A：In 2025, in the face of profound changes in the global economic landscape and market fluctuations, the Da Cheng Fund research team adhered to the concept of in-depth research and value exploration, effectively coping with the complex market situation. The annual GDP growth reached the set target at the beginning of the year, and significant achievements were made in areas such as capital market reform, the steady implementation of the new national nine policies, and the improvement of the quality of listed companies, creating a better environment for value investment. For 2026, the fundamentals of the Chinese economy remain stable, with continuous and stable macroeconomic policies emphasizing the boost of domestic demand and supply-demand balance. With profit recovery, industry sentiment will shift from elimination to competition, structural opportunities will become more prominent, and the bottoming out and rebound of the Producer Price Index (PPI) are expected to drive corporate profitability into a recovery cycle. The Da Cheng Fund research team will provide detailed interpretations of stock markets, bond markets, overseas, and mixed asset allocation strategies, and focus on investment opportunities in the trends of the AI technology wave against internal competition, policy optimization, and companies going global.

A：In 2026, the key to corporate profitability lies in the price elasticity brought about by supply contraction, which is the core factor in determining PPI. At the same time, intensified losses for businesses lead to a decrease in investment willingness, which, although affecting the overall economy to a certain extent, helps rebalance supply and demand.

A：A-share capital expenditures have been in a slight contraction state for more than a year. According to the financial reports of the first three quarters of 2025, only the automobile and electronics industries are expanding their capital expenditures, while other industries are reducing theirs. This indicates that the A-share market is facing a clear supply-demand rebalancing background.

A：In 2026, the A-share market will focus on the pace of fiscal expansion and the calibration of monetary policy in terms of liquidity environment. Over the past two years, the total policy has been expanded beyond normal levels, leading to liquidity expansion and increased risk appetite. For 2026, it is necessary to pay attention to the specific pace of fiscal expansion and whether monetary policy will continue to maintain countercyclical adjustments.

A：It is expected that by 2026, there will still be a significant increase in incremental funds flowing into the A-share market, including various types of funds such as insurance funds, private equity funds, and financing funds. At the same time, as market enthusiasm increases, there will be a loosening in activities such as IPOs and follow-on offerings, leading to an increased demand for funds. However, there is also a noticeable increase in fund outflows, resulting in an overall net increase in funds.

A：The main industry selection strategy mainly revolves around the industries that have a demand for going global (such as AI and demand spillover), areas where prices are rising due to supply contraction, and the trend of globalization. Among them, the expansion of major economies overseas is clear, the AI industry is prosperous and continuously expanding, and the demand for equipment in the manufacturing industry for export is growing rapidly. In addition, some niche industries face opportunities due to differences in tariffs, trade barriers, and other factors, while various aspects of the AI industry chain will also bring investment opportunities.

A：In the process of globalization, companies can address the issue of labor efficiency by improving management level and talent reserves. In the long term, globalization places higher demands on company management and talent reserves. Although the phenomenon of anti-inner wrapping in 2025 faces challenges because it is essentially a game process, different industries will gradually advance through wisdom, supply and demand balance, industry leaders' consensus, and policy environment support. It is still worth observing in the coming years its impact on industrial structure and corporate profitability.

A：The manufacturing investment strategy in 2026 will focus on industrial upgrading, globalization, and counter internal competition from three perspectives, including opportunities in energy and power systems, new demand brought by AI infrastructure, the initiation of AI applications, and the impact of counter internal competition on corporate profits.

A：In the first half of 2026, the performance of the AI industry chain will be promising, mainly based on the continued advancement of global large model capabilities. Significant progress has been made in multimodal models, such as Google's release of the GM 3 and Banana models, breaking expectations during the pre-training phase. With a series of large model releases based on Nvidia's B-series chips, market confidence in the AI industry chain will further strengthen.

A：Computing power, model applications, and three links have formed a positive flywheel: first, the performance of large models continues to improve, second, pure AI native application companies such as OpenAI have seen high-speed growth in performance, and third, internet giants like Google are empowering traditional businesses through AI technology and achieving good returns, indicating that in the future, Google and other CSP vendors will see a continued explosive growth in demand for computing power.

