On December 11, the three major Hong Kong stock indices dipped into negative territory, while the HUABAO Hong Kong Stock Connect Hang Seng China (Hong Kong Listed) 30 ETF (520560), which employs a "tech + dividends" barbell strategy, bucked the trend and rose, demonstrating resilience. Among its constituents, Yum China led gains with over 1%, while Meituan, China Merchants Bank, Ping An Insurance, Xiaomi Group, Pop Mart, and BeiGene also advanced.
Data shows that the HUABAO HK 30 ETF (520560) has seen continuous inflows over the past five days, totaling RMB 38.86 million. Over a longer horizon, the fund attracted RMB 75.18 million in the last 20 days, reflecting investor optimism toward Hong Kong stocks and active adoption of the barbell strategy for allocation.
On the macro front, the Fed cut interest rates by 25 basis points as expected. China Galaxy Securities noted that the Fed's dovish move is expected to weaken the USD, pushing down HKD interest rates and encouraging foreign capital inflows—both factors likely to improve Hong Kong market liquidity and drive overall gains.
In tech news, Alibaba’s Tongyi Qianwen announced an upgrade to its Qwen3-TTS speech synthesis model on December 10, now supporting multiple tones, languages, and dialects. Additionally, reports suggest Meta has leveraged Alibaba’s AI model to optimize its latest AI system, underscoring the open-source model’s robust capabilities.
CMSC Securities emphasized that AI remains a long-term growth theme, with productivity enhancements and expanding applications signaling untapped potential. Short-term market volatility does not diminish the sector’s investment value, and firms already monetizing AI investments may emerge as attractive picks post-adjustment.
On the dividends front, six major state-owned banks disclosed mid-2025 interim payout dates, with total distributions reaching RMB 204.657 billion. Analysts highlighted that 2025 interim dividends are characterized by "higher frequency, faster execution, and stable yields."
Guosen Securities pointed out that state-owned banks’ interim payouts are ahead of last year’s schedule, potentially accelerating dividend-driven rallies. China Galaxy Securities added that more banks are maintaining or raising payout ratios, with earlier distributions reinforcing the sector’s appeal to long-term capital.
CITIC Securities noted Hong Kong stocks’ deep undervaluation relative to global peers, predicting a second wave of re-rating in 2026 amid policy tailwinds and external dynamics. GF Securities recommended a barbell strategy, pairing stable-value assets with growth-oriented tech plays for balanced exposure.
For investors bullish on Hong Kong tech but seeking lower volatility, the HUABAO HK 30 ETF (520560) and its feeder funds [Feeder A (LOF) 501301; Feeder C 006355] offer a diversified barbell approach. The ETF tracks 30 Hong Kong-listed blue-chips, blending high-beta names like Alibaba and Tencent with steady dividend payers like China Construction Bank and Ping An Insurance, while enabling flexible "T+0" trading.
Risk Disclosure: The HUABAO HK 30 ETF passively tracks the Hang Seng China (Hong Kong Listed) 30 Index (base date: January 3, 2000; launch date: January 20, 2003), with constituents adjusted per index rules. Constituent data is illustrative and not investment advice or indicative of fund holdings. The fund is rated R4 (higher risk) and suitable for aggressive (C4+) investors. Past performance does not guarantee future results; investing involves risks.
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