December A-share Market Style Outlook: Large Cap First, Growth Before Value

Core Viewpoints ⚑ Style Outlook: Focus on Large Cap, Growth First then Value. As we enter December, the core market trading will revolve around the Federal Reserve's interest rate meeting and the important domestic year-end meetings. Specifically, first, in the 10 years from 2015 to 2024, the large cap style in December has shown a clear advantage, which is related to the possible policy expectation trading around the December Politburo meeting and the Central Economic Work Conference, as well as the gradual entry into the annual report preview window in late December. Additionally, historically, the probability of the 300 Dividend Index outperforming the Wind All A Index in late December is relatively high. Second, the central bank's third-quarter monetary policy implementation report added the term "cross-cycle." Considering that the central bank has restarted the buying and selling of government bonds and the rebound of domestic inflation, it is expected that the domestic policy force window will wait until next year. Third, there is a high probability of a hawkish rate cut by the Federal Reserve in December, and the US dollar index is likely to confirm a phase top, with the impact of external liquidity on the market expected to weaken significantly compared to November. Fourth, on the funding side, 1) at the end of the year, with the increase in domestic settlement demand and the US dollar index peaking, the RMB exchange rate is likely to maintain relative strength, which may attract temporary foreign capital inflows, benefiting the large cap style of A-shares; 2) several technology, innovation, AI, and chip-related funds are being issued, concentrated in the first half of December, which will bring incremental funds to related sectors such as AI and chips; 3) from the end of December to the end of the first quarter of the following year is an important allocation window for insurance funds, and the previously adjusted dividend sectors are expected to receive renewed attention. In summary, the style in December is more recommended to be large cap, possibly focusing on growth first and then value. ⚑ Review of Major Asset Performance: In November, global stock markets fell broadly, with US stocks > A-shares > Hong Kong stocks. In the foreign exchange market, the US dollar index weakened, and the RMB exchange rate led the gains. In terms of commodities, precious metal prices led the gains this month, mainly due to the silver short squeeze, while industrial metal prices fluctuated at high levels. In the bond market, US Treasury yields fell, while Chinese bond yields rose slightly, and the China-US yield spread narrowed. ⚑ Liquidity and Supply-Demand of Funds: In December, incremental funds are expected to maintain a stable net inflow overall, and foreign capital activity is likely to continue to rise. In terms of macro liquidity, the monetary market funding in November remained stable under the central bank's support. Looking ahead to December, seasonal factors at the year-end may increase fluctuations in the funding environment. Considering the central bank's clear supportive stance on monetary policy, the funding environment is likely to continue to remain reasonably ample. In terms of external liquidity, Federal Reserve officials have continuously adopted a "dovish" stance at the end of November, and US economic data also indicates an increased possibility of rate cuts, with expectations for a Federal Reserve rate cut in December heating up again. In November, the stock market saw a shift to net outflows of tracked funds, while on the supply side, the scale of newly issued equity funds rebounded significantly, the net subscription scale of ETFs shrank, and financing funds turned to net outflows. On the demand side, the scale of net reductions by major shareholders expanded; IPO issuance rebounded but refinancing scale declined, leading to an overall expansion in funding demand. In November, newly issued funds became the main incremental funds in the market. Looking ahead to December, incremental funds are expected to maintain a stable net inflow overall, and foreign capital activity is likely to continue to rise ⚑ Market Sentiment and Capital Preference: Market risk appetite first decreased and then increased, returning to low volatility dividends + defensive trading characteristics in small and micro-cap stocks, accompanied by a significant shrinkage in trading volume during market adjustments. From the perspective of primary industries, the market's choice is to adopt a defensive style, with industries such as banking, textiles and apparel, oil and petrochemicals, and light manufacturing performing well, while sectors related to AI, such as media and communications, also recorded gains. The industries that performed poorly were mainly concentrated in areas that had previously seen significant gains or sectors with a