In the second quarter just passed, particularly since June, A-shares focusing on dividends and related thematic ETFs have undergone a significant correction. This has left some investors feeling anxious and uncertain. With the astonishing performance of technology stocks and their capital-siphoning effect, where should dividend investing go from here? Following the adjustment, have the various distinctive dividend strategy indices now shown better allocation value?
Dividend investing is one of the key areas of focus for Hu Yijiang, a fund manager in the Index Research and Investment Department at Hua Bao Fund. He currently manages several dividend-focused funds, including the S&P China A-Share Dividend Opportunities ETF Hua Bao (562060) and its feeder fund (Class A 501029, Class C 005125). Hu Yijiang pointed out that dividend strategies have seen a notable pullback recently, with related indices experiencing a maximum drawdown of up to 15%. However, this has also led to a significant increase in the dividend yields of indices such as the S&P China A-Share Dividend Opportunities Index, the CSI 800 Dividend Low Volatility Index, the CSI A500 Dividend Low Volatility Index, and the S&P Stock Connect Hong Kong Dividend Low Volatility Index. In terms of the increase, the dividend yields of A-share dividend indices like the S&P China A-Share Dividend Opportunities Index have risen by approximately 0.6-0.7%, while the S&P Stock Connect Hong Kong Dividend Low Volatility Index, as a Hong Kong dividend index, has seen its yield increase by 0.2%. From the perspective of dividend yield, dividends have entered a "sweet spot" for allocation.
The Rise in Dividend Yields for Dividend Strategy Indices
Data Source: Wind, Hua Bao Fund, as of 2026.6.30
Currently, Hu Yijiang serves as the fund manager for multiple dividend funds. Among them, the S&P A-Share Dividend Opportunities ETF Hua Bao (562060) and its feeder fund (Class A 501029, Class C 005125) track the S&P China A-Share Dividend Opportunities Index. The CSI 800 Dividend Low Volatility ETF Hua Bao (159355) and its feeder fund (Class A 023321, Class C 023322) track the CSI 800 Dividend Low Volatility Index. The CSI A500 Dividend Low Volatility ETF Hua Bao (159296) tracks the CSI A500 Dividend Low Volatility Index. The CSI 300 Free Cash Flow ETF Hua Bao (562080) and its feeder fund (Class A 024367, Class C 024368) track the CSI 300 Free Cash Flow Index. The S&P Stock Connect Hong Kong Low Volatility Dividend ETF Hua Bao (159220) and its feeder fund (Class A 022887, Class C 022888) track the S&P Stock Connect Hong Kong Low Volatility Dividend Index.
Hu Yijiang noted that the aforementioned CSI 300 Free Cash Flow Index did not see an increase in dividend yield. The main reason is that the index underwent a constituent adjustment in June, with stocks like Zijin Mining Group, Hengli Petrochemical, China Coal Energy, and Compass being added. The overall dividend yield of the newly added constituents was relatively low. He also pointed out that in mid-June this year, the CSI 800 Dividend Low Volatility Index, the CSI A500 Dividend Low Volatility Index, and the CSI 300 Free Cash Flow Index all completed their rebalancing. From a market capitalization perspective, a unified characteristic post-rebalancing for these three indices is a reduction in the number of absolute mega-cap stocks, leading to a decline in average market cap, although the overall median market cap did not change significantly.
Changes in Market Capitalization, ROE, etc., for 3 Dividend Indices After June 2026 Rebalancing
Data Source: Wind, Hua Bao Fund, as of 2026.6.30
Smart-Beta Product Tech ETF Hua Bao (515000) Assists in "Riding the Wave" of Technology
Beyond the dividend sector, the Tech ETF Hua Bao (515000) managed by Hu Yijiang has also seen impressive gains this year. As an ETF product tracking the four core technology sectors of "electronics + computers + communications + pharmaceuticals & biotechnology," it has once again demonstrated remarkable momentum in this market cycle, attracting significant attention. Hu Yijiang stated that as a smart-beta product in the growth sector, the Tech ETF Hua Bao (515000) differs from other technology-focused fund products primarily in that it uses a growth factor to dynamically help investors allocate to high-growth-potential sectors, potentially saving research time. This product is suitable for investors who do not need to capture unique opportunities in each technology sub-sector but aspire to the vast potential of technology's future, representing a more "hands-off" type of product within the tech space.
In June this year, the underlying index of the Tech ETF Hua Bao (515000), the CSI Technology Leaders Index, also completed its rebalancing. Hu Yijiang indicated that this rebalancing maintained the approach of "adding to positions in the direction of high growth momentum." Specific weight changes included increasing allocations to semiconductors, reducing allocations to communications equipment, and making slight increases to computer equipment and chemical pharmaceuticals, among others. After the rebalancing, the expected future net profit growth rate for the CSI Technology Leaders Index has further improved.
