Navigating Market Jitters: Strategies for Investors Wary of Highs but Fearful of Missing Out

Looking ahead to 2026, a market consensus is emerging: opportunities exist in both stocks and bonds. The A-share market kicked off the new year with a powerful surge. The Shanghai Composite Index opened higher and climbed above 4,100 points, with trading activity significantly increasing. Hot sectors like brain-computer interfaces, AI applications, and semiconductors blossomed, writing a beautiful opening chapter for the year's market performance. However, divergent views in the market have also amplified as the index climbs higher. The primary anxiety remains the fear of high valuations. After all, moments when the A-share market has breached the 4,000-point level are few and far between in its history. Moving upward, every major integer point becomes a potential checkpoint for adjustment. Incremental capital at this stage is following cautiously, adding positions while simultaneously keeping a watchful eye. Consequently, a growing number of investors suffering from "acrophobia" are deciding to allocate some portion of their portfolio to bonds. After the adjustments in 2025, the bond market has seen substantial pressure release. Furthermore, it offers stable coupon income. When the stock market charges upward, the bond market retreats; when stocks hit a bottleneck, bonds often stand tall. Therefore, many are saying that in 2026, "fixed income-plus" strategies are a category that must be allocated, particularly suitable for investors who are wary of market highs but fear missing out on gains. Taking secondary bond funds as an example, by the end of the third quarter of 2025, the total scale of secondary bond funds in the market exceeded 1.3 trillion yuan, with growth in the third quarter alone surpassing 500 billion yuan, representing a quarterly increase of 61%. Historically, the performance trajectory of the secondary bond fund index has shown relatively smaller fluctuations compared to the stock index. When compared to the CSI Aggregate Bond Index, the secondary bond fund index demonstrates stronger return elasticity during stock market rallies, particularly from 2019-2021 and since 2025, where its performance has been notably impressive.

Data Source: Fund periodic reports, Wind. Index performance data as of November 30, 2025; scale data as of September 30, 2025. The operation history of funds and indices in China is relatively short, and past performance is not indicative of future results. Funds carry risks; investment requires caution. Secondary bond funds are a significant branch of bond funds. They maintain a strict bond foundation while adding elasticity with a lower equity allocation of under 20%. They truly aim to withstand downturns and keep pace with upturns. At this juncture, the Guotai Dingli Bond Fund (Class A 025966, Class C 025967) is preparing for a new issuance. The proposed fund manager for the Guotai Dingli Bond Fund, Cheng Yao, has a background as a macro researcher. She excels at judging the trends of major asset classes through macroeconomic data, combining industry景气度 with target valuations to determine the allocation ratios for assets like bonds, stocks, and convertible bonds, and aims for steady portfolio appreciation through meticulous management to control downside risks. A representative secondary bond fund she manages, Guotai Min'an Zengli, as of the end of November last year, achieved a one-year return of 7.48%, ranking in the top 25% of its peers (273/1122), outperforming both its benchmark (2.01%) and the average return of similar funds (6.20%).

Data Source: Guotai Haitong Securities, Wind, Guotai Fund. Data as of: November 30, 2025. Performance data has been reviewed by the custodian bank. Peer ranking refers to Haitong Securities' Partial Debt Bond type; peer average refers to Wind's secondary classification of Hybrid Bond Type II funds. The fund's performance benchmark is: 90% * ChinaBond Composite Total Price Index Return Rate + 8% * CSI 300 Index Return Rate + 2% * CSI Hong Kong Stock Connect Composite Index (RMB) Return Rate. Fund investment strategies may change with market conditions and do not represent a guaranteed long-term investment direction. The operation history of funds in China is relatively short; past fund performance is not indicative of future results. Another representative "fixed income-plus" product she manages, Guotai Tongli A, achieved a one-year return of 8.29%, ranking in the top 28% of its peers (349/1267), also outperforming its benchmark (6.14%) and the average return of similar funds (6.88%).