high proportion of thematic tracks, including computers, automobiles, and electronics. Main Text I. Market Style Outlook: Large Cap First, Growth Then Value Entering December, the core of market trading will revolve around the Federal Reserve's interest rate meeting and important domestic year-end meetings. Considering seasonal factors, changes in domestic and external liquidity, and changes in incremental capital, the style for December is more recommended to be large cap, possibly transitioning from growth to value. Recommended style indices for December include: CSI 300, STAR Market 50, low volatility dividends, 300 materials, and Hong Kong Stock Connect Technology (987008.CNI). Specifically, first, in the 10 years from 2015 to 2024, the large cap style in December has shown a clear advantage, related to the possible policy expectations trading around the December Politburo meeting and the Central Economic Work Conference, as well as the gradual entry into the annual report preview window in late December. Historically, the probability of the 300 dividends outperforming the Wind All A index in late December is relatively high. Second, the central bank's third-quarter monetary policy execution report added the term "cross-cycle," considering that the central bank has restarted the buying and selling of government bonds and domestic inflation is rising, it is expected that the domestic policy force window will wait until next year. Third, the probability of a hawkish rate cut by the Federal Reserve in December is relatively high, and the US dollar index is likely to determine a phase top, with external liquidity's impact on the market expected to weaken significantly compared to November. Fourth, on the capital side, 1) as domestic settlement demand increases towards the end of the year, coupled with the US dollar index peaking, the RMB exchange rate is likely to maintain relative strength, which may attract phased inflows of foreign capital, benefiting the large cap style of A-shares; 2) multiple funds related to technology, STAR Market AI, and chips are currently being issued, with issuance concentrated in the first half of December, which will bring incremental capital to related sectors such as AI and chips; 3) the end of December to the end of the first quarter of the following year is an important allocation window for insurance funds, and previously adjusted dividend sectors are expected to receive renewed attention. 1. Seasonal Effect: Important Year-End Meetings + Gradual Entry into Performance Disclosure Period, Large Cap Style Clearly Dominates in December In the 10 years from 2015 to 2024, the win rate of large caps in December is higher than that of small caps. Specifically, in terms of style, the ratio of large caps outperforming small caps is 70%, with a 60% probability of outperforming the Wind All A index; the probability of value outperforming growth is 60%, but the probabilities of both value and growth outperforming the Wind All A index are 50% From two dimensions, the winning rates of large-cap value and large-cap growth are basically comparable. Among the major broad-based indices, the SSE 50 has the highest probability of outperforming and winning against the Wind All A index. Regarding the seasonal characteristics of December's style, there are two important factors driving the dominance of large-cap styles. First, the Central Political Bureau meeting and the Central Economic Work Conference will be held in December, becoming a window period for market policy games. Therefore, the trading activity of cyclical sectors related to policies often increases, leading to better performance of large-cap blue chips. Historically, before and after the Central Political Bureau meeting in December, the average increase and probability of increase for large-cap style indices such as the SSE 50 and CSI 300 are generally higher, while small-cap stocks represented by the CSI 1000 have lower increases and probabilities of increase. Second, from late December to January, it is the disclosure period for annual performance forecasts of listed companies. A small number of listed companies will disclose their annual performance forecasts in late December, causing the market to start trading based on annual performance expectations. During this phase, small-cap stocks with significant performance fluctuations often face certain pressures. From the perspective of index performance, from mid-December to the end of December, the probability of the CSI 300/300 Dividend rising is relatively high, and the excess returns are also quite noticeable, while the CSI 1000 shows mixed results, with a higher probability of underperforming the index. 