This year, market style rotation has accelerated, with investors seemingly playing a game of guessing which sector will lead next. In January, the commercial aerospace sector emerged strongly; in February, non-ferrous metals took over as the frontrunner, with resource-related stocks experiencing a vigorous rally. Amid this rapid switching of market leadership, the CSI 500 Index has positioned itself as an all-round performer, striving to embody both growth and value characteristics. It includes innovative forces from emerging industries as well as high-quality companies from traditional sectors, aiming to remain relevant through multiple style shifts.
Data illustrates this point: Wind data shows that as of March 13, the CSI 500 gained 13.83% over the past six months. Over the same period, the CSI 300 rose only 3.28%, while the ChiNext Index advanced 8.75%. (Past index performance is not indicative of future results, does not equal actual product returns, and investing carries risks which should be considered carefully.)
The CSI 500: Helping Investors Capture Key Trends An analysis reveals that the sector composition of the CSI 500 Index aligns closely with the national focus on cultivating new productive forces. Key sectors such as integrated circuits and semiconductors within electronics, photovoltaic, wind power, and energy storage within power equipment, embodied intelligence and industrial machinery within machinery, innovative drugs within pharmaceuticals and biologics, and aerospace within defense, are all significant components of the index.
As of March 11, the electronics sector weighting was 17.2%, power equipment accounted for 10.3%, while core sectors like non-ferrous metals, machinery, pharmaceuticals and biologics, and defense all had weightings exceeding 6%, providing precise coverage of high-growth market areas.
Notably, besides technology and growth sectors like electronics and power equipment, resource-related sectors such as non-ferrous metals also hold substantial weight. Factors including anticipated improvements in global liquidity, the start of a manufacturing restocking cycle, and growing demand from new energy and AI computing are expected to support prices for commodities like copper, aluminum, and rare earths, potentially providing positive contributions to the index's performance.
Overall, as a representative of core growth strength in the A-share market, the CSI 500 combines attributes of technological growth and cyclical recovery. It aligns deeply with major macroeconomic themes like fostering new productive forces and the upcycle in resource commodities, demonstrating strong contemporary relevance and allocation value. Historical performance supports this: since its base date, the index has surged 740.33% (an annualized return of 10.90%), outperforming other major A-share broad market indices.
Outperforming the Index: How Can Returns Be Further Enhanced? For exposure to the CSI 500 Index, a quantitative enhanced index strategy may be an optimal choice. Such strategies aim to closely track the index while seeking excess returns (alpha) through active management techniques like quantitative models, combining the transparency of passive investing with the potential upside of active management.
The Great Wall CSI 500 Index Enhanced Fund (Class A: 006048; Class C: 007413) is a representative product of this strategy. Managed by Lei Jun, Assistant General Manager and Head of Quantitative and Index Investment at Great Wall Fund, the fund seeks to deliver returns that exceed its benchmark while tracking the index.
It is noteworthy that Great Wall Fund's quantitative and index team has fully integrated AI models, applying them deeply in areas like sector deviation control and stock selection to enhance the quantitative enhancement strategy. The fund's quarterly report indicated continuous optimization of AI algorithms for factor discovery in the last quarter, improving factor adaptability across different market conditions through adversarial data training and utilizing AI for multi-factor combinations. The alpha factors have demonstrated relatively stable historical performance while maintaining strict control over various risk exposures.
By combining index tracking with active enhancement, the fund has delivered strong historical performance. Fund reports show that as of December 31, 2025, the Class A shares of the Great Wall CSI 500 Index Enhanced Fund delivered a cumulative return of 126.89% since its inception on August 13, 2018, significantly outperforming the CSI 500 Index (48.41%) and its performance benchmark (46.90%) over the same period. It also substantially outperformed its benchmark over the past six months, one year, three years, and five years, demonstrating significant excess returns. Furthermore, according to China Galaxy Securities data, as of the end of February this year, the fund's Class A shares ranked in the top 10 among peer enhanced index equity funds (Class A) for their one-year, three-year, and five-year performance, ranking 5th out of 214, 4th out of 141, and 6th out of 99, respectively.
Due to its consistent enhancement capability, the fund has received recognition from several professional rating agencies. The Class A shares have been awarded a three-year five-star rating for tool funds by Guotai Junan Securities, three-year and five-year five-star ratings by China Merchants Securities, three-year and five-year 5A ratings by TX Investment Consulting, and a five-year five-star rating by Jian Jinxin. (Rating data sourced from the respective agencies on specified dates; past fund performance and ratings are not indicative of future results.)
With supportive policies in place, it appears an opportune time to consider allocations to mid-cap growth. For individual investors, considering the Great Wall CSI 500 Index Enhanced Fund could be a practical choice for seeking alpha returns while capturing beta exposure.
Fee Structure for the Great Wall CSI 500 Index Enhanced Fund: Subscription fee for Class A shares (Amount M): M < 500,000 RMB, fee 1.2%; 500,000 RMB ≤ M < 2 million RMB, fee 0.8%; 2 million RMB ≤ M < 5 million RMB, fee 0.4%; M ≥ 5 million RMB, a flat fee of 1,000 RMB per transaction. Class C shares have no subscription fee. Redemption fee for Class A shares (Holding Period T): T < 7 days, fee 1.5%; 7 days ≤ T < 365 days, fee 0.5%; 365 days ≤ T < 730 days, fee 0.25%; T ≥ 730 days, fee 0%. Redemption fee for Class C shares (Holding Period T): T < 7 days, fee 1.5%; T ≥ 7 days, fee 0%. The fund's management fee is 1.0% per annum, custody fee is 0.15% per annum, and Class C share service fee is 0.30% per annum. Applicable sales fees are subject to the fund's legal documents and sales agency rules effective at the time.
Performance Notes: (1) The Class A shares were established on August 13, 2018. The fund manager for the past five years has been Lei Jun (since November 30, 2018). Annual performance/benchmark returns for Class A for 2021, 2022, 2023, 2024, and 2025 were 26.46%/14.83%, -18.66%/-19.30%, 4.01%/-7.01%, 5.54%/5.40%, and 43.01%/28.81%, respectively. Class C shares were established on May 9, 2019. The fund manager for the past five years has been Lei Jun (since May 9, 2019). Annual performance/benchmark returns for Class C for 2021, 2022, 2023, 2024, and 2025 were 26.09%/14.83%, -18.90%/-19.30%, 3.69%/-7.01%, 5.22%/5.40%, and 42.58%/28.81%, respectively. (2) Data is from fund periodic reports,截至 December 31, 2025.
Risk Warning: Funds carry risks; investors should exercise caution. Before investing, carefully read the fund's Contract, Prospectus, and other legal documents. The aforementioned fund has been assessed by the manager as R4 - Medium-High Risk, suitable for clients with a C4 - Aggressive or higher risk tolerance. The fund manager manages the fund's assets with diligence and good faith but does not guarantee profits or minimum returns. The fund industry in China has a short history, which may not reflect all stages of stock and bond market development. The performance of other funds managed by the manager does not guarantee this fund's future performance. Past performance and net asset value do not indicate future results. This material is for promotional purposes only and is not a legal document. Any information is subject to the latest version. This product is issued and managed by Great Wall Fund. Selling agencies do not bear responsibility for the product's investment, payment, or risk management. Applicable subscription/redemption fees and sales charges are subject to the effective fund legal documents and sales agency rules at the time. The fund manager reminds that every citizen has the obligation and right to report money laundering crimes. All citizens should strictly comply with relevant anti-money laundering laws and regulations.
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