CSI Technology Leaders Index June 2026 Rebalancing Details (Changes by Secondary Industry)
Data Source: Wind, Hua Bao Fund, as of 2026.6.30
Overall Net Profit Growth Rate of the CSI Technology Leaders Index (Before and After June 2026 Rebalancing)
Data Source: Wind, Hua Bao Fund, as of 2026.6.30
Note: The individual stocks mentioned are for illustrative purposes only. Descriptions of individual stocks do not constitute investment advice in any form, nor do they represent the holdings or trading trends of any fund managed by the asset manager. Investing involves risks. Please carefully refer to the risk disclosure content attached at the end before investing.
Reminder: Market volatility may be high recently. Short-term gains or losses do not indicate future performance. Investors must invest rationally based on their own financial situation and risk tolerance, paying close attention to position sizing and risk management.
Fee Description: The subscription and redemption agents for the S&P A-Share Dividend ETF Hua Bao, CSI 800 Dividend Low Volatility ETF Hua Bao, CSI A500 Dividend Low Volatility ETF Hua Bao, CSI 300 Free Cash Flow ETF Hua Bao, Stock Connect Hong Kong Dividend Low Volatility ETF Hua Bao, and Tech ETF Hua Bao may charge a commission not exceeding 0.5%. On-exchange trading fees are subject to the actual charges by securities firms. For feeder fund fees, please refer to the fund's legal documents.
Risk Disclosure:
The S&P A-Share Dividend ETF Hua Bao and its feeder fund track the S&P China A-Share Dividend Opportunities Index. The base date for the S&P China A-Share Dividend Opportunities Index is 2004.6.21, and it was launched on 2008.9.11. The CSI 800 Dividend Low Volatility ETF Hua Bao and its feeder fund track the CSI 800 Dividend Low Volatility Index. The base date for the CSI 800 Dividend Low Volatility Index is 2013.12.31, and it was launched on 2024.5.21. The CSI A500 Dividend Low Volatility ETF Hua Bao tracks the CSI A500 Dividend Low Volatility Index. The base date for the CSI A500 Dividend Low Volatility Index is 2013.12.31, and it was launched on 2025.4.9. The CSI 300 Free Cash Flow ETF Hua Bao and its feeder fund track the CSI 300 Free Cash Flow Index. The base date for the CSI 300 Free Cash Flow Index is 2013.12.31, and it was launched on 2024.11.12. The S&P Stock Connect Hong Kong Low Volatility Dividend ETF Hua Bao (159220) and its feeder fund track the S&P Stock Connect Hong Kong Low Volatility Dividend Index. The base date for the S&P Stock Connect Hong Kong Low Volatility Dividend Index is 2011.1.31, and it was launched on 2017.2.20. The Tech ETF Hua Bao and its feeder fund track the CSI Technology Leaders Index. The base date for the CSI Technology Leaders Index is 2012.6.29, and it was launched on 2019.3.20. The composition of index constituents is adjusted according to the index methodology, and its back-tested historical performance does not indicate future index performance. The S&P A-Share Dividend ETF Hua Bao and its feeder fund are issued and managed by Hua Bao Fund. Selling agents do not bear responsibility for the investment or redemption of the product. Investors should carefully read the "Fund Contract," "Prospectus," "Fund Product Key Facts Statement," and other fund legal documents to understand the fund's risk-return characteristics and choose products suitable for their own risk tolerance. The fund manager rates the risk level of the S&P A-Share Dividend ETF Hua Bao and its feeder fund, CSI 800 Dividend Low Volatility ETF Hua Bao and its feeder fund, CSI A500 Dividend Low Volatility ETF Hua Bao, CSI 300 Free Cash Flow ETF Hua Bao and its feeder fund, S&P Stock Connect Hong Kong Low Volatility Dividend ETF Hua Bao and its feeder fund, and Tech ETF Hua Bao as R3 - Medium Risk, suitable for Balanced (C3) and above investors. The appropriateness matching opinion is subject to the selling institution. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Past fund performance does not predict future performance. Fund investment requires caution! Selling institutions (including the fund manager's direct sales channels and other selling institutions) assess the risk of the above funds according to relevant laws and regulations. Investors should promptly pay attention to the appropriateness opinions issued by the fund manager. The appropriateness opinions of various selling institutions may not necessarily be consistent, and the fund product risk rating results issued by fund selling institutions shall not be lower than the risk rating results made by the fund manager. The description of fund risk-return characteristics and the fund risk level in the fund contract may differ due to different considerations. Investors should understand the risk-return situation of the fund, combine it with their own investment objectives, horizon, experience, and risk tolerance to choose fund products carefully, and bear the risks themselves. The China Securities Regulatory Commission's registration of the above funds does not indicate a substantive judgment or guarantee of their investment value, market prospects, or returns.
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