From "tool combinations" to "evolutionary systems": insight into the global configuration of "ways" and "skills" selected by the South.

In the grand narrative of global asset allocation, investors often face unprecedented information cocoons and decision-making fog. As one of the earliest QDII products in the domestic public fund field, Southern Global Selection (QDII-FOF, hereinafter referred to as "Southern Global Selection", code: 202801) has always been committed to reducing volatility while achieving long-term asset appreciation through global asset allocation and portfolio management. However, from the surge of gold departing from the "gravity" of real interest rates, to the instability of stock and bond negative correlation, traditional investment intuition is facing unprecedented pressure of failure. In a complex macro paradigm, traditional investment frameworks are facing severe challenges. By the end of 2024, with the assumption of the deeply academic fund manager Yun Lei, the product showed an extremely forward-looking evolutionary posture. In the latest quarterly report, Yun Lei analyzed in detail his iterative investment methodology in over nine thousand words, elevating asset allocation from a simple "tool combination" to a sophisticated and self-evolving financial engineering system. This extremely transparent information disclosure, rare in the industry, not only reveals how Southern Global Selection grasps and innovates on the "" of underlying assets and the "" of allocation models. Compounding under low volatility: The ultimate pursuit of "risk-return ratio" In terms of market performance, according to regular reports, in the third quarter of 2025, the net asset value growth rate of Southern Global Selection's A shares was 4.36%, while C shares were 4.23%, demonstrating a robust capture of returns in the Risk on phase of global stock markets; entering the fourth quarter, in an environment of mixed long and short positions in global markets and declining macro certainty, the product still maintained positive value growth, with A shares and C shares achieving growth of 1.65% and 1.50% respectively. Although at some stages the absolute values may be slightly lower than benchmarks that have risen significantly in the same period, the standard deviation of its net asset value growth has remained at a low level over the past year, embodying the ultimate pursuit of the "risk-return ratio". Behind this stable performance is the fund manager's profound understanding of the stability of the liability side. According to Yun Lei in the quarterly report, clients of mutual funds are often not afraid of long-term holding, but feel anxious about significant short-term drawdowns. Therefore, in order to control the volatility and drawdown of the portfolio, even at the expense of some excess returns, it is to bring about a better holding experience. By the end of 2025, the total shareholding of the product had exceeded 1.85 billion shares, with the scale of A shares steadily expanding, reflecting investors' deep recognition of the philosophy of this product which is based on financial engineering and pursues high Sharpe ratio returns. For the managers, the stability of performance is not just about numerical growth, but also about incorporating high-quality beta from the global market into the portfolio through established rules such as maximizing returns or minimizing volatility, achieving the underlying requirement of "surviving" in an infinite game and continuously evolving. Penetrating the misperception of allocation: Returning from asset "beauty contest" to the long-term value of "income-generating assets" It is understood that the product logic of Southern Global Selection, which is characterized by strengthening, begins with a deep penetration into the long-standing pain points of the industry. Currently, research on asset allocation in the market often falls into the misconception of "asset beauty contest," that is, being overly concerned with which asset, whether US stocks, A shares, or Hong Kong stocks, has better performance in a given year. This logic essentially leads to unsustainable asset rotation rather than true allocation. Another common pain point is the "chain-like" pseudo-diversification, where investors believe that holding different ETFs such as the ChiNext, semiconductor, and artificial intelligence sectors reduces risk, when in fact these assets are highly correlated under liquidity pressure and do not provide effective hedging. In response to these pain points, Southern Global Selection has proposed a solution based on asset quality as the "" and a configuration framework as the "," rigorously classifying underlying assets into "income-generating assets" and "non-income-generating assets." In Yun Lei's perspective, income-generating assets such as interest-bearing bonds, high-quality stocks that continuously generate cash flow, serve as the foundation for a portfolio with the genes of "long bull and slow bull," and their returns often accumulate in low volatility environments. On the other hand, non-income-generating assets such as gold or non-profit technology startups, depend more on marginal information catalysts and liquidity fluctuations, offering explosive potential but requiring strong timing ability. Southern Global Selection, through this profound asset characterization, compares portfolio construction to "house construction design," emphasizing that there is no need to mythologize any specific allocation model, whether it be traditional stock and bond balance or all-weather strategies. The essence of these strategies is to construct asset modules that allow for a "peaceful living" experience in different macro environments. This philosophy allows the product to break out of the model's constraints in the high inflation and interest rate hike cycle post-2022, prospectively studying the underlying causes of asset correlation and identifying investment opportunities brought about by macro paradigm shifts such as gold departing from interest rate "gravity". Strengthening the system from a global perspective: From Smart Beta enhancement to deep risk defense Analysis of the product's regular reports reveals the core investment advantages of Southern Global Selection, which are manifested in the four key strategic iterations completed in the past year. Firstly, the product has transitioned from a "simple broad base" to "Smart Beta" tools, using technology sector funds, manufacturing sector funds, and style funds as substitutes for traditional indices such as the Nasdaq 100 or S&P 500. This change stems from a deep insight into the reward mechanisms of global markets: the US markets reward growth, European and Canadian markets reward value, and the Hong Kong market is more sensitive to momentum. Through this targeted style replacement, Southern Global Selection is able to explore higher Sharpe ratio "quality beta" globally, significantly improving the risk-return characteristics of the portfolio. Secondly, the product effectively hedges the volatility risk of income-generating assets during the holding period by introducing low volatility strategy ETFs from global, Canadian, and Japanese markets, without sacrificing yield as much as possible. Additionally, by cleverly utilizing tools such as Bridgewater's ALLW ETF, the product significantly increases the effective weighted positions of low volatility assets -- bonds -- achieving the utmost efficiency in position utilization. Furthermore, the fund manager suggests constructing a triple risk defense system: ambush VIX products in extremely low volatility, use covered call tools in volatile markets, and introduce low volatility funds with low correlations as a buffer in advance, forming a complete safeguard mechanism to respond to black swan events in advance and during the event. It is worth noting that behind Southern Global Selection is a strong team support and empowerment. As one of the earliest mutual fund institutions in China to systematically layout overseas investments, Southern Fund has built an international research team that is at the forefront of the industry in terms of scale and coverage. Currently, the number of the Southern Fund's overseas research team has reached 30 people, making it one of the largest international research teams amongst domestic mutual fund institutions, covering research areas such as US stocks, US bonds, Europe, Asia-Pacific, A shares, Hong Kong stocks, commodities, quant, and alternative assets. In terms of research mode, the team covers both active research and passive tools: on one hand, it continues to conduct bottom-up fundamental research and macro asset allocation analysis; on the other hand, it also transforms proven strategies and factors from mature markets into usable allocation tools through indexation and tooling. This "active + passive" parallel structure allows asset allocation to no longer rely on single-point judgments, but to be combined and validated through multiple tools. Taking a long-term view of the asset management industry, the evolution of Southern Global Selection is essentially a deep return of professionalism to common sense. Through its long-term adherence to income-generating assets and dynamic optimization of risk budget models, Southern Global Selection is paving a scientific path towards global quality beta and long-term stable asset appreciation.