjustment phase in 2025, with the central bank guarding against potential financial risks through liquidity controls. Interest rates that are too low can lead to risks, while too high is detrimental to the endogenous growth momentum of a weak economy, indicating that monetary policy is trading off at both ends.

A：Equity market valuation repair and earnings improvement in 2025 contributed to the return, the main index valuation has returned to above the median, at a relatively safe level, but further valuation improvement will bring limited scope for returns, the core source of earnings in 2026 will be earnings improvement.

A：Equity markets will shift from valuation repair to earnings repair in 2026, and attention needs to be paid to the impact of the bottoming out of the real estate cycle on the bond market and the risk of inflation expectations from a rebound in PPI. The convertible bond market is facing high premium and volatility characteristics, stock contraction and demand growth may lead to increased volatility of convertible bond assets, for fixed income plus investment strategy, equity asset allocation will be more important.

A：In the first quarter, the bond market shifted from easing expectations to tightening reality. At the beginning of the year, the central bank suspended the open market bond buying operation, resulting in a rapid convergence of the capital chain, the 10-year bond in mid-March touched the year's high near 1.9 percent, up about 30 BP from the low at the beginning of the year. Entering the second quarter, Sino-US trade frictions escalated more than expected, interest rate varieties continued to fluctuate at low levels after favorable one-time pricing, while credit varieties performed more stably, especially after the expansion of credit bond ETFs in June, credit spreads compressed the market significantly.

A：In the third quarter, the bond market gradually desensitized to the impact of tariffs, the market-led logic from the domestic anti-roll policy to improve the repair of corporate earnings expectations, and the technology bull market narrative comeback, the stock bond seesaw effect increased, the ten-year bond yields and the CSI 300 in the same direction, and in September again reached a high of 1.9 near the year.

A：In the fourth quarter, the market appeared structural differentiation. Although the central bank restarted to buy bonds, but the long end of the interest rate varieties due to supply concerns and sales of new regulations on the impact of weak shocks; on the contrary, short and medium-term ordinary credit bonds to obtain stable financial support, the performance is relatively strong, showing the long end and short end of the interest rate and credit structural differentiation.

A：In the volatile market in 2025, the contribution of coupon income increased significantly, on the one hand, because most credit varieties lack direct shorting tools, weakening the pressure of valuation volatility.

A：The driving factors for the inflow of funds into the credit bond market include the expansion of the credit bond ETF in June, the emergence of the Kechuang bond ETF in July, and the demand for capital allocation brought about by the opening of amortized cost method funds, especially credit bonds with a maturity of 3 to 5 years, and the inflow of funds caused by the relocation of deposits, including changes in the allocation of wealth management and insurance funds.

A：In the 2026 outlook, with the amortized cost method fund opening tide, deposit moving and insurance opening and other factors, the credit bond market will face changes in the structure of supply and demand, interest rate bond supply to maintain a high level but the short end of money, need to pay attention to the ability of institutions to undertake. At the same time, the pace of moderate inflation is not enough to bring the bond market into a bear market, but need to be wary of the negative impact of the contradiction between supply and demand and re-inflation expectations. Strategically, adopt a volatile start, wait for the return of the odds space, focus on short and medium coupon strategies, flexibly adjust the relationship between moderate monetary easing and the rebalancing of supply and demand structure, and focus on structural opportunities and excess returns from product innovation.

A：In 2025, our short debt series crossed the band and showed hard power in the face of adversity. The overall pullback performance was excellent, with both the maximum pullback and maximum pullback repair days outperforming the market-wide average, and the performance was also more prominent in the market-wide average performance. This is due to our precise grasp of the positioning and thinking of the short bond series, aiming to pursue through the bond market bull and bear market, no matter how the market changes to achieve stable positive returns, rather than pursuing a high yield ceiling. In 2026, economic fundamentals are expected to remain under some pressure, monetary policy will remain accommodative, there is room for rate cuts, and funding is expected to continue to remain accommodative. However, the strong performance of the equity market may lead to the return of insurance and bank wealth management funds to the bond market, and the weakening of long-term stable allocation forces. Therefore, although the bond market has more opportunities than risks, but in the short term by rising inflation expectations, equity commodity strength and government debt concentrated supply and other factors, volatility may increase. In terms of investment, we will adhere to the characteristics of sound risk-return, obtain stable income under the premise of controlling withdrawal, adopt the investment strategy of short-and medium-term long-term credit bonds, flexibly use leverage and other swing operation means, and take into account the liquidity and profitability of the portfolio.

A：For investors in short bond products, in addition to yield, daily win rate, maximum withdrawal speed, number of consecutive withdrawal days and maximum withdrawal repair days are also crucial evaluation indicators. We not only pay attention to income, but also pay more attention to obtain stable investment income under the premise of controlling the withdrawal, so as to realize the "stable happiness" of investors ".