Data Source: Guotai Haitong Securities, Wind, Guotai Fund. Data as of: November 30, 2025. Performance data has been reviewed by the custodian bank. Peer ranking refers to Haitong Securities' Partial Debt Hybrid type; peer average refers to Wind's secondary classification of Partial Debt Hybrid funds. The fund's performance benchmark is: 80% * CSI Comprehensive Bond Index Return Rate + 15% * CSI 300 Index Return Rate + 5% * CSI Hong Kong Stock Connect Composite Index (RMB) Return Rate. Fund investment strategies may change with market conditions and do not represent a guaranteed long-term investment direction. The operation history of funds in China is relatively short; past fund performance is not indicative of future results. It can be said that in the realm of "fixed income-plus" investing, Cheng Yao is a seasoned fund manager with a proven track record. Regarding the capital markets in 2026, Cheng Yao believes that the domestic macroeconomy is undergoing structural transformation at the bottom of the cycle. "Looking domestically, the fundamentals are experiencing structural transformation at the cyclical bottom. On one hand, investment and financing remain sluggish, with capacity being cleared out, and pressures persist in the property chain and consumption. On the other hand, the resilience of mid-stream manufacturing production has exceeded expectations, the technology industry has made positive progress, and structural bright spots have emerged in emerging industries. Simultaneously, the 15th Five-Year Plan sets the long-term direction for social and economic development, with fiscal and monetary policies ensuring a mildly宽松 macro liquidity environment, while risk appetite and liquidity maintain an improving trend. Looking overseas, the US Federal Reserve has initiated an easing cycle, and China has shifted from a passive to an active stance in Sino-US relations. This Fed rate-cutting cycle is expected to have room for another 4-5 rate cuts, and quantitative tightening may cease soon. Economic policies in other developed economies like Europe and Japan also lean towards both fiscal and monetary宽松. A period of缓和 has appeared in Sino-US trade frictions, and the policy focus of both China and the US may shift from diplomacy to their respective domestic affairs." Looking ahead to 2026, if both stocks and bonds present opportunities, then a strategy of "bonds as the foundation, stocks for offense" might be an optimal allocation strategy suited to the current market environment. Building a solid收益 foundation by leveraging the stable attributes of bond assets, while seizing the增值 opportunities in the equity market. This approach avoids the limitations of single-asset investment, offers both offensive and defensive capabilities, and allows investors to share in the红利 of a potential slow-bull market, making it a wise choice for asset allocation in 2026. The Guotai Dingli Bond Fund (Class A 025966, Class C 025967) is scheduled to begin its public offering starting January 14th, and is worth keeping an eye on. Note: The historical performance of all funds currently managed by fund manager Cheng Yao and their respective benchmarks are listed below: Guotai Min'an Zengli A (Inception Date 2012/12/26, Fund Benchmark: 90%*ChinaBond Composite Total Price Index Return + 8%*CSI 300 Index Return + 2%*CSI Hong Kong Stock Connect Return, Cheng Yao has managed since 2022/12/30), performance/benchmark for 2020-H1 2025: 4.67%/2.00, 2.29%/0.43%, -8.62%/-1.48%, 0.69%/0.69%, 5.41%/6.22%, 2.50%/0.29%. Guotai Juli Value定开 (Inception Date 2018/03/27, Benchmark: 50%×CSI 300 Index + 50%×ChinaBond Composite Index Return, Cheng Yao has managed since 2021/07/09, Cheng Zhou has managed since 2018/03/27) performance/benchmark for 2020-H1 2025: 12.00%/13.50%, 5.52%/-1.21%, -2.09%/-10.80%, 1.21%/-4.68%, 3.62%/11.73%, 2.84%/0.12%. Guotai Xinli One-Year Hold Mixed A (Inception Date 2020/01/21, Benchmark: 15% CSI 300 + 5% CSI Hong Kong Stock Connect + 80% CSI Comprehensive Bond, Cheng Yao has managed since 2021/07/09), performance/benchmark for 2020-H1 2025: 7.37%/6.14%, 9.44%/2.81%, -1.98%/-1.17%, 1.10%/1.45%, 3.57%/9.81%, 2.70%/1.85%. Guotai Tongli 9-Month Hold Mixed A (Inception Date 2021/02/05, Benchmark: 15% CSI 300 + 5% CSI Hong Kong Stock Connect + 80% CSI Comprehensive Bond, Cheng Yao has managed since 2021/07/09), performance/benchmark for 2021-H1 2025: 8.55%/1.41%, -2.26%/-1.17%, 1.42%/1.45%, 3.12%/9.82%, 3.91%/1.85%. Guotai Heli 6-Month Hold Mixed (Inception Date 2025/03/14) As of June 30, the fund had been established for less than half a year; historical performance is not listed. Data Source: Product periodic reports, Wind, Guotai Fund. Data as of June 30, 2025. Risk提示: Funds carry risks; investment requires caution. The past performance of a fund is not indicative of its future results. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. The operation history of funds in China is relatively short and may not reflect all stages of stock market development. The fund manager pledges to manage and utilize fund assets with principles of honesty,信用, diligence, and responsibility, but does not guarantee that the fund will necessarily be profitable, nor does it guarantee a minimum return. This fund is a bond fund, theoretically expecting returns and risks higher than money market funds, but lower than hybrid funds and stock funds. When this fund invests in Hong Kong Stock Connect target stocks, it will face specific risks arising from differences in the investment environment, investment targets, market systems, and trading rules under the Hong Kong Stock Connect mechanism. Investing involves risks. Before making investment decisions, investors should carefully read the fund's "Prospectus" and "Fund Contract," fully consider their own risk tolerance, and invest cautiously.

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Editor: Guo Xutong