AI-Powered Transformation: China Assets Find Stability in Gold, Defense and AI Applications

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Hong Kong ETFs Emerge as Key Vehicles for Retail Investors

At the 12th Fullgoal Forum, top strategists and fund managers identified gold, defense stocks and AI applications as portfolio stabilizers in China’s evolving investment landscape, while highlighting Hong Kong ETFs as efficient tools for capturing the AI revolution.

Three Anchor Assets for Volatile Markets

Leading analysts presented a unified view on core holdings:

Asset	Rationale	Key Proponent
Gold	Hedge against dollar weakness	Liu Chenming, GF Securities
Defense Stocks	Geopolitical insulation	Zhang Qiyao, Industrial Securities
AI Applications	Commercialization wave	Multiple analysts

Dual-Track Investment Strategy

Experts recommended balancing:

1. Growth Opportunities:
   • AI downstream applications
   • Smart driving technologies
   • Biotech globalization
2. Defensive Positions:
   • High-dividend stocks (4%+ yield)
   • Undervalued consumer staples

Hong Kong Market Advantages

Fullgoal Fund managers highlighted:

• Valuation Discount: PB ratios below 30th percentile
• Sector Concentration: 82% of key ETFs cover internet, biotech and smart vehicles
• Structural Growth: AI commercialization reshaping internet leaders

ETF Revolution

China’s passive funds surpassed active in 2024 (¥4.6 trillion AUM) with innovations:

• Smart Beta strategies combining value and quality factors
• Multi-model decision systems for tactical allocation
• Five core Hong Kong ETF themes: internet, biotech, smart vehicles, consumption, dividends

AI Development Roadmap

Xu Zhixiang’s four-phase framework:

1. Perceptual AI (computer vision/speech)
2. Generative AI (content creation)
3. Assistant AI (wearable devices)
4. Physical AI (robotics/autonomous systems)

“2025 marks the inflection point where AI applications move from labs to factories and homes,” noted Xu, pointing to DeepSeek’s breakthroughs as validation.

Practical Investor Takeaways

For retail participants:

• Core-satellite approach: 60% anchor assets + 40% growth exposures
• ETF selection by: expense ratio (<0.5%), liquidity (>¥100M daily), tracking error
• Rebalance quarterly to maintain risk profile

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