Since March, there has been a net inflow of funds into Hong Kong stocks against the trend. Defensive sectors have become the core of investment allocation.

Since March, as geopolitical risks have heated up, market sentiment has overall weakened, and the Hong Kong stock market has entered a period of adjustment. Investment themes have gradually shifted towards defensive sectors. Against this backdrop, the southbound funds continue to maintain a net inflow status. Analysts believe that recently, the direction of southbound fund allocation has shown obvious defensive characteristics, with high-dividend stocks and counter-cyclical industries receiving a focus on increased holdings. Portfolio structures are also continuously being optimized amidst fluctuations. Against the backdrop of increasing global uncertainty, increasing allocation to defensive assets has become the choice of mainstream funds, with high-dividend stocks, energy, and financial sectors at the bottom of their valuations possessing medium to long-term allocation value.