2. Domestic Liquidity: Monetary policy emphasizes cross-cycle, with policy efforts expected next year The central bank's third-quarter monetary policy implementation report mentioned "doing a good job in counter-cyclical and cross-cycle adjustments," with the addition of the term "cross-cycle," marking the first mention of "cross-cycle" since the second half of 2024. In the 2025 Q3 People's Bank of China monetary policy committee quarterly meeting, it was mentioned to "strengthen counter-cyclical adjustments"; the monetary policy implementation report released in mid-August 2025 stated "strengthen counter-cyclical adjustments." Compared to these two recent statements, the 2025 Q3 monetary policy implementation report was adjusted to "do a good job in counter-cyclical and cross-cycle adjustments." The term "cross-cycle" was introduced in July 2020 during the Central Political Bureau meeting in response to the adjustment of policy rhythm after the pandemic, and since then, monetary policy has gradually returned to normalization. **Considering that the central bank has restarted the buying and selling of government bonds, domestic inflation is rising, and economic growth is generally stable, the likelihood of implementing broad-based tools such as reserve requirement ratio cuts and interest rate cuts within the year is limited. Additionally, further attention needs to be paid to whether there will be any fine-tuning of monetary policy direction during the Central Political Bureau meeting and the Central Economic Work Conference to be held in December ** 3. External Liquidity: The Fed may hawkishly cut rates in December, with a high probability of a temporary peak in the dollar index Since November, in the absence of key economic data and with Fed officials making both hawkish and dovish statements, market expectations for a rate cut by the Fed in December have experienced a rollercoaster-like change, leading to significant fluctuations in global capital markets. Currently, there are still differences within the Fed regarding the expectation of a rate cut in December, and there is a lack of strong data to support a shift before the monetary policy meeting. In the situation of "cut or not cut," the Fed has two options: a hawkish rate cut or a dovish pause. Considering that the market's expectation for a rate cut has risen to over 80%, it is expected that the Fed will choose the relatively prudent approach of a "hawkish rate cut." This means a rate cut in December, but in future policy outlooks, the Fed may emphasize making judgments based on data. On one hand, the expectation for a rate cut in December has already been reflected in previous periods, and the current market expectation for a rate cut in January is not high. With a month and a half until the January meeting (January 28), both the market and the Fed need more data to make judgments and adjust expectations. On the other hand, delayed economic data may cause short-term disturbances in the market, but given the current low expectations for a January rate cut, the impact may be relatively limited. Another factor that may affect the market is the nomination of the new Fed chairman. Recently, Trump indicated that he might nominate a new Fed chairman before Christmas, with the current popular candidate being White House official Hassett, who advocates for politically coordinating monetary and fiscal policies and believes that further rate cuts are necessary. His nomination could imply the most aggressive rate-cutting path but also comes with a high degree of policy uncertainty. Therefore, there may be short-term disturbances in the market around the time of the December nomination. As the Fed cuts rates, the dollar index is likely to confirm a temporary peak, and if Japan begins to raise rates, it will further increase downward pressure on the dollar index. Against this backdrop, coupled with the increased domestic demand for currency settlement at the end of the year, it is expected that the renminbi may appreciate slightly in the future. Since the beginning of this year, a noteworthy phenomenon is the significant increase in the correlation of global major asset classes. Whether it is the tariff policy implemented by Trump or the recent indecisiveness of the Federal Reserve regarding interest rate cuts, major asset classes have experienced widespread declines, with traditional safe-haven assets like gold and Bitcoin not falling any less than equity assets; on the other hand, in the bull market environment driven by AI narratives, the increase in gold prices has also been comparable to that of equity assets, often showing synchronous movements. Qualitatively, the correlation coefficients of most major asset classes have increased compared to 2018, corroborating the "perceptual change" of assets moving in the same direction. The essential reason behind this phenomenon is the early rush for loose liquidity. From a narrative perspective, whether it is the influx of incremental funds into the market, low-interest trading of metals like gold and copper, or the digital currency market driven by stablecoins, it essentially reflects investors' early rush to convert cash into various non-cash assets in anticipation of future loose liquidity and low interest rates. From a data support perspective, the Bank of America’s November fund manager survey shows that the cash ratio in portfolios has dropped to 3.7%, the lowest level in nearly a decade. Overall, the trading behavior of "short cash, long all assets" has significantly increased the sensitivity of global major assets to liquidity, reflected in their synchronous rise and fall with changes in interest rate cut expectations. Looking ahead, the importance of the Federal Reserve's December meeting has greatly increased, which will indicate the direction of changes in major assets for the subsequent period. 