A：In 2025, the central bank will vigorously put liquidity, with buyout reverse repo and medium-term lending facility (MF) as the main increase, forming the rhythm of the 5th, 15th and 25th of each month. In addition, a downgrade operation was carried out to release long-term liquidity of about 1 trillion yuan. Under the central bank's investment efforts, the overall liquidity showed two stages of changes: the first stage from the beginning of the year to around the Spring Festival, liquidity is tight; the second stage from mid-March to the end of the year, with the slowdown in credit growth and the central bank's monetary policy support, liquidity to maintain a stable volume and price of the situation.

A：The market's concerns are mainly based on several aspects. First of all, from the supply point of view, since the end of last year, the state-owned banks to undertake the space of ultra-long bonds due to tight indicators and significantly narrowed, while insurance companies continue to buy ultra-long bonds led to the narrowing of the long-term gap. Second, although the combined net issuance of government and local bonds will be about 7 trillions or 8 trillions in 2025, the regulator has not seen effective measures to ease the supply pressure on ultra-long bonds in the future. However, from the beginning of the year, the insurance opened the door better than expected, increasing the allocation of ultra-long government bonds and local bonds; in addition, ultra-long bond yields close to 50BP, further upward resistance.

A：In response to the pressure on the supply and demand of ultra-long bonds, possible measures include: First, the Ministry of Finance may comprehensively consider various factors to adjust the bond issuance period; second, the central bank may maintain a low level of social financing costs, which actually shows that it does not want bond yields. Significant upward movement, so it may adopt open market operations and secondary market purchases of government bonds to adjust the yield curve and supply pressure; third, although the current large state-owned banks are limited by the Basel indicators, but there may be room for adjustment in the calculation formula and factors, coupled with this year's capital injection, its ability to allocate ultra-long debt may be improved.

A：According to the central bank's latest statement, the low cost of social financing has reduced market expectations for interest rate cuts. This is reflected in the trend of interest rate swaps, floating rate bond pricing and bond term spreads, and the expected pricing of interest rate cuts is neutral. If domestic economic fundamentals begin to come under pressure in the second quarter and counter-cyclical adjustment policy is expected to heat up, there may be trading opportunities where monetary policy is stronger than expected.

A：Although the anti-roll policy, the development of the AI industry and the turmoil in the international situation have led to a rise in the prices of precious metals and non-ferrous metals, and the market's expectations for inflation this year have risen, the current probability of a sharp increase in the price of downstream consumer goods is unlikely. The CPI pivot is expected to be near zero year-on-year in 2026, and negative year-on-year PPI growth will continue to narrow and may return to positive, but further observation is required. The market's current expectations for inflation may be higher than the actual level, and if inflation is lower than expected, it will bring swing trading opportunities.

A：Interest rate debt market risk in 2026 arises primarily from changes in macroeconomic fundamentals, inflationary trading, supply and demand pressures and risk appetite. Opportunities, on the other hand, come mainly from weaker fundamentals, unanticipated monetary policy easing and external shocks. Strategically, it is recommended that the bottom position maintain a neutral allocation, and pay close attention to the above-mentioned aspects of the possible expected difference, flexible participation in long-term interest rate bond swing trading.

A：We believe that U.S. stocks will be significantly more volatile in 2026 than in 2025. At present, it is still in a low fluctuation position, so it is necessary to do some fluctuation protection. By historical comparison, the current trend of Nvidia's stock price is similar to that of Cisco, the leading stock during the 1990 s dot-com bubble, which may mean that U.S. stocks are currently in the upward phase of the late 1990 s, but the turning point of the market and the bursting of the bubble are also approaching.

A：At the beginning of 2026, gold was one of the asset classes that rose the most. This was mainly due to the Greenland incident, which led to a loss of confidence in U.S. credit, especially when the U.S. stock support line was broken. Compared to Trump's previous policy shocks, the market chose gold over U.S. stocks this time, reflecting a shift in perception of dollar credit from quantitative to qualitative.

A：Based on historical experience, gold bull markets tend to top out of the front high and then turn 3 to 4 times. Starting from the beginning of the Russian-Ukrainian war in 2022, if US $1800 is taken as the starting point of this bull market, the end point of the gold bull market may reach US $5000 to US $7000. In addition, the current trend of gold is similar to the 1970 global stagflation period, with the fiat currency credit instability and geopolitical frequency, the gold bull market will continue, not easy to say the top.

A：Compared to gold, industrial metals prices are currently relatively low, especially copper and aluminum, which may have the opportunity to make up. Global assets are still in the continuation of the bubble market in 2026 and need to be wary of volatility amplification. The dollar is expected to continue to depreciate, but the magnitude is likely to be moderate, interest rates on the long end of U.S. debt are unstable, and bubble assets represented by U.S. stocks and gold will enter an accelerated upward phase, with gold likely to outpace U.S. stocks. Overall, embracing physical assets is better than financial assets, and among financial assets, stocks are better than bonds, but 2026 is also a year of crisis disorder, so be prepared for downside risk protection and volatility upside.

