The Chinese A-share market in 2026 is witnessing a pronounced see-saw effect between technology growth stocks and defensive dividend-paying assets. During the first half of the year, themes like semiconductor chips and AI computing power posted significant gains, with some individual stocks doubling in price, igniting market sentiment. However, entering July, volatility in the technology sector has increased markedly, with early winners facing profit-taking pressure. Concurrently, previously quiet dividend-style assets are quietly strengthening, with some capital flowing back into high-dividend sectors.

Understanding Dividend Assets: The "Ballast Stone" of High Yields, Mature Operations, and Strong Cash Flow

Dividend assets refer to stocks of listed companies that have maintained a high cash dividend payout ratio for a long period, with dividend yields significantly above the market average. Their core characteristics can be summarized as "high dividend yield, mature operations, and strong cash flow." A high dividend yield implies stable profitability and a willingness to distribute profits. Mature operations indicate a stable business fundamentals. Strong cash flow signals healthy finances and a company's ability to withstand economic cycles, thereby supporting sustained dividends. The combination of these three factors makes dividend assets naturally suited to act as a "ballast stone" in asset allocation.

Dividend assets are often concentrated in sectors such as banking, transportation, utilities, energy (electricity, oil, coal), and consumer staples. These industries typically have mature business models, more abundant cash flow, and benefit from state or policy support, enhancing their resilience. They also include many state-owned enterprises (SOEs), which often have a higher willingness and ratio for dividend payouts.

Looking at the current juncture, the value of allocating to dividend assets is supported by three pillars. First, the technology sector has seen significant gains and rising trading congestion. In the first half of 2026, several tech growth indices surged over 50% or even 100%. For example, the CSI Semiconductor Materials and Equipment Index (931743) rose 155% in six months, and the Sci-Tech Chip Index (000685) gained over 110%, pushing the sector into valuation correction territory. Data source: Wind, as of July 22, 2026.

Second, the correlation between dividend assets and tech stocks is low. Looking at data over the past five years, while tech sector volatility has increased, the CSI Dividend Index has shown a relatively independent and stable trend, with a negative correlation emerging periodically. The advantage in the equity-bond yield spread is significant. As of July 22, the 10-year government bond yield was around 1.74%, a historical low. In contrast, the CSI Smart High Dividend Strategy Index had a 12-month dividend yield of 5.49%, and the CSI Dividend Index yield was 4.37%, creating a spread of over 260 to 375 basis points. Amid declining risk-free rates, the high dividend attribute of dividend assets is attracting capital seeking some degree of certainty. Compared to bonds, high-dividend stocks offer substantial dividends while retaining the potential for capital appreciation from earnings growth, making them attractive to risk-conscious investors seeking potentially higher returns.

Third, structural dividends are being released. The new "National Nine Points" policy has strengthened dividend payout constraints for listed companies. Since 2024, over 800 companies have implemented interim dividends for the first time, with the frequency and scale of dividends reaching record highs, providing solid underlying support for the long-term performance of dividend assets.

The Barbell Strategy: An Offensive-Defensive Framework for Asset Allocation

Having understood the value of dividend assets, the next question is: How to incorporate them into a portfolio? The barbell strategy provides a framework that balances offense and defense. The core logic of the barbell strategy is to allocate both high-beta assets and low-volatility assets at the two ends of the investment portfolio, creating a structure that is "ready to attack and defend." One end holds growth assets like tech stocks to capture excess returns from industrial trends; the other end holds defensive assets like high-dividend stocks to reduce volatility and provide relatively stable dividend income. "Balanced" assets in the middle can be allocated moderately, but the essence of the barbell lies in the distinct roles of the two ends.

Historical data supports the effectiveness of this strategy. Constructing a simple barbell portfolio (50% weight each) using the "CSI Dividend Index + Sci-Tech 50 Index" and backtesting from July 2020 to July 2026 reveals a clear pattern. During tech bull markets (e.g., 2020-2021), the Sci-Tech 50 contributed the portfolio's main excess returns, with the barbell portfolio's gains between the two indices. During tech corrections (e.g., 2022, Q4 2024), the dividend index provided positive returns, reducing the portfolio's overall volatility. Overall, over the statistical period, the barbell portfolio had an annualized volatility of 16.02% and a maximum drawdown of -28.97%, significantly better than the Sci-Tech 50's 30.15% and -62.66%. The barbell portfolio's total return was 28.75%, not far from the Sci-Tech 50's final return of 29.44%. Data source: Wind, time period: 2020.7.2-2026.7.22. The barbell portfolio is an equal-weight combination of the CSI Dividend Index (50%) and the Sci-Tech 50 Index (50%).