4. Funding situation: The appreciation of the RMB may attract phased inflows of foreign capital; concentrated issuance of technology funds RMB appreciation may drive phased net inflows of foreign capital Recently, with the fluctuating expectations of the Federal Reserve's interest rate cuts, the US dollar index has strengthened in phases, with the central level of the dollar index rising and once climbing above the 100 mark, but the RMB has shown strong resilience against the US dollar. The central level of the USD/RMB exchange rate continues to decline, with the lowest point on November 26, 2025, reaching 7.0788, while the RMB exchange rate has maintained a relatively strong operating trend. The recent strength of the RMB is the result of both internal and external factors. On one hand, this year, China's exports have exceeded expectations, boosting market confidence in the RMB, coupled with the seasonal peak of foreign exchange settlement in the fourth quarter, increasing the supply of US dollars in the foreign exchange market; on the other hand, the continuous release of appreciation signals from the RMB central parity has effectively guided market expectations. In addition, with recent dovish remarks from Federal Reserve officials, expectations for interest rate cuts have once again heated up, and the retreat of the US dollar index has further strengthened the appreciation trend of the RMB. Overall, under the combined effects of strong inherent resilience in the domestic economy, effective policy guidance, and improved market supply and demand, the RMB exchange rate has maintained a relatively strong trend Looking ahead, with the market stabilizing and recovering, and the US dollar index peaking, coupled with the fact that the end of the year is traditionally a window for foreign capital to layout A-shares for the New Year market, in the short term, foreign capital is expected to contribute incremental funds through net inflows. The inflow of foreign capital is relatively beneficial for the large-cap style of A-shares. Multiple Technology Funds Concentrated Issuance On November 21, 16 technology-themed funds were approved on the same day, including the first batch of 7 artificial intelligence ETFs, 3 chip ETFs, 4 chip design-themed ETFs, and 2 actively managed equity funds (Ping An Technology Selected Mixed Fund, ICBC Credit Suisse Technology Smart Selected Mixed Fund). Currently, these funds are being issued successively. The funds being issued are mainly concentrated in early December, which will bring incremental funds to related sectors such as AI and chips. Performance of Major Asset Classes and A-share Review 1. Performance of Major Asset Classes Stock Market: Global stock markets fell, with US stocks > A-shares > Hong Kong stocks. In the US stock market, the Nasdaq slightly declined, while the S&P and Dow Jones saw slight increases, with poor performance in the technology sector. In A-shares, the market adjusted after a rise, mainly affected by disturbances from overseas narratives. In the Hong Kong stock market, there was a significant decline in November, mainly influenced by the US stock market, with "divergence in interest rate cut expectations + AI bubble theory" spreading, leading to a decline in the technology sector. Foreign Exchange: The US dollar index weakened, and the RMB appreciated slightly. The US dollar index fluctuated significantly, gradually declining since the beginning of the month, but with hawkish statements from Federal Reserve officials, the index temporarily broke through the 100 mark. Subsequently, as Fed officials turned dovish, the dollar index slightly declined. In terms of exchange rates, the RMB appreciated against the US dollar. Commodities: Precious metal prices led the rise, while industrial metal prices fluctuated slightly. In November, silver prices surged significantly, mainly due to a short squeeze, where some silver traders needed to cover short positions and bought a large amount of silver spot, while others may have participated in the "squeeze" market, further driving up silver prices. Other metals showed an overall trend of falling first and then rising in November, with prices retreating mid-month due to fluctuating interest rate cut expectations, and at the end of the month, with increased certainty