Introduction: To uphold the investor-centric philosophy and strengthen investor education, CITIC Prudential Fund's "UP and Beyond: Investing with Warmth" initiative aims to provide comprehensive wealth management support throughout investors' lifecycles. This is achieved through systematic financial literacy programs, professional investment decision-making guidance, and diverse communication platforms.

Amid declining interest rates and market volatility, many investors grapple with the question of "what and how to invest." At the Tianjin stop of CITIC Prudential Fund's event, attendees sought answers to this pressing dilemma. The session focused on identifying long-term core market drivers and understanding the underlying causes of market fluctuations to help investors establish their own investment rhythm.

Declining interest rates are not coincidental but reflect long-term trends driven by demographic shifts. Ren Pengyu, drawing on developed economies' experiences, highlighted that demographics are a key factor influencing long-term interest rates and asset returns. For instance, Japan's per capita GDP growth from 1967 to 2019 closely correlated with birth rates two decades prior. Similarly, China's real GDP growth is significantly affected by birth rates 20 years earlier.

With falling birth rates and deepening aging, future consumption demand and economic growth dynamics will undergo profound changes. This suggests that the era of rapid appreciation in single-asset classes may be over, shifting attention toward emerging sectors aligned with future trends.

1. Aligning with National Strategy for High-Quality Opportunities Where do future opportunities lie? The answer often lies in national development strategies and sustained capital flows. From supporting breakthroughs in "hard tech" to investing in cutting-edge industries like AI and solid-state batteries, following policy directions can anchor long-term stability in portfolios. Key takeaways include:

- Focus on "greenlight" sectors: Prioritize industries encouraged by national policies, such as AI, solid-state batteries, and advanced manufacturing. - Leverage investment tools: Utilize thematic funds or broad-based indices (e.g., CSI 500, SSE 300) for diversified exposure and reduced stock-specific risks. - Embrace the "slow bull" logic: Trust in long-term market growth and avoid short-term volatility anxiety. Patience is key to reaping national development dividends.

2. Holistic Industry Chain Perspective and Long-Term Thinking The event also explored risks and opportunities in frontier technologies like AI. Key insights include:

- Full industry chain opportunities: AI development requires not only "brains" (algorithms/models) but also "bodies" (hardware, manufacturing, sensors). Opportunities span upstream chips, midstream production, and downstream applications. - Diversify via funds: Individual stock-picking is challenging and risky. Thematic or tech-focused funds offer efficient exposure to industry growth. - Stay long-term, avoid chasing highs: Technological progress takes time, with inevitable volatility. Ren Pengyu cited a carbon-neutral fund as an example, emphasizing that quality sectors may face short-term pressure but hold long-term promise.

Market fluctuations are inevitable, but successful investing relies not on predicting every swing but on a sustainable methodology to navigate volatility. Mastering four core skills—trend alignment, long-term vision, disciplined investing, and understanding new paradigms—can help uncover certainty in uncertainty.

CITIC Prudential Fund's "UP and Beyond: Investing with Warmth" series remains committed to addressing investors' real needs, offering not just one-time knowledge sharing but long-term partnership. Moving forward, the initiative will continue diversified investor education to support steady progress in asset allocation and wealth goals.

Disclaimer: The fund manager does not endorse any mentioned sectors/industries, nor does this constitute investment advice or reflect fund holdings/trading directions.

Risk Warning: This material is for reference only, reflecting current views, not future predictions or investment recommendations. CITIC Prudential Fund assumes no obligation to update outdated information. The content does not constitute financial advice or an offer to buy/sell securities. Past performance is not indicative of future results. Investors should read prospectuses and fund documents carefully before investing.

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