Must-See "Dividend+" Guide for Beginners, Market Volatility Investment Secrets Revealed

Recently, the A-shares market has entered a “volatility mode” again, with the Shanghai Composite Index bouncing around 4,000 points. Hot sectors like semiconductors, new energy, and oil and petrochemicals are rotating rapidly, like opening blind boxes. Don’t panic—today I’ll recommend a “calm pill” for a choppy market—the “Dividend+” Index, which even beginners can easily grasp.

Many newcomers hear “Dividend+” and think it’s a complex professional term. Actually, the core is simple: it helps us pick stable, long-term profitable companies that don’t mess around, so you don’t have to spend time choosing stocks—safe and worry-free.

For example, the CSI Dividend Index is known as the “High Dividend Crew,” selecting the top 100 companies with the highest dividends over the past three years. These companies are usually industry leaders with mature businesses and stable operations.

If you prefer stability and are worried about market volatility, the Dividend Low Volatility Index is more suitable. It emphasizes high dividends combined with low volatility, offering strong defensive qualities.

The CSI Free Cash Flow Index focuses on “cash cows” that are not short of money. These companies have enough cash to pay dividends and expand or develop, providing more growth flexibility compared to pure dividend indices.

The CSI Value 100 is an “all-round player,” scoring stocks based on three aspects: attractive valuation, high dividends, and ample free cash flow. It offers both a safety net with high dividends and growth potential, balancing stability and aggressiveness.

Some may ask, what’s the main difference among these four indices? It mainly comes down to three factors: industry, valuation, and historical performance.

The CSI Dividend Index favors industries like banking and coal, which can provide stable dividends in the financial cycle. The Dividend Low Volatility Index has nearly half its holdings in banks, earning it the nickname “Small Bank” Index. The CSI Free Cash Flow Index targets industries with abundant cash flow, such as automotive and oil & petrochemicals. The CSI Value 100 is more diversified, with nearly 50% in heavy-asset industries like home appliances, banking, and automotive.

In terms of valuation, the CSI Value 100 offers good value, with a dividend yield of 4.9% and a P/E ratio of only 11.4 times—cheap and dividend-paying. The CSI Dividend and Dividend Low Volatility indices have dividend yields of 4.6% and 4.5%, respectively, with P/E ratios just over 8 times. The CSI Free Cash Flow index has a slightly lower dividend yield of 3.1% because it retains some cash for expansion, but it outperforms the broader market and has growth potential, with a P/E ratio of about 15.7 times.

Regarding historical performance, from 2013 to now: the CSI Dividend and Dividend Low Volatility indices focus on stable, mature companies with steady dividends, resulting in slightly lower annual returns—around 12%. Meanwhile, the CSI Free Cash Flow and CSI Value 100, which consider both growth and dividends, have annualized returns exceeding 18%, making long-term holding very rewarding.

How to invest? E Fund offers four index-linked funds corresponding to these indices: CSI Dividend ETF-Linked Fund (A/C/Y: 009051/009052/022925), CSI Dividend Low Volatility ETF-Linked Fund (A/C: 020602/020603), CSI Free Cash Flow ETF-Linked Fund (A/C: 024566/024567), and CSI Value 100 ETF-Linked Fund (A/C: 025497/025498).

If you have a stock account, you can also directly buy the corresponding ETFs: E Fund Dividend ETF (515180), E Fund Dividend Low Volatility ETF (563020), E Fund Free Cash Flow ETF (159222), and E Fund Value ETF (159263). It’s very convenient to operate.

Source: ETF Fireline

Risk Reminder: Funds are subject to risks; please invest cautiously.