of interest rate cuts and rising silver prices, non-ferrous metal prices approached high levels again. Bond Market: US Treasury yields declined, while Chinese bond yields rose, narrowing the China-US yield spread. US Treasury yields fell to 4.02%, while Chinese bond yields rose to 1.84%, mainly due to year-end profit-taking by institutions, coupled with the upcoming implementation of new regulations for public bond funds. The China-US yield spread narrowed to 218 basis points 2. A-share Review: Market Volatility, Style Shifts to Cyclical Overall, after reaching a new high in November, the market quickly retreated, and the specific trend can be divided into three phases: Phase One (11/1-11/16): Steady Rise, Style Shifts to Cyclical. At the end of October, the meeting between the Chinese and U.S. presidents reached a phased consensus on tariffs and other issues, dissipating the uncertainties brought by geopolitics. A-shares gradually rose, with the Shanghai Composite Index breaking through previous highs. At this time, the AI bubble theory in the U.S. stock market began to ferment, combined with the implementation of new public fund regulations, leading to a significant decline in the A-share technology sector, and the market style shifted to cyclical. Meanwhile, prices of precious metals such as gold, silver, copper, and aluminum continued to strengthen, with the price increase becoming the main theme of the market. By industry, this phase saw comprehensive, oil and petrochemical, and basic chemicals leading the gains, while the TMT sector lagged behind. Phase Two (11/17-11/23): Global Decline, Technology Sector Declines Most. The macro disturbances in this phase included a significant drop in interest rate cut expectations and the peak of the AI bubble theory, leading to substantial declines in the three major U.S. stock indices, affecting global assets due to hawkish statements from the Federal Reserve. During this phase, the A-share market experienced a broad decline, with the Shanghai Composite Index falling 3.9% and the ChiNext Index dropping 6.2%. All 31 Shenwan industries fell, with electric power equipment leading the market decline. Phase Three (11/24-11/30): Recovery After Overselling, Technology Sector Leads Rebound. As Federal Reserve officials made dovish statements to stabilize the market, risk assets represented by U.S. stocks began to rebound. At the same time, Google emerged as a new leader in the AI sector, and A-shares that had previously declined significantly in overseas computing power began to recover, with Google Chain leading the market. By industry, the technology sector led the rebound, with communication, electronics, and media among the top gainers in the Shenwan industries. 3. Major Events to Watch: Focus on December's Federal Reserve Meeting, Political Bureau Meeting, and Central Economic Work Conference Entering December, the key data and meeting timelines that will impact the A-share market are as follows. On the overseas front, the December Federal Reserve meeting will influence market expectations for future interest rate cuts. Domestically, the Political Bureau meeting and the Central Economic Work Conference will be held in December. Currently, market expectations for these meetings are relatively low, and any statements exceeding expectations during the meetings will be a key trading direction in December Liquidity and Supply-Demand of Funds 1. Domestic Policy and Macroeconomic Liquidity (1) Domestic Liquidity: The funding environment remains stable under the central bank's support In November, the monetary market's funding environment remained stable under the central bank's support. In November, the central bank's net injection in the open market was 43.8 billion yuan, with a net withdrawal of 556.2 billion yuan from reverse repos, and a net injection of 100 billion yuan from MLF (Medium-term Lending Facility) increases. The continuous net injection of 500 billion yuan from the buyout reverse repos for the sixth consecutive month effectively met the medium-term liquidity demand. In response to factors such as the concentrated issuance of government bonds, increased pressure from the maturity of interbank certificates of deposit, and tax payment periods, the central bank has continued to enhance liquidity management, emphasizing a combination of medium- to long-term liquidity injection (net injection of 600 billion yuan from MLF and buyout reverse repos) and short-term liquidity smoothing (reverse repos), effectively offsetting short-term disturbances, keeping funding rates stable. Looking ahead to December, year-end seasonal factors may increase fluctuations in the funding environment. Considering the central bank's clear supportive stance on monetary policy, the funding environment is likely to remain reasonably ample. (2) External Liquidity: Expectations for a Fed rate cut in December heat up again At the end of November, Federal Reserve officials repeatedly