China Securities Co., Ltd.: Global Growth Ascending Seize Equity Investment Opportunities

China Securities Co., Ltd. released a research report stating that, in terms of macro factors, the global growth factor is on the rise, the Chinese economic growth factor continues to rise, and domestic financial conditions remain loose. The short-term factor affecting crude oil supply is trending downward. It is predicted that in August 2025, China will be in stage two of the Pring six-cycle phase, and it is recommended to invest in stocks. The latest recommendation for the Chinese bond duration timing portfolio in the third quarter is to focus on short durations for defense, while maintaining a long duration offensive configuration for US bonds. The performance tracking system of A-share listed companies found that the second-quarter reports of the Shanghai and Shenzhen 300 and the CSI 500 indexes had factors that exceeded expectations, higher than the five-year average, with select stocks benefiting from China's internal economic growth. Key points from China Securities Co., Ltd. include: Macro Factor Tracking: Global growth is on the rise Looking back at the performance of the global macro factor system across markets, the global growth factor is on the rise, the Chinese economic growth factor continues to rise, and domestic financial conditions remain loose. The short-term factor affecting crude oil supply is trending downward. Global asset factors have been diverging in the past month, with stocks and emerging market factors showing significant short-term increases, and global risk assets continuing to rebound. Strategic Portfolio Allocation: 1-year return of 3.88%, maximum drawdown within the range of -0.17% For the 7 asset classes in China, including stocks, bonds, and commodities, a risk-parity strategy with stable asset weights over the long term can serve as a strategic portfolio allocation. The strategy has an annual return of 3.92%, a maximum drawdown of -2.37%, a Sharpe ratio of 2.33, and a bilateral annual turnover rate of 37.70%; the rolling 1-year return over the past year was 3.88%, with a maximum drawdown within the range of -0.17%. Tactical Allocation: Maintaining stage two in August 2025 of the Pring Cycle, recommend investing in stocks China Securities Co., Ltd. assesses that China is currently in a state where leading indicators and synchronous indicators are rising while lagging indicators are falling. According to the improved Pring Cycle theory developed by China Securities Co., Ltd., the strategy has seen an annual return of 21.18% since 2016, a Sharpe ratio of 1.83, a maximum drawdown of -6.38%, and positive returns over the past 9 years with the model suggesting to invest in stocks as China's economy is currently in the second stage of the cycle. Bond Market Recommendations: Defensive stance with short durations for Chinese bonds, maintain long durations for US bonds The Chinese bond duration timing portfolio constructed by China Securities Co., Ltd. has an annual return of 6.09%, a maximum drawdown of 1.06%, and a quarterly success rate of 93.62%. The benchmark for the same period has an annual return of 5.0%, a maximum drawdown of 3.38%, and a quarterly success rate of 78.72%. In various Chinese bond maturities, the recommendation for the third quarter is to focus on short duration defense, with a preference for money market assets. The model experienced an absolute return of 13.31% over a sample outside the portfolio (32 months). The US bond duration timing portfolio constructed by China Securities Co., Ltd. has an annual return of 4.91%, a maximum drawdown of 4.58%, and a quarterly success rate of 77.48%. The benchmark for the same period has an annual return of 3.57%, a maximum drawdown of 16.50%, and a quarterly success rate of 61.26%. In various US bond maturities, the recommendation for the third quarter is for 7-10 year treasury bonds. The model experienced an absolute return of 20.12% over a sample outside the portfolio (31 months). Stock Market Segment Recommendations: Seize equity investment opportunities Based on the performance tracking system of A-share listed companies, looking at the second quarter reports, the exceeding values for the Shanghai and Shenzhen 300 indexes, and the CSI 500 indexes were higher than historical averages, while the ChiNext Composite's exceeding value was slightly lower than the historical average for the same period. Overall, in the context of domestic economic recovery, it is recommended to seize equity investment opportunities and select stocks that benefit from China's internal economic growth.