Data from Wind shows that as of April 15, 2026, the scale of public fund FOFs has exceeded 310 billion yuan, surging from the low point at the end of 2024 to a new high, marking explosive growth. Recently, Zhao Sixuan, Fund Manager of the Pension and Asset Allocation Department at Invesco Great Wall Fund, stated in a media exchange that the current economic growth is undergoing a mild recovery, with rising oil prices driving inflation upward. Corporate costs are under pressure while end-demand remains weak, leading market structural opportunities to concentrate in areas such as the inflation chain, resource commodities, and technologically self-reliant sectors. In a volatile market characterized by rapid sector rotation, retail investors often find it challenging to time the market effectively. In contrast, FOFs, leveraging their advantages across assets, geographies, and strategies, are poised to offer a more stable investment experience amid increasing market volatility.

Focus on Three Key Areas Analyzing the current market, Zhao Sixuan pointed out that the domestic economy exhibits structural characteristics, with exports maintaining resilience and inflation levels rebounding, although the rise in inflation is primarily driven by oil prices. While the economy is gradually emerging from deflationary territory, corporate profits are being squeezed by rising costs, and the recovery in end-consumer demand remains tepid, posing certain constraints on the revival of domestic demand. Regarding the bond market, he holds a neutral view, suggesting that in the current interest rate environment, expectations for static returns from pure bond products should not be set too high. Instead, they are better positioned as stabilizing anchors within a portfolio, providing steady coupon income and reducing volatility. For the equity market, he emphasizes three key areas:

First, the cyclical sector serves as the core focus for current allocation. Rising inflation directly boosts prices for energy, bulk commodities, and essential consumer goods. Sectors such as oil, petrochemicals, coal, and hog farming combine stagflation attributes with cyclical bottom logic. Taking hog farming as an example, the industry is currently at a price low, with capacity clearing accelerating, suggesting strong potential for short-term rebounds. Similarly, the real estate sector is at a cyclical bottom; although its recovery cycle may be prolonged, it presents value for contrarian positioning.

Second, resource commodities represent an important long-term sector he favors. Zhao Sixuan believes that against the backdrop of rising global resource nationalism, the supply of key minerals like lithium, cobalt, nickel, and rare earths continues to contract, leading to increased pricing power. Assuming the global economy avoids a deep recession, the resource sector's performance has sustainable support. Among these, electrolytic aluminum, gold, and rare earths offer the most attractive risk-reward profiles.

Additionally, within the technology sector, which is highly favored by capital, the focus is on two key areas: one is the overseas computing power chain following global AI capital expenditure trends, and the other is the domestically controlled and self-reliant technology sector, driven by national strategic necessity and ongoing technological iteration, with the latter offering higher medium-to-long-term certainty. Zhao Sixuan emphasized that AI development is currently in a phase of存量替代, where companies replace large numbers of employees with a few AI specialists, creating a counter-cycle of reduced employment and consumption. Breaking this cycle requires two types of forces: first, genuine productivity breakthroughs at the technological level, such as AI enabling industries like energy, innovative pharmaceuticals and healthcare, robotics, and fully automated manufacturing; and second, changes at the societal system level, including optimization of social distribution mechanisms, bolstering the consumption base through adjustments like transfer payments and improved social welfare systems. As a new technological revolution, AI may experience investment bubbles in the short term but is destined to have profound positive long-term impacts on human society.

Achieving Diversified Asset Allocation via FOFs How can market insights be translated into an investment portfolio? Zhao Sixuan's answer lies in FOFs, which offer advantages across assets, geographies, and strategies, while FOF managers can screen for high-quality financial products across the entire market. Zhao Sixuan noted that with the increasing variety of ETF tools and enhanced research services on fund managers by third-party institutions, the core elements of FOF management have gradually shifted towards macro and strategic allocation research. With years of experience in investment management at a bank, Zhao Sixuan possesses extensive practical expertise in major asset allocation and FOFs, well-versed in the logic of multi-asset, multi-strategy portfolio operations.

Zhao Sixuan adheres to a top-down approach for determining direction and a bottom-up approach for risk control. Specifically, he uses macro and meso-level analysis to set the portfolio's allocation direction, combining product characteristics and return objectives to define medium-term allocation strategies. Simultaneously, a bottom-up process involves carefully selecting allocation tools and deeply researching managers to achieve steady portfolio appreciation. Regarding sector allocation construction, Zhao Sixuan emphasizes integrating quantitative models with qualitative judgment. For assessing medium-term景气度, factors such as economic cycles, corporate profit cycles, risk appetite, and valuation cycles are covered to help gauge the medium-term direction of stock indices. For short-term indicators, metrics like market turnover, northbound and southbound capital flows, currency exchange rate differentials, and the equity-bond yield spread are incorporated to form a comprehensive allocation signal system. Qualitative judgment focuses on forward-looking trend analysis, utilizing industry chain research, expert interviews, and in-depth policy interpretation to capture industrial logic and sudden changes that quantitative models might miss. In terms of investment strategy, he adopts a cyclical perspective to grasp market trends, values contrarian positioning, actively seeks industries and assets at relatively low levels with potential upward inflection points to mitigate large drawdowns, and identifies assets with favorable risk-reward profiles to enhance the portfolio's return-to-risk ratio.

From Zhao Sixuan's perspective, FOFs provide a second layer of risk diversification—dispersing individual stock and sector risks through the underlying funds, while also mitigating systemic market risks through major asset class diversification. During portfolio operation, he adheres to the principle of diversification, avoiding heavy bets on single sectors or concentrated positions in单一资产. This framework has been fully validated in the Invesco Great Wall Junfeng Balanced Pension Target Three-Year Holding Mixed FOF he manages. The 2025 annual report indicated that the fund achieved favorable returns in a divergent market through relatively balanced sector allocation and a mix of different assets, including domestic stocks and bonds, overseas equities, and commodities, demonstrating the advantages of multi-asset allocation. Wind data shows that as of April 17, the fund's one-year and two-year returns were 18.93% and 26.76% respectively (compared to benchmarks of 17.59% and 28.22% for the same periods). Recently, the Invesco Great Wall Hexi Antai Three-Month Holding Mixed FOF, for which Zhao Sixuan is the designated fund manager, has completed its initial offering.

Looking ahead, Zhao Sixuan pointed out that the environment of global liquidity easing is difficult to disprove, and market risk appetite has somewhat recovered, but sector rotation is expected to significantly accelerate. For ordinary investors, rather than frequently switching strategies and chasing highs, utilizing FOFs to achieve diversified asset allocation may be a more prudent approach to capturing structural opportunities while striving for stability.