The First Step to Financial Freedom! Unpacking the 'Low Volatility' Secret Behind Fullgoal Hang Seng HK Dividend ETF (3031.HK)

$Fullgoal HangSeng HK High Dividend ETF (03031.HK)$

In volatile markets, simply chasing 'high yields' often leads to falling into a value trap.Fullgoal Hang Seng Hong Kong Stock Dividend ETF (3031.HK) (hereinafter referred to as "the Fund") uses a unique dual-factor approach of "High Dividend + Low Volatility" to provide investors with a tool designed for long-term stable passive income.

Core Features: Index tracking low volatility, high dividend history, high defensiveness

1. Stable dividend payout from the tracked index: Continuous dividend yield above 6.5% for six years

The Fund tracks the "Hang Seng Hong Kong Stock Connect High Dividend Low Volatility Index", which applies a very rigorous screening logic:

– Net Dividend After Tax Calculation Method: Adopts a "net dividend yield" after deducting withholding tax to ensure that the returns received by investors are highly accurate.

– High Stability: Since 2020, the index dividend yield has consistently remained at above 6.5% , making it an ideal choice for investors seeking cash flow.

*Data source: Hang Seng Indexes Company, as of December 31, 2025

*Note: Historical index returns do not predict future performance, and past dividend situations do not guarantee future distributions, nor do they constitute a guarantee of this fund’s performance or future payouts.

2. Low volatility factor delivers both income and price appreciation: Outperforms the broader market in the medium to long term

A high dividend payout ratio does not necessarily mean good stock price performance. This fund incorporates a 'low volatility' screen, and historical data shows that its tracked index has outperformed traditional indexes:

– Excess returns: Cumulative gains over the past 3/5 years reached 92.75% / 91.12%。

– Comparative advantage: Performance significantly outpaced the Hang Seng Stock Connect High Dividend Index (71.90% / 9.84%) and the Hang Seng Index (49.86% / 22.88%) during the same period, demonstrating the characteristic of 'keeping up in rising markets and holding steady in falling markets'.

*Note: Data sourced from Wind, statistical period from May 8, 2017 to February 27, 2026. The Hang Seng Stock Connect High Dividend Low Volatility Index (HSHYLV) and its Dividend Accumulation Index (HSHYLVDV) were launched on May 8, 2017, with a base date of September 3, 2010. The 5-year returns for the index (Dividend Accumulation Index) are as follows: 2021: 3.39% (11.49%), 2022: -13.84% (-7.23%), 2023: 2.47% (10.14%), 2024: 22.01% (31.26%), 2025: 18.97% (27.27%). Equity price indices only account for the price performance of their constituent stocks; dividends are not included in the index calculation. The Dividend Accumulation Index incorporates both price changes and dividend income. The Net Dividend Accumulation Index (HSHYLVN) is based on the Dividend Accumulation Index, adjusted for dividend-related taxes. Index returns do not predict future performance, and historical dividends do not guarantee future distributions, nor do they constitute a guarantee of this fund's performance or future payouts.

3. Three-step rigorous selection mechanism: Flexible risk avoidance

The tracking index is adjusted every six months, achieving automated hedging through a three-layer filtering process:

1. Liquidity and performance filter: Average daily trading volume over 6 months exceeds HKD 20 million; excludes stocks with declines of more than 50% over the past 12 months and those in the bottom 10% in terms of price performance.

2. Dividend yield screening: Selects the top 75 stocks with the highest net dividend yield from companies that have paid dividends for three consecutive years.

3. Low volatility risk control: Excludes the top 25 most volatile (least stable) stocks over the past year, resulting in a final selection of 50 constituent stocks.

Rigorous screening successfully hedges risks: During the 2022 adjustment, the index precisely removed six real estate stocks from mainland China (with a weight of approximately 11%), showcasing strong sector defense capabilities.

4. Diversified investment: diversified sources of dividends

To prevent single-industry risk, this fund has set a 5% individual stock weight cap, with holdings widely distributed across:

– Core sectors: Industrials, Utilities, and Finance.

– Supporting sectors: Energy, Real Estate, Non-essential Consumption, and Telecommunications, etc. This diversified investment strategy allows for more stable passive income sources, making it less susceptible to the impact of any single industry's economic cycle.

Summary

3031.HK is not just an ETF that tracks a high-dividend index; it functions more like an automated 'risk-hedging income generator.' Through a systematic screening process, it helps eliminate high-risk stocks while locking in high-quality dividend payers.

Risk Warning

Disclaimer:

This document is for informational reference only and does not constitute an offer or solicitation to buy or sell any investment products, nor does it provide any advice or recommendations. The information contained herein does not take into account your specific investment objectives, financial situation, or personal needs, and should not be relied upon as a substitute for professional advice. Before making any investment decisions, you should seek independent professional advice.

Investment involves risks, including the possible loss of principal. Past performance is not indicative of future fund returns. The value of fund units can go up or down, and future returns are not guaranteed. The fund's listed category is traded on the exchange at market price, which may differ from the net asset value. Investors should read the fund’s offering documents, including its prospectus and risk factors, before investing. You can obtain the Hong Kong information of the fund at the following website https://www.fullgoal.com.hk/en (the content of this website has not been reviewed by the SFC).

This material is issued by Fullgoal Asset Management (Hong Kong) Limited and has not been reviewed by the Securities and Futures Commission of Hong Kong. Some information in this document is derived from third-party sources believed to be reliable, but we make no representation or warranty as to its accuracy, completeness, or timeliness.

This document is issued exclusively for persons within jurisdictions authorized to distribute the fund. It may not be reproduced or copied without prior permission. This communication is not directed at U.S. persons, nor should it be acted upon by U.S. persons.

Index Provider Disclaimer

The index is published by Hang Seng Indexes Company Limited, and Fullgoal Asset Management (Hong Kong) Limited is authorized to use and quote the index for relevant ETFs. Hang Seng Indexes Company Limited expressly disclaims any warranty or liability for the accuracy, completeness, merchantability, or fitness for a particular purpose of the index, and shall not bear any legal responsibility for any losses arising from the use of the index or related products. For the full version of the index disclaimer, please refer to the relevant fund prospectus.

$Hang Seng SCHK High Dividend Low Volatility Index (800769.HK)$$HSI (LIST91331.HK)$$OOIL (00316.HK)$$SHOUGANG RES (00639.HK)$$CHINA SHENHUA (01088.HK)$ $VTECH HOLDINGS (00303.HK)$$CHINA MOBILE (00941.HK)$$SSE Composite Index (000001.SH)$$CSI 300 Index (000300.SH)$$Nikkei 225 (.N225.JP)$$USD (USDindex.FX)$$Nasdaq Composite Index (.IXIC.US)$$TENCENT (00700.HK)$

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