The barbell strategy trades a small amount of offensive upside for an improved risk-return profile. Incorporating dividend assets into the portfolio helps improve the Sharpe ratio and reduce risk metrics like maximum drawdown. For investors with moderate risk tolerance seeking to reduce portfolio volatility, the barbell strategy offers a solution that balances returns and holding experience. It is crucial to emphasize that the core of the barbell strategy is maintaining "simultaneous presence" of both ends, avoiding overexposure to any single style. Weights can be dynamically adjusted based on market conditions and personal risk preferences: when tech valuations are high and volatility is rising, the dividend end can be increased for defense; when tech has undergone sufficient correction and valuations look attractive, the weighting can tilt towards the offensive end. The key is to always maintain both offensive and defensive positions simultaneously, ensuring the portfolio has a response strategy for various market environments.

GF "Dividend E-Family": A Multi-Dimensional A+H Share Allocation Toolkit

Building the defensive end of a barbell portfolio requires a variety of rich dividend tools. GF Fund Management has formed a "Dividend E-Family" ETF matrix covering A-shares, Hong Kong stocks, and free cash flow, offering differentiated tools for investors with different preferences. High Dividend ETF GF (159207) tracks the CSI Smart High Dividend Strategy Index (932305), using "expected dividend yield." It is a smart high dividend selection, with a 12-month dividend yield of 5.49% as of July 22, leading among dividend-style indices in the market. Its constituent stocks cover 15 Shenwan primary industries including healthcare, transportation, and consumer staples, with high diversification to avoid sector-specific volatility. Off-exchange investors can also consider its linked product, GF CSI Smart Strategy ETF Linked A/C (025682/025683).

Dividend ETF GF (159589) tracks the CSI Dividend Index (000922), covering 100 high-quality A-share companies with high cash dividend rates and stable payouts, with a more balanced industry distribution. Its volatility this year is only 1.02%, making it a typical tool for the "low volatility" end of the barbell strategy, suitable for investors sensitive to drawdowns seeking stable cash flow, offering a one-click allocation to high-dividend A-share stocks. Off-exchange investors can also consider its linked product, GF CSI Dividend ETF Linked A/C (021399/021400).

Hong Kong Stock Connect Dividend ETF GF (520900) tracks the CSI Guoxin HK Stock Connect SOE Dividend Index (931233), focusing on Hong Kong-listed high-dividend state-owned enterprises, covering "ballast" industries like energy, telecom services, and utilities. Off-exchange investors can also consider its linked product, GF CSI Guoxin HK Stock Connect SOE Dividend ETF Linked A/C (022719/022720).

SOE Dividend ETF GF (560700) tracks the CSI SOE Shareholder Return Index (932039), focusing on high-quality A-share central and local SOEs, covering industries like transportation, building materials, and utilities. The top ten holdings account for approximately 36.86% in total (Data source: Wind, as of July 23, 2026), with individual stock weights being relatively diversified, suitable for investors favoring the "China Special Valuation System" logic. Off-exchange investors can also consider its linked product, GF CSI Guoxin SOE Shareholder Return ETF Linked A/C (019428/019429).

Free Cash Flow ETF GF (159229) tracks the 800 Cash Flow Index (932368), selecting "cash cow" companies with strong "cash-generating ability" and sound finances from the CSI 800, combining dividend attributes with growth potential. The underlying index, 800 Cash Flow, has a historical annualized return of 13.27% since its base date (Data source: Wind, as of July 23, 2026), suitable for investors seeking to retain some offensive potential within a defensive framework. Off-exchange investors can also consider its linked product, GF CSI 800 Free Cash Flow ETF Linked A/C (025680/025681).

Currently, except for the SOE Dividend ETF GF, the other four products have reduced fees, with a management fee of 0.15% and a custodian fee of 0.05%, resulting in a total expense ratio as low as 0.2%, the lowest tier in the market. For conservative investors, placing a single bet on one style can put immense pressure on a portfolio in a volatile environment. Tech growth represents the direction of economic transformation, while dividend defense provides certainty through cycles. The two complement each other in a portfolio, jointly forming an offensive and defensive structure. Using the barbell strategy as a framework and GF's Dividend E-Family as tools, finding your own balance between offense and defense might be a worthwhile allocation approach for investors seeking stability.

Data source: Wind, as of July 22, 2026. Industry classification is based on Shenwan primary industry classification. The above data are point-in-time data. The index compiler may subsequently adjust the index compilation methodology and constituent stocks, and the composition and weight of constituent stocks will change accordingly. Investors should be aware of the risks associated with such adjustments. Funds involve risks; invest with caution.

Sales fees for High Dividend ETF GF: when investors subscribe for or redeem fund shares, the subscription and redemption agent broker may charge a commission at a standard rate not exceeding 0.50%, and the transaction fee for on-exchange trading shall be determined by the actual charges of the securities company. For its linked A-class shares, the subscription fee rate is: 1.20% for amounts less than 1 million yuan, 0.80% for amounts from 1 million yuan (inclusive) to 3 million yuan, 0.50% for amounts from 3 million yuan (inclusive) to 5 million yuan, and a fixed 1,000 yuan per order for amounts of 5 million yuan and above. The redemption fee for A-class shares is: 1.50% for holding periods less than 7 days, and 0% for holding periods of 7 days or more. C-class shares do not charge a subscription fee; their redemption fee is: 1.50% for holding periods less than 7 days, and 0% for holding periods of 7 days or more. Additionally, C-class shares are charged an annual sales service fee of 0.30%. For details, please refer to the fund's prospectus, fund contract, and other legal documents.

