So far this year, the A-share market has been characterized by wide fluctuations and rapid style rotations. The market rose then fell in Q1, with the Shanghai Composite Index reaching a periodic high before experiencing a pullback due to changes in the external environment and expectations. Since April, market style divergence has intensified further, with capital rotating between growth and value sectors at a significantly accelerated pace. Against this backdrop, investment tools featuring balanced allocation that can adapt to diverse market environments are increasingly gaining investor attention. Recently, the Great Wall Zhiyue Balanced Hybrid Securities Investment Fund (Class A: 027035; Class C: 027036) from Great Wall Fund has launched its initial offering. By empowering balanced allocation with an active quantitative strategy, it may be a favorable choice for investors to capture current market opportunities.
As an active quantitative fund, Great Wall Zhiyue Balanced uses the CSI 500 Index as its primary performance benchmark. It employs an "AI + Multi-Factor" quantitative model to select stocks across the entire market, aiming to build an investment portfolio with a mid-cap balanced style and pursue stable returns amidst market rotations. The fund is managed by Lei Jun, Assistant General Manager of Great Wall Fund and Head of the Quantitative and Index Investment Department. Leveraging a mature quantitative investment research system and considering current market style evolution trends, the fund seeks to develop investment strategies suited to the market environment.
Regarding the product's strategic positioning, Lei Jun indicated that the market style might gradually shift from the growth dominance seen in 2025 towards a more balanced pattern between growth and value in 2026. Future periodic rotations and structural divergences may become more frequent. A mid-cap balanced strategy benchmarked against the CSI 500 could be a preferable choice to adapt to these market changes.
Lei Jun further explained that benchmarking against the CSI 500 offers multiple advantages for Great Wall Zhiyue Balanced.
Firstly, the CSI 500 Index possesses inherent balanced characteristics. It has a differentiated positioning compared to the CSI 300, which focuses on large-cap blue-chips, and the ChiNext Index, which leans towards high growth. Its industry distribution is broad, covering sectors like electronics, power equipment, and pharmaceuticals & biotech related to technological innovation and industrial upgrading, while also encompassing cyclical value sectors such as non-ferrous metals, non-bank finance, and basic chemicals. This balanced and diverse industry structure helps mitigate risks from single-style volatility and may be better suited to the current rapidly rotating market environment.
Secondly, mid-cap stocks provide an excellent application scenario for quantitative strategies. Constituents of the CSI 500 Index are primarily mid-cap companies with market capitalizations between 10 billion and 49.9 billion yuan, accounting for nearly 70%. The sector exhibits high activity and ample liquidity. Coupled with significant profit improvement and strong earnings recovery momentum among mid-cap enterprises in Q1, this creates favorable conditions for quantitative models to capture alpha.
Thirdly, the long-term performance of the CSI 500 Index offers valuable reference. Reviewing its historical performance, the CSI 500 Index has demonstrated relatively good returns and moderate volatility in complex market environments, potentially providing investors with a favorable holding experience.
In the current market environment, sector rotations and structural divergences may become the norm, posing significant challenges to single-style investment strategies.
Looking ahead, brokerages believe the divergence between blue-chip and growth stocks may gradually weaken in the later market, potentially entering a period of "balanced alternation." Capital is unlikely to concentrate solely on one type of asset but may rotate among different sectors based on metrics like the price/earnings to growth ratio (PEG).
Great Wall Zhiyue Balanced, benchmarked against the CSI 500, leverages the advantages of quantitative investing to balance growth and value and achieve balanced exposure across various sub-sectors. It aims to capture growth opportunities from industrial upgrading while also uncovering investment opportunities in cyclical value sectors, thereby enhancing the portfolio's adaptability and stability. Fund manager Lei Jun stated that besides its strategic advantages, the fund also adopts a floating management fee structure, making it the first floating fee product under Great Wall Fund. Management fees will be charged in tiers based on holding period and fund performance, with rates floating in both directions, aiming to deeply align with and share interests based on the investor's holding experience.
Great Wall Fund has deep expertise in quantitative and index investing, with an experienced investment research team and a robust system. Fund manager Lei Jun possesses years of quantitative investment management experience, has a profound understanding of mid-cap stock investment logic and quantitative strategy application, and is adept at dynamically optimizing portfolio structure and strictly controlling investment risks through the combination of multi-factor models and AI technology.
Product Fees: Subscription/Application Fee for Class A Shares (Amount M): M < 1 million yuan, fee rate 0.8%; 1 million yuan ≤ M < 3 million yuan, fee rate 0.6%; 3 million yuan ≤ M < 5 million yuan, fee rate 0.4%; M ≥ 5 million yuan, 1000 yuan per transaction. Class C shares do not charge a subscription/application fee. Redemption Fee for Class A/C Shares (Holding Period T): T < 7 days, fee rate 1.5%; 7 days ≤ T < 30 days, fee rate 1.0%; 30 days ≤ T < 180 days, fee rate 0.5%; T ≥ 180 days, fee rate 0%. This is a floating management fee product. Upon investor redemption, transfer of fund shares, or termination of the fund contract: if holding period < 365 days, management fee is 1.2% per annum; if holding period ≥ 365 days, management fee is 1.5% per annum if the annualized excess return relative to the performance benchmark during the holding period (after deducting excess management fees) exceeds 6% and the holding period return (after deducting excess management fees) is positive; management fee is 0.6% per annum if the annualized excess return during the holding period is -3% or below; in other cases, management fee is 1.2% per annum. Custodian fee is 0.2% per annum. Class C sales service fee is 0.4% per annum (waived for direct sales; waived for periods held over one year through distribution channels). Specific applicable sales fee rates are subject to the fund's legal documents effective at the time as announced by the manager and the business rules of the sales institution.
Risk Disclosure: Funds carry risks, investment requires caution. Investors are advised to fully understand the risk characteristics of this fund, consider the suitability opinions of sales institutions, and invest prudently based on their own risk tolerance after carefully reading disclosure documents such as the Fund Contract and Prospectus. The manager assesses this fund's risk level as R4 - Medium to High Risk, suitable for clients with a risk preference of C4 - Aggressive or above. Specific risk ratings are subject to distribution channels. The fund manager promises to manage and utilize fund assets with honesty, credit, diligence, and responsibility but does not guarantee the fund will be profitable or promise minimum returns. The operational history of funds in China is relatively short and may not reflect all stages of stock and bond market development. The fund's past performance and net asset value do not predict its future performance. The performance of other funds managed by the fund manager does not constitute a guarantee of this fund's performance. After making an investment decision, investors bear the investment risks arising from fund operation status and changes in net asset value. When investing, investors must strictly comply with anti-money laundering regulations and fulfill anti-money laundering obligations. This investment view represents the perspective at the time of writing and may change in the future. It is for reference only and does not constitute substantive investment advice to investors or the final investment view of Great Wall Fund. The company assumes no liability for any investment actions taken based on the views herein. This fund may invest in overseas securities. In addition to general investment risks similar to those of domestic securities investment funds, such as market volatility risk, this fund also faces special investment risks associated with overseas securities market investments, such as exchange rate risk. This product is issued and managed by Great Wall Fund Management Co., Ltd., which operates and assumes legal liability independently. Distribution channels do not assume responsibility for the product's investment performance or redemption. This material is for promotional purposes only and is not a legal document.
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