A：The seven major investment directions are divided into four major scarcity directions (North American power supply, storage, TSMC Karva, and upstream optical chips for light modules) and three major inflation directions (liquid cooling, cabinet-type interconnection, and HVDCSST vertical power supply related to power density improvement). Due to the continuous explosive growth in future computing power investment, the supply and demand relationship will become tense, even leading to supply shortages, and related listed companies are expected to receive certainty in rising prices. The field of optical communication has strong investment potential, especially in the training and reasoning stages, where optical communication becomes a bottleneck. In addition, the storage sector is promising, especially due to the increase in various storage demands brought about by the rise in AI reasoning, and the domestic storage manufacturers' willingness to expand production may exceed expectations, which is beneficial for the development of domestic semiconductor equipment. At the same time, liquid cooling, upstream PCB, and other subdivided fields also have structural opportunities.

A：It is expected that the technology market will continue to evolve in the first half of 2026, with increasing difficulty in structure and increasing attention to overall investment returns. In terms of model advancement, we look forward to more editable multimodal outputs, locally verifiable world models, preliminary realization of causal inference, and breakthroughs in the quality of online learning. In terms of application landing, the completion rate in strong structured fields is expected to increase significantly, but the difficulty in commercial returns growth is increasing. The capital expenditure growth rate is expected to maintain around 40% to 50%, and in the long term, there is uncertainty in the continuous rapid improvement of global capital expenditure investment returns.

A：In 2026, the overall bond market is showing a trend of consolidation and consolidation. In the medium to long term, interest rates are likely to remain at low levels. In the short term, the yield decline is temporarily hindered by institutional behavior, and attention should be paid to changes in institutional behavior. Judging from both the medium to long term and short term perspectives, with the favorable macroeconomic background for the bond market, it is advisable to learn to wait and seize the turning point opportunities after the consolidation and consolidation in 2026.

A：From a long-term historical perspective, the trends in the bond market are a reflection of the economic trends and changes in the financial structure. Before 2011, the bond market was mainly influenced by traditional economic lending; from 2011 to 2015, the shadow banking system and non-standard businesses became the core driving factors; from 2017 to the present, during the stage of non-standard rectification and financial supply-side reforms, the bond market has returned to its fundamentals, with the core influencing factors shifting to debt risk resolution. Overall yields are showing a downward trend, closely related to the central government's willingness and progress in resolving debt issues.

A：In the context of debt restructuring, the low interest rate environment is a result of macroeconomic policies alleviating debt pressure. Specifically, reducing interest rates (including principal and interest payments) to ease the debt burden on the private sector. Interest payments can be alleviated by maintaining low interest rates or further lowering them. At the same time, it is crucial for monetary and fiscal policies to work together, such as increasing deficit levels, increasing government bond issuance, etc., all of which require coordination and cooperation from the central bank to lower social financing interest rates and government debt pressure.

A：The key to easing the contradiction between supply and demand lies in five aspects: the central bank restarting the purchase of long-term government bonds and increasing the purchase amount; regulatory authorities adjusting the upper limit or corresponding parameters of bank interest rate-sensitive indicators, enhancing banks' capacity to participate in the government bond market; insurance institutions' stock and bond allocation undergoes rebalancing, increasing bond allocation as the cost-effectiveness of bonds improves; the increase in equity market returns prompts institutional investors to adjust their asset allocation; government departments adjust the maturity structure of bond issuance according to market demand to balance supply and demand. These potential changes will have a significant impact on interest rate trends under a bond-reducing background.

