According to a recent research report, Guotai Haitong Securities Co., Ltd. has established a comprehensive asset allocation framework to guide investment decisions. This framework integrates strategic asset allocation, tactical asset allocation, and adjustments for major events.

Based on this model, the firm suggests that potential shocks from shifts in macro liquidity expectations may be limited. Instead, the pricing of major asset classes is expected to continue being driven by expectations surrounding the AI industry trend and ongoing corrections in market risk appetite.

For the month of June, the recommendation is to maintain overweight positions in A-shares, H-shares, US equities, German stocks, Japanese stocks, and industrial metals.

Key Allocation Recommendations for June 2026

The firm proposes an equity allocation weight of 52.50% for June 2026. This includes an overweight stance on A-shares (10.00%), H-shares (10.00%), US stocks (17.50%), European equities (7.50%), and Japanese stocks (7.50%).

Equity Market Outlook

Regarding equities, the report highlights several points. Firstly, China's resilient economy is seen as supportive for its capital markets, warranting an overweight recommendation for A-shares and H-shares. The downward revision of investor risk appetite and expectations is considered largely complete, allowing the market to refocus on its intrinsic growth drivers.

Recent acceleration in capital market reforms signals a policy intent to stabilize and improve market conditions. Traditional industries are gradually stabilizing, while significant market demand and the computing power gap with the US are expected to spur investment in China's emerging industries.

Furthermore, China's competitive manufacturing sector is expanding globally, leading to the emergence of multinational corporations and potential improvements in return on equity. This could lead to an upward revision of growth expectations for China in 2026. Hong Kong-listed shares are also anticipated to benefit from the robust and resilient economic performance of mainland China.

Secondly, a marginal improvement in Middle East geopolitical tensions is viewed as favorable for suppressing oil prices. While markets may repeatedly adjust their expectations for global macro liquidity, potentially amplifying volatility in risk assets, the overall trend is expected to be upward, supporting the overweight call on US, European, and Japanese equities.

Fixed Income Allocation Strategy

For bonds, a total allocation weight of 37.50% is suggested for June 2026. This comprises long-duration Chinese government bonds (12.50%), short-duration Chinese government bonds (7.50%), long-duration US Treasuries (10.00%), and short-duration US Treasuries (7.50%).

The report notes that the correction in macro liquidity expectations and market risk appetite could enhance the attractiveness of Chinese government bonds. Although an imbalance between financing demand and credit supply persists, the central tendency of risk appetite is trending upward, which may prompt households and corporations to rebalance their asset allocations.

The marginal easing of Middle East tensions, aiding in oil price suppression, could further facilitate this correction in expectations, improving the relative value of government bonds.

However, given the ongoing resilience of the US economy, US Treasuries are considered less attractive compared to risk assets. Despite geopolitical improvements, stronger-than-expected employment data may lead markets to repeatedly reassess global liquidity expectations.

Commodities Market View

A commodities allocation weight of 10.00% is recommended, comprising a neutral stance on gold (5.00%) and crude oil (1.25%), and an overweight position on industrial metals (3.75%).

For commodities, the analysis indicates that repeated market adjustments to global liquidity expectations could periodically pressure gold prices. Nonetheless, gold's long-term strategic value is deemed intact, serving as a hedge against uncertainty amid a potential restructuring of the global order and a trend toward deteriorating geopolitics.

Conversely, improvements in the geopolitical landscape and rising risk appetite are seen as enhancing the investment appeal of industrial metals. Factors such as the development of power-related infrastructure and transportation, AI computing expansion, and military facility upgrades are generating new demand.

Metals like copper may experience periods of supply-demand imbalance. The recent rebound in industrial metals, driven by the aforementioned factors, suggests their relative value has improved.

The report concludes with standard risk disclosures, noting potential limitations in the analytical dimensions, subjectivity in model design, discrepancies in historical and projected data, adjustments in market consensus, and the inherent constraints of quantitative models.