China Galaxy Securities: In Q2, public funds continued to increase their holdings in the non-ferrous metal sector, while in Q3, the focus will be on policy catalysts and interest rate cut expectations

According to the Zhitong Finance APP, China Galaxy Securities released a research report stating that in Q2, actively managed equity mutual funds continued to increase their holdings in the A-share non-ferrous metal industry, with the market value of heavy holdings in the non-ferrous metal industry rising to 2.21% of the stock investment market value. Specifically, actively managed equity mutual funds mainly increased their holdings in the A-share precious metals and rare metals sectors, with individual stock holdings in the A-share non-ferrous metal industry still primarily concentrated in leading companies in bulk commodities such as gold and copper, with a focus on increasing holdings in rare earth and silver stocks. In Q3, under the catalyst of domestic "anti-involution" policy expectations, the aluminum oxide, copper smelting, and lithium industries within the non-ferrous metal sector may become key targets for policy reform. The industry's prosperity and future supply-demand structure are expected to show a significant bottom rebound and marginal improvement expectations, while the A-share aluminum and lithium sectors, which are at the bottom of institutional allocation in recent years, may see increased holdings from actively managed equity funds in the third quarter, driving the stock prices of related sectors upward. Additionally, the rising expectations of interest rate cuts by the Federal Reserve in Q3 may guide global gold ETF funds to accelerate their inflow into gold, further pushing up gold prices. The main points of China Galaxy Securities are as follows: In Q2 2025, actively managed equity mutual funds continued to increase their holdings in the A-share non-ferrous metal industry, with the market value of heavy holdings in the non-ferrous metal industry rising to 2.21% of the stock investment market value: Based on the semi-annual report of mutual funds for 2025, we have statistically analyzed 8,283 actively managed equity funds in the entire market, including ordinary stock funds, equity-mixed funds, balanced mixed funds, and flexible allocation funds, and conducted a quantitative analysis of the proportion of fund allocations to the non-ferrous metal industry. In Q2, under the macro and policy expectation disturbances caused by the significant increase in "reciprocal tariffs" in the United States, actively managed equity mutual funds increased their positions in the gold sector, which has risk-averse properties, and increased their holdings in the rare earth magnetic materials sector, which benefits from China's countermeasures against U.S. tariff policies and highlights its strategic value, but reduced their holdings in the industrial metal sector, making slight adjustments to the internal sector structure while slightly increasing their holdings in the A-share non-ferrous metal industry. In Q2 2025, the market value of heavy holdings in the A-share non-ferrous metal industry by actively managed equity mutual funds accounted for 2.21% of the stock investment market value, an increase of 0.03 percentage points from 2.18% in Q1 2025, marking two consecutive quarters of increased holdings in the A-share non-ferrous metal industry. In Q2 2025, actively managed equity mutual funds mainly increased their holdings in the A-share precious metals and rare metals sectors: In terms of sub-industries of A-share non-ferrous metals, in Q2 2025, the market value of heavy holdings in the copper, aluminum, lead-zinc, gold, rare earth, tungsten, lithium, other rare metals, metal new materials, magnetic materials, and non-metal new materials sectors accounted for 0.89%, 0.19%, 0.11%, 0.48%, 0.07%, 0.002%, 0.03%, 0.15%, 0.07%, 0.04%, and 0.18% of the fund's stock investment market value, respectively, with changes from Q1 2025 being +0.04pct, -0.17pct, +0.05pct, +0.04pct, +0.05pct, +0.001pct, -0.005pct, -0.001pct, +0.02pct, -0.04pct, and +0.04pct In Q2 2025, actively managed equity public funds' holdings in the A-share non-ferrous metal industry remain primarily concentrated in leading companies of bulk commodities such as gold and copper, with a focus on increasing positions in rare earth and silver stocks: In Q2 2025, the total market capitalization of the top 10 A-share non-ferrous metal stocks heavily held by actively managed equity public funds accounted for 73.31% of the total market capitalization of all heavily held A-share non-ferrous metal stocks, an increase of 0.08 percentage points compared to Q1 2025. In Q2 2025, the top ten heavily held stocks in the A-share non-ferrous metal industry by actively managed equity public funds are Zijin Mining (601899.SH), Shandong Gold (600547.SH), Zhongjin Gold (600489.SH), Hunan Gold (002155.SZ), Yun Aluminum (000807.SZ), Shanjin International, Luoyang Molybdenum (603993.SH), Chifeng Jilong Gold (600988.SH), Huayou Cobalt (603799.SH), and Xingye Silver Tin (000426.SZ); the funds that significantly increased their positions in Q2 2025 include Guangsheng Nonferrous (600259.SH), Haotong Technology (301026.SZ), Xingye Silver Tin (000426.SZ), Hongchuang Holdings (002379.SZ), and Yunlu Co., Ltd. (688190.SH). Risk Warning The risk of the Federal Reserve's interest rate cuts being less than expected; the risk of a significant decline in non-ferrous metal prices; the risk of U.S. tariffs exceeding expectations