A：For 2026 funding, we will analyze and forecast the funding structure based on 2025. Insurance funds, as the ballast stone of the stock market, are expected to increase the inflow of about 760 billion; pension funds may slightly increase their positions, with about 150 billion new funds; financial sub-funds are expected to increase by about 600 billion; net inflows of foreign capital may be uncertain due to exchange rates and other factors, but there is a potential possibility of more net inflows; individual investors enter the market through funds and other means, and the potential sources of funds can reach tens of billions. On balance, funding is expected to remain relatively optimistic in 2026.

A：We think the height and length of the stock market in 2026 may be determined by individual investors. Although it is impossible to give a specific point forecast, we are optimistic about the overall upward direction of the stock market and analyze it based on fundamentals, capital, sentiment and policy. In terms of capital, we have conducted a detailed analysis and recommended that investors strengthen their confidence in 2026 and strive for a better return on investment.

A：We recommend building a broad asset allocation portfolio, including A- shares, Hong Kong stocks, U.S. stocks, commodities and bonds. In A- share assets, it is recommended to adopt a core plus satellite strategy, the core configuration of the CSI A500 etf, the satellite structure is recommended to layout technology growth and cash flow dividend related assets.

A：We think AI is likely to be the main line in 2026, as it represents a bridgehead for a new generation of technology. Large factories in China and the United States are continuing to invest in capital expenditure. Even if the business has not yet formed a closed loop, the practical application has penetrated into all aspects of life, and the industry has begun to create returns and productivity.

A：In 2026, the optical module business is expected to grow significantly. For example, the market demand for 1.6T optical modules will be increased, while 800G optical modules will continue to be shipped. The average market share growth is expected to be around 150 per cent, with an optimistic forecast of up to 200 per cent. In addition, the new "light in the cabinet" trend may lead to new business growth points that are four or five times larger than the existing market.

A：Choosing the right communication sector index and ETF is crucial because the yield gap can be very large. The data show that the income gap between different indices can range from 15 to 80 per cent in a year. Therefore, it is recommended that investors conduct in-depth research on different indices within the same track to select indices that better match future market developments or ETFs that have performed well in the past.

A：Semiconductor equipment plays a vital role in chip manufacturing, especially thin film deposition equipment and lithography machines, which involve almost every link, accounting for about 20% of production. At present, the localization rate is low, the lithography machine of advanced process is still zero, and the localization rate of CMP equipment (chemical mechanical polishing equipment) is relatively high, reaching about 40%.

A：There are two main reasons for the sharp rise in semiconductor equipment ETF in the first year: first, the demand for advanced process expansion, such as GPU manufacturers continue to invest funds to expand production, driving the demand for etching equipment and thin film deposition equipment; The second is the price increase and production expansion plan of the memory chip market. It is estimated that the price increase of memory chips may exceed 100 in 2026. Relevant manufacturers need to increase production capacity, which is also inseparable from the support of etching and thin film deposition equipment.

A：The price increase and expansion plan of the memory chip market will prompt memory chip manufacturers to continue to put into production, in which etching equipment and thin film deposition equipment occupy an extremely important position in the production of such chips, which determine the performance of memory chips. Although there are some storage ETFs in the market, their proportion is relatively small, about 17%. Compared with other types of chips, this proportion is not enough to bring a large number of investment opportunities. However, under the logic of memory chip price increases, investors may turn to the purchase of semiconductor equipment ETFs, as the expansion will drive growth in demand for semiconductor equipment as a whole, especially etching machines and film deposition equipment.

A：The popularity of the 159516 Semiconductor Equipment ETF is due to its more comprehensive and representative constituent stocks, including not only the CRE Semiconductor Equipment segment, but also other important semiconductor equipment companies that are not included in the CRE Semiconductor Equipment Index. In addition, the ETF focuses on the field of pure semiconductor equipment and does not involve parts such as GPU and memory chip design, so it is more pure in purity.

A：Gaming ETFs are a fundamentally better choice at the moment because of their continued release, overseas revenue growth and the potential for explosive games. For AI applications, it is recommended to adopt a "no rabbit, no eagle" strategy and wait for a clearer catalytic event before investing. At the same time, the smart car sector still needs more catalysis to form investment opportunities due to fierce market competition.

A：In terms of new energy, energy storage and solid-state batteries are worthy of attention. In the main line of innovative drugs, China's patent import, ADC drug sales and research and development progress of small nucleic acid drugs brought by the US patent cliff are worthy of attention. In terms of non-ferrous gold, the gold market is still to be continued. Mining ETF has better pricing power because it contains a variety of mineral resources and deserves investors' attention. In addition, the securities sector is expected to rise after improved performance, grid equipment exports and the A500 index are also bright spots in the configuration recommendations.