Underestimating stagflation, fundamentals improving, focus on non-banking assets with attractive valuation

Event: Non-bank financial sector rebounds in early trading today

In the morning, the A-share brokerage index rose by 1.99%, and the insurance index increased by 2.68%.

Hong Kong Securities ETF E Fund (513090) up 3.18%

Securities and Insurance ETF E Fund (512070) up 2.65%

Securities ETF E Fund (512570) up 1.98%

How to understand the future potential of the non-bank sector?

1. Low valuation levels, with pessimistic expectations fully priced in; non-bank financials are highly cost-effective assets in the market.

The valuation of A-share brokerage sector, with PB and PE ratios, is at the 24th and 7th percentile over the past 10 years, indicating low valuation levels;

Hong Kong brokerage stocks’ 2025 estimated dividend yield is approaching or exceeding 5% for many, with limited downside potential.

2. Improving fundamentals

As of March 13, the average daily trading volume of stocks in Q1 2026 was 3.3 trillion yuan, an 88% year-on-year increase. Under a low base, it is expected that the overall listing of brokerages will continue to be highly active in Q1 2026.

3. Upside potential options

If the market continues to break through higher levels, brokerages resume growth in innovative businesses, or market pessimism about insurance capital investment eases, non-bank financials have significant flexibility.

Related products:

Hong Kong Securities ETF E Fund (513090): The only ETF investing in Hong Kong securities index, with a latest scale of 23.3 billion yuan, T+0 trading, with an average daily trading volume of 10.2 billion yuan over the past year.

Securities and Insurance ETF E Fund (512070): The largest securities and insurance ETF in A-shares, with a latest scale of 17.3 billion yuan; the ETF with the highest insurance content in A-shares, with insurance accounting for 39%, and securities firms 60%.

Securities ETF E Fund (512570, linked A/C: 012590 / 012700), latest scale of 2.5 billion yuan.