Funding risk appetite declines; multiple dividend ETFs increase in size by over 1 billion yuan

证券日报记者 Wang Xiaoqian

Amid broad market fluctuations, capital is accelerating into defensive assets.

Recently, driven by an escalation of the situation in the Middle East, overall market volatility has increased notably. Risk appetite has continued to fall, while demand for both hedging and steady allocation has risen in parallel. Against this backdrop, dividend-focused ETFs with stable distribution characteristics have gained favor with capital.

Hedging sentiment heats up

Dividend ETFs are in demand

Over the past month, rising geopolitical uncertainty has led to an unstable market trend. As risk appetite receded, demand for capital’s hedging and steady allocation increased clearly. Under this context, besides ETF products with lower-risk attributes such as bonds, dividend ETFs featuring stable distribution characteristics have also drawn attention.

Data show that multiple products linked to dividend indices such as the CSI Dividend Low Volatility Index, the CSI Dividend Index, the CSI Dividend Low Volatility 100 Index, and the CSI 300 Dividend Low Volatility Index, among others. In the past month, their scale growth has all exceeded 1 billion yuan, with capital inflow characteristics becoming fairly evident. For example, the Boshi Dividend Low Vol 100 ETF, the E Fund Dividend Low Vol ETF, the Jimu Dividend Low Vol ETF (300 Dividend Low Vol ETF), and the Huatai-PineBridge Dividend Low Vol ETF, among others, all saw scale growth of more than 1 billion yuan over the past month.

As the dividend investment philosophy continues to heat up and related product frameworks keep expanding, market attention toward dividend ETFs is increasing. Currently, there are 5 dividend ETFs whose scale has exceeded 10 billion yuan, making them an important direction for allocation of steady capital.

Faced with high volatility

Dividend strategy: “Win by defending”

Since March, amid the continued impact of geopolitical tensions, market conditions have been choppy and volatility has intensified. Last week, during intraday trading, the Shanghai Composite Index even briefly broke below 3800 points, and several sectors performed poorly.

E Fund stated that in a high-volatility market environment, defense has become one of the directions that investors are focusing on most right now. Value-style indices such as dividend and dividend low vol have also returned as points of attraction for fund flows.

Wan Qiong from Boshi Fund noted that fundamentally, a dividend strategy is an investment philosophy of “win by defending.” The reason it has attracted attention mainly lies in its inherent characteristics of being able to pass through cycles. In a context of market turbulence or fast rotation, dividend assets—being low-volatility underlying exposures—help smooth volatility in investment portfolios.

Wan Qiong believes that high dividend yields, strong cash flow, and continued distributions often directly reflect a company’s better operating quality and profitability capability. Dividend reinvestment mechanisms may have a significant impact in long-term investing. Dividend strategy stock-selection standards naturally screen out a batch of companies with stable business models.

China Merchants Fund also said that dividend ETFs focus on listed companies with high dividend yields and relatively stable earnings, such as companies in sectors including banking and utilities. On the one hand, constituents distribute dividends on a regular basis, providing ongoing cash returns and avoiding reliance on stock-price-variation gains; on the other hand, by diversifying individual-stock risks, they tend to perform more resiliently when the market declines.

Dividend strategy allocation

Specific cases require specific analysis

Before allocating to dividend strategy products, investors first need to clarify their own investment preferences, risk tolerance, and the nature of their capital, among other factors.

Wan Qiong said that in terms of specific strategy, investors may consider adopting a “core + satellite” approach, using dividend assets as the core base holding; or using a “dumbbell” allocation—one hand in growth and one hand in high dividend yields—adjusting the weights according to risk appetite. If an investor’s risk appetite is low, they may place greater emphasis on dividend low-volatility products; if they can tolerate volatility somewhat more, they may also consider a single dividend factor product. Of course, the overall allocation plan needs to be tailored to one’s actual situation, with no uniform standard.

In dealing with volatility, dividend strategies mainly play the roles of cash-flow buffering, low-volatility defense, and a positive compounding loop. This helps investors avoid exiting at low levels due to panic. Historical data show that the drawdown magnitude of dividend strategy assets is typically smaller than that of broad-market indices. This can help to some extent in alleviating investors’ psychological pressure. And dividend reinvestment can accumulate shares at lower levels, guiding investors to focus on long-term compounding, which helps overcome investors’ tendency to chase rallies and sell at lows.

China Merchants Fund also reminded investors that they should note that in the short term, dividend products’ sensitivity to the growth-stock rally may be relatively low. Before buying, investors can refer to historical dividend yields to avoid valuation-too-high ranges. If investors choose targets with a fixed dividend distribution period first, it is easier to hold them long term and benefit from compounding.

MACD golden cross signal forms—these stocks are showing strong momentum!

Big volumes of information and precise analysis—right here in the Sina Finance app

责任编辑：石秀珍 SF183