Sales fees for Hong Kong Stock Connect Dividend ETF GF: when investors subscribe for or redeem fund shares, the subscription and redemption agent broker may charge a commission at a standard rate not exceeding 0.50%, and the transaction fee for on-exchange trading shall be determined by the actual charges of the securities company. For its linked A-class shares, the subscription fee rate is: 1.20% for amounts less than 1 million yuan, 0.80% for amounts from 1 million yuan (inclusive) to 3 million yuan, 0.50% for amounts from 3 million yuan (inclusive) to 5 million yuan, and a fixed 1,000 yuan per order for amounts of 5 million yuan and above. The redemption fee for A-class shares is: 1.50% for holding periods less than 7 days, and 0% for holding periods of 7 days or more. C-class shares do not charge a subscription fee; their redemption fee is: 1.50% for holding periods less than 7 days, and 0% for holding periods of 7 days or more. Additionally, C-class shares are charged an annual sales service fee of 0.20%. For details, please refer to the fund's prospectus, fund contract, and other legal documents.

Sales fees for SOE Dividend ETF GF: when investors subscribe for or redeem fund shares, the subscription and redemption agent broker may charge a commission at a standard rate not exceeding 0.50%, and the transaction fee for on-exchange trading shall be determined by the actual charges of the securities company. For its linked A-class shares, the subscription fee rate is: 1.20% for amounts less than 1 million yuan, 0.80% for amounts from 1 million yuan (inclusive) to 5 million yuan, and a fixed 1,000 yuan per order for amounts of 5 million yuan and above. The redemption fee for A-class shares is: 1.50% for holding periods less than 7 days, and 0% for holding periods of 7 days or more. C-class shares do not charge a subscription fee; their redemption fee is: 1.50% for holding periods less than 7 days, and 0% for holding periods of 7 days or more. Additionally, C-class shares are charged an annual sales service fee of 0.30%. F-class shares do not charge a subscription fee; their redemption fee is: 1.50% for holding periods less than 7 days, and 0% for holding periods of 7 days or more. For details, please refer to the fund's prospectus, fund contract, and other legal documents.

Sales fees for Free Cash Flow ETF GF: when investors subscribe for or redeem fund shares, the subscription and redemption agent broker may charge a commission at a standard rate not exceeding 0.50%, and the transaction fee for on-exchange trading shall be determined by the actual charges of the securities company. For its linked A-class shares, the subscription fee rate is: 1.20% for amounts less than 1 million yuan, 0.80% for amounts from 1 million yuan (inclusive) to 3 million yuan, 0.50% for amounts from 3 million yuan (inclusive) to 5 million yuan, and a fixed 1,000 yuan per order for amounts of 5 million yuan and above. The redemption fee for A-class shares is: 1.50% for holding periods less than 7 days, and 0% for holding periods of 7 days or more. C-class shares do not charge a subscription fee; their redemption fee is: 1.50% for holding periods less than 7 days, and 0% for holding periods of 7 days or more. Additionally, C-class shares are charged an annual sales service fee of 0.30%. For details, please refer to the fund's prospectus, fund contract, and other legal documents.

Sales fees for Dividend ETF GF: when investors subscribe for or redeem fund shares, the subscription and redemption agent broker may charge a commission at a standard rate not exceeding 0.50%, and the transaction fee for on-exchange trading shall be determined by the actual charges of the securities company. For its linked A-class shares, the subscription fee rate is: 1.20% for amounts less than 1 million yuan, 0.80% for amounts from 1 million yuan (inclusive) to 5 million yuan, and a fixed 1,000 yuan per order for amounts of 5 million yuan and above. The redemption fee for A-class shares is: 1.50% for holding periods less than 7 days, and 0% for holding periods of 7 days or more. C-class shares do not charge a subscription fee; their redemption fee is: 1.50% for holding periods less than 7 days, and 0% for holding periods of 7 days or more. Additionally, C-class shares are charged an annual sales service fee of 0.30%. For details, please refer to the fund's prospectus, fund contract, and other legal documents.

Risk Warning: The aforementioned funds invest in the securities market. Before investing in the aforementioned funds, investors need to fully understand the product characteristics of the aforementioned funds and bear various risks that may arise during the fund investment. The aforementioned funds are issued and managed by GF Fund Management Co., Ltd., and the distribution agency does not assume responsibility for the investment and payment of the products. Please carefully read the fund contract, prospectus, and other legal documents of the aforementioned funds before investing, and fully understand the details and risk characteristics of the aforementioned funds. The aforementioned are stock-type funds, with risks and returns higher than those of hybrid funds, bond funds, and money market funds; specific risk ratings shall be based on the rating results provided by the fund manager and sales institutions. Please choose products that match your risk tolerance and investment objectives. Funds involve risks; invest with caution.