signaled a "dovish" stance, and expectations for a Fed rate cut in December have heated up again. Federal Reserve Governor Waller expressed his support for a rate cut at the December meeting, as he is more concerned about the continued weakness in the U.S. labor market. San Francisco Fed President Mary Daly supports a rate cut next month, as the risks of a deteriorating job market outweigh the risks of rising inflation. Meanwhile, the U.S. non-farm payroll data for October and November is scheduled to be released on December 16, and the consumer price data for November will be published on December 18, meaning there will be no data available for reference before the Fed's meeting on December 10. U.S. economic data also indicates an increased likelihood of a rate cut. The U.S. Bureau of Labor Statistics reported on Tuesday that the PPI rose 0.3% month-on-month in September, in line with expectations, after a 0.1% decline in August. The core PPI, excluding food and energy, rose 0.1% month-on-month, below the expected 0.2%, and the previous value fell by 0.1%. ADP reported on Tuesday that as layoffs accelerated over the past four weeks, further signs of weakness are emerging in the U.S. labor market. Over the past four weeks, private sector employers have averaged a reduction of 13,500 jobs per week This shows an accelerated deterioration trend compared to the weekly data released a week ago, which reported a reduction of 2,500 jobs. According to data from the U.S. Census Bureau, overall retail sales in September increased by 0.2% month-on-month, lower than the 0.4% expected by economists; in contrast, the month-on-month increase in retail sales for August was 0.6%. 2. Stock Market Supply and Demand In November, the tracked funds in the stock market turned to a net outflow, with newly issued funds becoming the main incremental capital. On the supply side, the scale of newly issued equity funds significantly rebounded, the net subscription scale of ETFs shrank, and financing funds turned to a net outflow. On the demand side, the net reduction scale of important shareholders expanded; the scale of IPO issuance rebounded, but the scale of refinancing decreased, leading to an overall expansion in capital demand. In November, newly issued funds became the main incremental capital in the market. (1) Foreign Capital In November, expectations for a Federal Reserve interest rate cut fluctuated repeatedly, the U.S. dollar index rose and then fell, and the pressure of foreign capital outflow increased temporarily. At the end of November, as Federal Reserve officials frequently signaled dovish stances, the probability of a 25 basis point rate cut in December returned to over 80%, the U.S. dollar index fell, the renminbi exchange rate appreciated, and the CDS spread of China's 5-year sovereign bonds showed a marginal decline, easing the pressure of foreign capital outflow. In November, the average daily trading volume of northbound funds decreased from the October value of 274.5 billion yuan to 221.2 billion yuan. (2) Fund Issuance and ETF Subscription and Redemption In November, the issuance scale of equity public funds rebounded, with the issuance of active and passive equity funds totaling 54.4 billion shares, an increase from the October value of 37.9 billion shares. By the end of September 2025, the shares of equity public funds increased by 65.7 billion shares, while the shares of mixed funds decreased by 12.7 billion shares, resulting in a net increase of 52.9 billion shares. Considering the newly established shares in that month, it is estimated that the net subscription of old equity funds in October was 14.5 billion shares, with a net subscription ratio of 0.22% In November, the net subscription of ETFs was 31.1 billion shares, corresponding to a net inflow of 13.2 billion yuan. Structurally, in November, most broad-based index ETFs turned to net redemptions, while the CSI 1000 and CSI 2000 ETFs saw net subscriptions. The industry ETFs with the largest net subscription scale were mainly in CSI Medical, Securities, Robotics, and Alcohol, while Coal, Chemicals, Defense, and Banking ETFs had significant net redemptions. (3) Private Equity Funds According to the latest data from the Asset Management Association of China, as of October 2025, the management scale of private equity funds reached 7.01 trillion yuan, with 80,000 funds managed, an increase of 1 trillion yuan and 369 funds compared to September 2025. The management scale of private equity funds jumped in October. Additionally, the newly registered scale of private securities investment funds in October was 42.9 billion yuan, with 995 new registrations, showing a rebound compared to the previous value in September. (4) Financing Funds As of November 27, 2025, the financing balance was 2.45 trillion yuan, with a net inflow of financing turning from a previous value of 90.4 billion yuan in October to a net outflow of 13.8 billion yuan this