Futu Research | Moving forward with the waves: seeking investment opportunities in the volatile assets market of China.

In today's volatile Chinese asset market, we have witnessed the increased elasticity of multiple asset varieties. High-yield assets have shown a steady upward trend amid the market's large fluctuations. In such a market environment, although filled with uncertainty, it also provides excellent traders who dare to forge ahead with rich opportunities.

Due to the high level of uncertainty in the market itself, we do not recommend specific directions and targets. We simply provide more choices to facilitate everyone's own decisions at the trading level.

1. Varieties suitable for swing trading

If you believe in your logical and data-driven judgment, and can successfully gain insights into human nature, then pursuing the trend and counter-trend swing trading can be considered as an alternative strategy based on behavioral finance principles.

For example, participating in the fluctuations of Chinese technology stocks listed in Hong Kong and the United States through ETFs like Hang Seng Tech Index ETF (03032) or China Internet ETF (KWEB) not only provides a convenient investment channel, but also effectively diversifies the risk of individual stocks, preventing the risk of stock selection failure. It is obvious that this type of variety offers great flexibility (the chart below compares the elasticity of the Hang Seng Tech Index with the Hang Seng Index, where blue represents the Hang Seng Tech Index, and purple represents the Hang Seng Index).

For investors who prefer high volatility and have a higher risk appetite, triple leveraged FTSE China ETF (YINN) and triple leverage FTSE China ETF (YANG) provide amplified market participation opportunities. However, the volatility is extremely high, so it is important to set up profit taking and stop-loss strategies to avoid getting carried away.

After harvesting profits, these varieties can serve as a 'grain reserve'.

Another strategy is to harvest profits in market highs and then turn to assets that provide stable returns. For example, within Futu, there is a high dividend ETF concept sector with many options. These stocks typically have strong financial stability, demonstrating a strong defensive and anti-fall capability in times of market instability. Historically, they tend to decline and rise more gradually. (The chart below compares the high dividend ETF with the Hang Seng Index, where blue represents the high dividend ETF and purple represents the Hang Seng Index).

In addition, bond assets are also worth considering, especially high-grade corporate bonds and government bonds. These assets usually provide relatively stable returns and value preservation in times of increased economic uncertainty, with the risk lying in continuously rising interest rates. This method not only locks in profits at market peaks but also generates stable cash flow during market fluctuations.

Furthermore, gold in the global market is also a form of allocation, trading gold on the exchange incurs lower fees, such as physical gold ETF (SPDR), Value Gold ETF (03081) we have historical articles introducing:

Moreover, cash management products also provide a low-risk option, typically offering higher returns than regular savings accounts while maintaining fund liquidity.

So in times of highly volatile markets, we need to stay rational amidst the frenzy, identify value in times of panic, in the high-volatility market like Hang Seng, full of dividend-paying stocks, we can continue to seize trading opportunities and also prepare more 'golden egg-laying hen' for ourselves.

$Hang Seng TECH Index (800700.HK)$$Hang Seng Index (800000.HK)$

$High Dividend ETFs (LIST23408.HK)$ $Hang Seng TECH Index ETF (03032.HK)$

$KraneShares CSI China Internet ETF (KWEB.US)$$Direxion Daily FTSE China Bull 3X Shares ETF (YINN.US)$

$Direxion Daily FTSE China Bear 3X Shares ETF (YANG.US)$ $SPDR Gold ETF (GLD.US)$ $Value Gold ETF (03081.HK)$

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