Reviewing recent market performance, Hong Kong's Hang Seng HK Stock Connect China Central SOE Dividend Index fell 0.79% last week, while the Hang Seng Index declined 2.09% and the Hang Seng Tech Index dropped 3.06%. On the A-share front, the CSI SOE Dividend Index slipped 0.28%, with the CSI 300 easing 0.56% over the same period. (Data source: Wind, as of 2026/8/14, reflecting total return index yields.)

Hong Kong equities have continued to experience rapid sector rotation, with dividend assets showing notable structural divergence within their ranks. On one hand, traditional high-yield sectors like banking continue to anchor portfolios through steady earnings, strong dividend capacity, and undemanding valuations. On the other hand, cyclical high-dividend industries such as shipping are displaying greater earnings elasticity, supported by shifting global geopolitical dynamics and favorable industry conditions.

Overall, the current dividend strategy is not merely a defensive play but rather a fresh equilibrium between stable cash returns and improving fundamentals across select cyclical sectors. Banking remains one of the most representative high-dividend segments within the HK Stock Connect China Central SOE Dividend Index. As market styles continue to rotate, investor attention stays firmly fixed on low-valuation, steady-earning, and reliably dividend-paying assets.

Major state-owned banks are demonstrating solid operational resilience with relatively stable asset quality. Their low valuations and sustained dividend capacity make them attractive allocation choices in today's environment. From a dividend strategy perspective, the banking sector offers primarily stable earnings and cash payouts, serving as a portfolio anchor during periods of heightened market volatility.

In contrast to banking's stability, the shipping industry injects greater cyclical flexibility into dividend strategies. The Hang Seng HK Stock Connect China Central SOE Dividend Index carries substantial weight in the transportation sector, with shipping leaders such as COSCO Shipping Holdings and Orient Overseas International ranking among its key constituents. Recent global container shipping markets remain influenced by geopolitical tensions, port congestion, and route adjustments, which constrain effective capacity and support freight rate floors.

Against this backdrop, shipping leaders are poised to sustain resilience in profits and cash flow, as their high-dividend attributes align with industry prosperity. This convergence makes them a distinctive niche within dividend assets, blending cash returns with cyclical upside.

The HK Stock Connect China Central SOE Dividend Index offers superior yield and lower valuation metrics, boasting a dividend yield of 5.45% (versus 4.42% for the CSI Dividend Index), a price-to-book ratio of 0.57, and a price-to-earnings ratio of 6.95. Its total return index has gained 119% over the past five years, outperforming the Hang Seng Total Return Index by 105 percentage points. Meanwhile, the CSI SOE Dividend Index delivers a dividend yield of 4.38%, a PB of 0.86, and a PE of 8.84, with a five-year cumulative total return of 50%, exceeding the CSI 300 Total Return Index by 43 percentage points. (Data source: Wind, as of 2026/8/14)

Looking ahead, the low-interest-rate environment stemming from domestic rate cuts and the backdrop of a gradual economic recovery both favor dividend strategies. Under the market-cap management directive, central and state-owned enterprises exhibit strong willingness and capability to distribute dividends, enhancing the appeal of the HK Stock Connect Central SOE Dividend ETF Hua'an (513920) and the SOE Dividend ETF Hua'an (561060).

The HK Stock Connect Central SOE Dividend ETF (513920) stands as the market's first ETF combining Hong Kong listing, central SOE status, and dividend attributes in a single vehicle. It is also the largest ETF tracking the Hang Seng HK Stock Connect China Central SOE Dividend Index (HSSCSOY), which encompasses premium high-yield central SOEs from Hong Kong's equity market. Off-exchange alternatives include the Hua'an Hang Seng HK Stock Connect China Central SOE Dividend ETF Feeder Fund A (020866) and Feeder Fund C (020867).

The SOE Dividend ETF (561060) tracks the CSI SOE Dividend Index, which selects 100 stocks from state-owned enterprises with high cash dividend yields, relatively stable payout ratios, and adequate scale and liquidity, reflecting the overall performance of representative high-dividend SOEs in the A-share market. Off-exchange options include the Hua'an CSI SOE Dividend ETF Feeder Fund A (020461) and Feeder Fund C (020462).

Risk disclaimer: The above content is an objective introduction to the current constituent distribution of the underlying indices and does not constitute any investment advice or a guarantee of investment returns. Index providers may adjust index methodologies over time, and constituent weights may change dynamically. Investors should be mindful of concentration risks associated with certain heavily weighted constituents. This fund is an equity fund carrying higher risk and potentially higher expected returns, primarily investing in underlying index constituents and backup constituents. Its feeder funds track the target ETF's performance. The fund's expected returns and risks are higher than those of money market funds, bond funds, and hybrid funds, exhibiting risk-return characteristics similar to the underlying index. Fund management companies do not guarantee profitability or minimum returns. Past performance does not indicate future results, and the performance of other funds managed by the same manager does not constitute a guarantee of this fund's performance. Fund returns are subject to volatility risk; investors should exercise caution and carefully review the fund contract, prospectus, and other legal documents before investing.

MACD golden cross signals have formed, and these stocks are showing promising gains!