A：The allocation behavior of banking institutions is constrained by regulatory indicators and the pressure of core liabilities loss under the background of debt transformation, leading to a weakened absorption capacity, especially in the second half of 2025 and early 2026, they may face difficulties in allocating government bonds of medium and long-term limits. The allocation behavior of insurance institutions is influenced by the shift between stocks and bonds, with the enthusiasm for equity asset allocation increasing, leading to a slowdown in bond asset allocation. If this trend continues, it may maintain a similar allocation status to the second half of 2025 in 2026, making it difficult to provide strong support for the bond market. In addition, the supply of government bonds is still relatively high, and the supply-demand relationship is becoming tense, which may lead to pressure on long-term government bond yields, thereby affecting government financing costs and the overall debt transformation.

A：In the bond market investment in 2026, the most core idea is to take a long-term perspective. Given the current macroeconomic environment of low interest rates which may continue for several years, short-term institutional behavior is hindering the downward trend of bond market yields. Therefore, we need to see both the static supply and demand contradictions and focus on dynamic solutions. In the current stage, we should focus on interest-bearing asset allocation to earn interest income, and wait for the opportunity of capital gains brought by the downward trend of yields after consolidation. In the static environment, the first step is to seize and allocate the current interest-bearing assets to earn basic income. At the same time, pay attention to the inflection point of yield decline when the market stabilizes after fluctuations, which will be a good phase and opportunity for allocation.

A：Bond ETFs can be classified into interest rate bond ETFs, credit bond ETFs, and convertible bond ETFs based on their variety and maturity. Among them, interest rate bond ETFs and credit bond ETFs can be further subdivided into cash redemption type and in-kind redemption type.

A：The bond ETF market experienced rapid development in 2024 and 2025, with a total size reaching 720 billion yuan, but still has a lot of room for growth compared to stock ETFs. Especially in the second half of 2025, passive bond ETF products such as off-exchange index funds and bond ETFs experienced rapid development. The rapid development of the US bond ETF market is attributed to low fees, low turnover rates, reduced trading costs and friction costs in a low interest rate environment, certainty of returns, avoidance of investor behavior impact, reduced possibility of chasing highs and selling lows, and thus avoiding potential damage to expected returns.

A：The advantages of bond ETFs include high portfolio transparency (daily disclosure of PCF lists), high trading efficiency (supports T+0 trading, funds from sales are available on the same day), and policy support (such as flexible on-exchange collateral and benchmark market making), providing the ability for collateralization and leverage, helping to expand the scale of underlying assets with good liquidity.

A：Credit bond ETFs, as the market expands, have different characteristics between physical redemption types and cash redemption types. Physical redemption types can offset the impact of liquidity shocks on net asset value, protect the interests of existing holders, and are suitable for long-term holding; while cash redemption types can achieve flexible exits through on-exchange trading, with large on-exchange discounts and premiums fluctuations, arbitrage mechanisms, low trading costs, longer index tracking duration, and are suitable for short-term trading. In addition, cash redemption type credit bond ETFs have a wide selection range, strong liquidity, flexible index construction, and help achieve higher certainty returns.

A：Due to its longer duration and more aggressive nature, the science and technology innovation bond ETF usually yields higher returns during periods of strong performance in the bond market. In addition, compared to off-exchange index funds, science and technology innovation bond ETFs have unique characteristics such as the operating modes of physical redemption and cash redemption for credit bond ETFs. In the context of a low interest rate era, passive bond ETF products, with their lower fees, lower turnover rates, and advantages in strictly tracking indices and reducing tracking errors, are especially suitable for reducing the behavioral or psychological impact on investors in high volatility market environments. Therefore, under such market conditions, these products will be more favored and experience rapid development.

A：It is expected that in 2026, the macroeconomy will present a trend towards supply and demand rebalancing, with fiscal policy maintaining a necessary scale but potentially moderate intensity. There is greater pressure on the supply of interest rate bonds, while the level of long-term interest rates and term spreads has tended to be reasonable. Bond investment opportunities will depend more on the behavior of institutions and social allocation. At the same time, the equity risk premium is expected to continue to compress, with expected returns on equity assets exceeding those of pure bond assets, and excess returns will be concentrated in a few high prosperity, highly price-elastic sectors.

