In recent times, the surge of dividend-themed exchange-traded funds (ETFs) has captured significant attention in financial marketsAmong the most notable milestones is the impressive performance of the two largest dividend-oriented ETFs in the market: the Huatai-Pb Dividend ETF and the Huatai-Pb Low Volatility Dividend ETFThese funds have each surpassed notable thresholds, with the former achieving an unprecedented size of over 20 billion RMB and the latter crossing the 10 billion RMB markThe Huatai-Pb Dividend ETF stands out as the first dividend-themed ETF to reach the milestone of 20 billion RMB in total assets.

There has been a marked increase in interest towards dividend assets in recent yearsAs of now, the total size of dividend-themed ETFs has doubled compared to earlier this year, now exceeding 84 billion RMBAnalysts suggest that segments such as non-banking finance, the housing market, and areas benefiting from domestic demand are poised for relative returns

As we approach the end of the year, the investment sentiment towards cyclical sectors is expected to improve, leading to a more balanced market style while maintaining the positioning value of dividend assets.

The records continue to be broken.

Data reveals that on December 6, the Huatai-Pb Dividend ETF, the earliest established and largest of its kind, marked a historic milestone by exceeding 20 billion RMB in size for the first timeNot long after, on December 9, the Huatai-Pb Low Volatility Dividend ETF also announced impressive news, with its size reaching 10.409 billion RMB, making it the second dividend-themed ETF in the entire market to surpass the 10 billion RMB threshold.

This year has been characterized by ongoing market fluctuations, which have made dividend assets increasingly appealing, leading to a corresponding rise in dividend-themed ETFsThe total fund share of these ETFs jumped from 26.124 billion shares at the start of the year to 58.098 billion shares now

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The total fund size has thus experienced a remarkable increase, now surpassing 84 billion RMB.

The two ETFs, Huatai-Pb Dividend ETF and Huatai-Pb Low Volatility Dividend ETF, launched in November 2006 and December 2018 respectively, are acknowledged as the earliest instruments to track the dividend index and the low-volatility dividend indexThis year, both ETFs have seen increases of over 18% and 22%, respectively, outpacing their performance benchmarks and the CSI 300 Index during the same periodTheir share totals have also expanded from 5.681 billion shares and 2.765 billion shares at the beginning of the year to 6.204 billion and 9.307 billion shares, respectively.

Among other dividend-themed ETFs, the Morgan Stanley S&P Hong Kong Stock Connect Low Volatility Dividend ETF and the Harvest CSI 300 Low Volatility Dividend ETF saw their sizes increase by more than 3 billion RMB this year

Furthermore, other new entries including Tianhong CSI Dividend Low Volatility 100 ETF and E Fund CSI Dividend ETF also achieved significant growth, with increases of over 2.5 billion RMB each.

In the insurance sector, there are signs of continued allocation towards these assets.

December has witnessed a resurgence of interest in dividend-themed ETFs, led by Huatai-Pb Low Volatility Dividend ETF and Huatai-Pb Dividend ETF, which have benefitted from substantial inflowsIn the first six trading days of December alone, the net inflow for each ETF reached approximately 2.236 billion RMB and 1.986 billion RMB, making them the top and third stock ETFs in terms of inflows.

On December 6, the Huatai-Pb Low Volatility Dividend ETF achieved a remarkable single-day net inflow of nearly 900 million RMB, marking the highest single-day inflow since its listing in 2018. The Huatai-Pb Dividend ETF also recorded over 600 million RMB in net inflows, setting the second-highest record since its inception in 2006.

Recently, the National Financial Regulatory Administration revealed the insurance capital utilization situation for the third quarter of this year

According to a report from Changjiang Securities, both the financial investment income from insurance funds and the proportion of stock investments have shown a quarter-on-quarter increaseNotably, there has been a growing trend of insurance funds favoring high dividend yields in the second half of the year, with the allocation to these dividend categories rising steadily from 2021 to 2023. This trend also aligns with substantial increases in the over-allocated proportions of social security funds towards high dividend assets.

Huatai-Pb Fund expressed that the recent moves by insurance funds to buy larger stakes indicate a faster pace of entry into the marketAdditionally, the continuous decline in 10-year treasury yields, now entering the "1" era, has created a low-interest-rate environmentUnder these conditions, mid to long-term funds are increasingly likely to allocate towards equity assets to enhance overall investment returns.

As China’s economy enters a phase of high-quality development, sectors experiencing consistent high growth are becoming rarer

The market is displaying characteristics of sector rotationAgainst this backdrop, Huatai-Pb Fund emphasizes that dividend stocks are becoming a relatively certain source of incomeHigh dividend yield assets are increasingly attractive for allocationMoreover, dividend-paying companies tend to exhibit strong operational stability, characterized by consistent performance, stable cash flow, relatively low valuation, and a certain safety margin, making them highly compatible with the allocation demands of long-term investors like insurance funds.

Dividend assets hold intrinsic value for foundational investment.

Recently, the decision-makers have consistently released unexpectedly positive policy signals, sparking heated discussions within the marketAccording to the research department at CICC, such proactive guidance from decision-makers is expected to support a positive year-end and early-year market rally, thereby boosting investor confidence.

Post late September, a series of policy tools have been implemented, which Huatai-Pb Fund claims have led to a noticeable improvement in market risk appetite

The transition from a risk-driven rally to one led by fundamentals is now more apparentAs we approach the end of the year, investment sentiment in cyclical sectors may continue to improve, resulting in a more balanced market styleHence, dividend assets continue to offer foundational investment value.

Research from Cinda Securities suggests that there are emerging signs of new capital starting to pay attention to dividend assetsWith the backing of multiple stimulus policies, cyclical dividend varieties still hold investment value.

Furthermore, the research department at CICC recommends that investors focus on non-banking finance, real estate, and consumer sectorsThese fields are anticipated to yield relative returns in the short term, while mid to long-term focus can shift towards themes such as improving supply-and-demand dynamics and robust growth prospects.

Jianxin Fund suggests three key focus areas: firstly, new infrastructure investments that are more likely to garner market consensus; secondly, structural opportunities, including major infrastructure projects and service-oriented consumption (such as tourist attractions); and thirdly, dividend assets, which, given the current levels of major indices, continue to present allocation value.