month. The financing balance accounted for 2.58% of the circulating market value of A-shares, up from 2.55% in October, remaining at the 90.95 percentile since 2010. (5) Lock-up Release and Shareholder Increase/Decrease In November, important shareholders increased their holdings by 5.8 billion yuan and reduced their holdings by 46 billion yuan, resulting in a net reduction of 40.2 billion yuan, which is a decrease compared to the previous net reduction of 35 billion yuan in October 2025. Based on the closing price as of November 28, 2025, the estimated release scale in December 2025 is 420 billion yuan, which is an increase from the previous value of 182.5 billion yuan in November 2025 In terms of the scale of unlocks in different sectors, the Main Board is 198.8 billion yuan, the ChiNext Board is 58 billion yuan, the Sci-Tech Innovation Board is 158 billion yuan, and the Beijing Stock Exchange is 5.1 billion yuan. Considering that the scale of unlocks will rebound in December 2025, it is expected that the net reduction in holdings by major shareholders in the secondary market in December will slightly increase. (6) IPO and Refinance Based on the issuance date, there are 10 companies going public in November 2025, raising a total of 20.5 billion yuan, continuing to rebound from the previous value of 15.3 billion yuan in October. According to the listing date, the scale of private placement fundraising in November is 3.9 billion yuan, significantly down from the previous value of 35.9 billion yuan in October. Looking ahead to December, the scale of IPO issuance is expected to stabilize and rise. 3. Summary The incremental funds in December are expected to maintain a stable net inflow overall, and foreign capital activity is likely to continue to rise. In terms of macro liquidity, the monetary market funding situation in November remained stable under the protection of the central bank. Looking ahead to December, seasonal factors at the end of the year may increase fluctuations in the funding situation. Considering the central bank's clear supportive monetary policy stance, the funding situation is likely to remain reasonably ample. In terms of external liquidity, Federal Reserve officials maintained a "dovish" stance at the end of November, and U.S. economic data also indicated an increased possibility of interest rate cuts, with expectations for a rate cut by the Federal Reserve in December heating up again. In November, the stock market saw a net outflow of tracked funds, with a significant rebound in the scale of newly issued equity funds on the supply side, a reduction in net subscriptions for ETFs, and a net outflow of financing funds. On the demand side, the net reduction in holdings by major shareholders expanded; the scale of IPO issuance rebounded, but the refinancing scale declined, leading to an overall expansion in funding demand. In terms of main incremental funds in November, newly issued funds became the main incremental funds in the market. Looking ahead to December, incremental funds are expected to maintain a stable net inflow overall, and foreign capital activity is likely to continue to rise. Market Sentiment and Preferences 1. Market Risk Appetite In November, the Wind All A-share equity risk premium rose and then fell, with major indices fluctuating and consolidating. The Wind All A-share equity risk premium rose and fell below the average, with market risk appetite decreasing and then increasing, returning to a trading characteristic of low volatility dividends + small-cap stocks for defense, accompanied by a significant shrinkage in trading volume during market adjustments. 2. Broad Market Index and Style Trading Concentration In November, the trading volume proportion of major broad market indices continued to rise, with an overall increase in turnover rate. In terms of style, low volatility dividend + small and micro-cap styles performed prominently, while small-cap growth style showed high trading concentration and volatility, and value style trading concentration remained at historically low levels. 3. Industry Trading Concentration and Capital Preferences From the perspective of primary industries, the market's choice is to adopt a defensive style, with industries such as banking, textiles and apparel, oil and petrochemicals, and light industry manufacturing performing well due to their stagnation and low valuation. Sectors related to AI, such as media and communications, also recorded gains. Conversely, poorly performing industries are mainly concentrated in areas that previously saw significant increases or sectors with a high proportion of thematic tracks, including computers, automobiles, and electronics. Risk Warning and Disclaimer The market carries risks, and investment should be approached with caution. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial conditions, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investment based on this is at one's own risk