A：It is expected that the beta end of the Hong Kong stock market in 2026 will not be pessimistic, with the alpha end full of opportunities. Although the overall market may fluctuate, the downside risk is limited. Structural industries and sectors, especially key stocks, are expected to bring good investment opportunities. The valuation of the Hong Kong stock market is reasonable and cost-effective. It is expected that the Hang Seng Index will achieve good profit growth in 2026, and broad-based indices will outperform A shares. In terms of investment strategy, a dumbbell-shaped allocation is adopted, focusing on stable dividends and high-quality growth. At the same time, attention is paid to growth prospects and fundamental quality, while maintaining a certain overweight in cyclical assets.

A：It is expected that the US economy will continue to grow positively in 2026, but the cooling labor market may lead to a slowdown in economic growth. Personal consumption expenditure is still the main support of economic growth, but personal income growth and personal consumption expenditure may decline due to the impact of the labor market. The Federal Reserve's rate-cutting cycle may be coming to an end, with only one or two rate cuts expected. Although this round of rate cuts is beneficial to the US stock market, current stock valuations are high. Profit growth is expected to drive the index to continue to strengthen, but the index's growth may be lower than profit growth, and there may be periodic volatility.

A：In 2026, the market will exhibit low interest rate characteristics. Referring to overseas experiences such as Japan, Europe, and the United States, in a low-interest rate environment, passive investment products will usher in a period of massive development. Specifically, there will be a trend towards the indexation and ETFization of the bond market, and with the guidance of policies promoting long-term capital entering the stock market, the size of stock and bond ETFs has grown to 6 trillion and is expected to continue to accelerate expansion in 2026.

A：In 2026, with the low interest rate characteristics of the global economic environment, overseas investors' demand for diversified asset allocation will increase, especially the attention to innovative products such as multi-asset ETFs and equity-debt mixed ETFs will be enhanced.

A：The current economy is showing characteristics of the transition between old and new driving forces, with strong expectations but weak reality. The weak reality is mainly due to the drag on fixed asset investment caused by real estate, leading to a decline in year-on-year investment, weak prices, and profits. The strong expectations are reflected in the narrowing decline of the PPI, the gradual improvement of the CPI from negative to positive, and the increase in policy support for boosting domestic demand. It is expected that A-share earnings will stabilize and rise in 2026, exports will remain strong, the global economic environment will be favorable for demand, and a new round of technological innovation cycle (represented by artificial intelligence AI) will bring investment opportunities. Therefore, A-shares are expected to continue to rise in 2026, with the core driving forces coming from incremental funds and improved profitability.

A：In 2026, incremental funds can be expected. On one hand, large funds will continue to protect the A-share market, and medium to long-term funds (such as insurance funds, wealth management, and corporate funds) will increase their allocation to equity assets. On the other hand, the trading volume of A-shares is active, and margin trading leverage and supplementary funds continue to focus on stock investments. In addition, low-risk funds such as deposits are expected to increase their allocation to fixed income + equity products, and foreign funds will also increase their intention to allocate to A-shares with a weak US dollar environment and decreasing interest rate differentials between China and the US.

A：In terms of product selection, attention can be focused on fixed income, small and medium market cap quant and balanced broad-based products. For innovative targets, fixed income plus equity hybrid multi-asset ETFs can be considered, as these products have advantages in terms of trading convenience and stable performance. In the field of quantitative investment, small and medium market cap quant products still have potential. With the diffusion of market hot spots and trends towards balance, mid cap quant and products such as the 500 Index Fund and the 1000 Index Fund are worth considering. In addition, using a core-satellite allocation strategy, a stable core position can select products such as the CSI Free Cash Flow ETF, while balancing the market style with leading broad-based ETFs such as the CSI 300. For flexible varieties, attention can be paid to the development of artificial intelligence benefitting applications such as the ChiNext Artificial Intelligence ETF, as well as all-weather allocation in industrial metals-related products, such as non-ferrous metal futures ETFs, to achieve risk diversification and stable returns.