On August 21, 2026, the National Financial Regulatory Administration issued the Measures for the Management of Assets and Liabilities of Insurance Companies along with supporting notices, sparking widespread market discussion about a potential rebalancing of insurance capital allocation. High-dividend assets have once again received a policy tailwind, with market attention on the sector noticeably increasing. The key question now is whether this represents a favorable window for investors to focus on high-yield opportunities.

There are three primary reasons why the new regulation is seen as beneficial for high-dividend assets. The first is the heightened regulatory emphasis on cost-income matching, with the "net investment income coverage ratio" serving as the most direct driver. The new rules establish a quantitative regulatory and monitoring framework for asset-liability management, strengthening requirements for insurers regarding cost-income, liquidity, and term structure alignment, with notably stricter oversight on cost-income matching.

The most impactful change for financial markets is the explicit requirement that life insurance companies maintain a "net investment income coverage ratio" of no less than 100%. According to institutional interpretations, this metric is calculated as "net investment income over the past three years divided by guaranteed costs on liabilities over the same period," meaning the net investment returns generated from insurance funds must cover the guaranteed costs promised to policyholders during that timeframe.

In the current low-interest-rate environment, the net investment income coverage ratio is a core metric where insurers face significant pressure, making increased allocation to high-dividend assets a priority option. Institutional calculations show that the average net investment yield for listed insurers declined by approximately 0.34 percentage points in 2025. If net investment yields were to continue declining by 0.2 percentage points annually, and high-dividend assets were used to fill a 0.1 percentage point yield gap, life insurers would theoretically need to add approximately 1.41 trillion yuan in high-dividend assets.

The second logic shifts from "duration gap" to "interest rate risk hedging," unlocking greater flexibility in asset allocation. One of the most significant revisions is replacing the core regulatory metric for life insurers from "effective duration gap" to "interest rate hedging ratio." Compared to the previous absolute value constraint, this new metric more accurately reflects the ability to withstand interest rate risks while accommodating the inherent adjustment flexibility of participating and universal insurance products. This change not only maintains the bottom line against "interest rate spread losses" but also substantially alleviates short-term compliance pressure on smaller and mid-sized insurers.

From an industry perspective, many smaller life insurers previously struggled to meet the rigid "effective duration gap" requirements, which could trigger irrational behavior such as concentrated buying of ultra-long-term bonds. With the shift to the "interest rate hedging ratio," the mandatory demand for insurers to "fill gaps" by purchasing long-duration bonds has diminished, while the strategic value of diversified allocation tools including high-dividend equities, alternative assets, and interest rate derivatives has increased. The flexibility and stability of insurance capital allocation are both expected to improve.

The third logic centers on accelerating the transition toward participating insurance products, which could reshape equity investment structures. Traditional life insurance products carry rigid liability costs and significant asset-liability matching pressure, whereas participating products offer lower guaranteed rates and dynamically adjustable dividend levels, making interest rate risks more manageable. Under the guidance of the new rules, the industry is expected to accelerate its shift toward floating-return products like participating insurance. The "guaranteed base plus floating returns" characteristic of participating accounts requires managers to seek excess returns above a stable fixed-income foundation, with improving dividend realization rates potentially becoming a core focus for insurers.

Some analysts suggest that as the share of participating products rises, insurance equity investments may form a two-tier structure of "OCI high-dividend as a foundation plus TPL growth as enhancement," positioning high-dividend assets as a core direction for equity allocation.

With yield spreads at historical highs, the allocation value of high-yield assets is significant. Wind data shows that as of August 25, 2026, China's 10-year government bond yield stood at 1.68%, with long-end rates having retreated to historical lows. During the same period, the latest dividend yields for the Stock Connect High Dividend (HKD) Index and the High Dividend Strategy Index were 5.47% and 4.40% respectively, with spreads over the 10-year government bond yield widening to 3.79 and 2.72 percentage points. The relative value of high-dividend assets has therefore attracted market attention.

Some institutions believe the A-share market may currently be in a phase of oscillating rebalancing. On one hand, institutional chips in previously strong sectors have not been fully digested, constraining further expansion of mainline sectors. On the other hand, improving fundamentals are spreading to more industries, providing support for structural opportunities. In this context, chasing crowded trades may not be advisable, with focus instead on segments possessing "allocation advantages." By this standard, the dividend style remains suitable as a portfolio foundation. Other institutions note that the dividend style benefits from allocation shifts by absolute-return funds, with dividend assets featuring high yields, low volatility, and stable cash flows potentially remaining the core destination for such capital.

Against the backdrop of rising attention to dividend strategies, investors can consider products such as the High Dividend ETF Yinhua (563180) and its feeder fund (Class A: 022144; Class C: 022145), as well as the Hong Kong High Dividend ETF Yinhua (159302), based on their own investment objectives and risk tolerance. These products respectively cover leading companies with relatively high payout ratios and good liquidity in the A-share and Hong Kong stock markets, serving as reference tools for dividend-focused strategies.

Risk disclosure: The High Dividend ETF Yinhua fee structure includes subscription/redemption fees where agents may charge commissions up to 0.50%, a management fee of 0.50% per annum, a custody fee of 0.10% per annum, and total annual operating expenses of 0.66%. Fee details are available in the fund product information summary as of April 17, 2026; please refer to the latest fund announcements and legal documents. The Yinhua CSI High Dividend Strategy ETF Feeder Fund fee structure includes Class A subscription fees of 1.20% for amounts under 1 million yuan, 0.90% for amounts between 1 million and 2 million yuan, 0.60% for amounts between 2 million and 5 million yuan, and a flat 1,000 yuan per transaction for amounts of 5 million yuan or above. Class A redemption fees are 1.50% for holding periods under 7 days, 0.50% for 7 to 30 days, and 0% for 30 days or more. Class C redemption fees are 1.50% for holding periods under 7 days and 0% thereafter. The management fee is 0.50% per annum, custody fee is 0.10% per annum, and Class C sales service fee is 0.25% per annum. Fee details are available as of December 8, 2025; please refer to the latest fund announcements and legal documents. The Hong Kong High Dividend ETF Yinhua fee structure includes subscription/redemption fees where agents may charge commissions up to 0.50%, a management fee of 0.15% per annum, a custody fee of 0.05% per annum, and total annual operating expenses of 0.48%. Fee details are available as of August 3, 2026; please refer to the latest fund announcements and legal documents.

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