--- title: "Why can undervalued value stock indices reach historical highs?" type: "News" locale: "en" url: "https://longbridge.com/en/news/281102563.md" description: "The CNI Value 100 Index has achieved an annualized return of over 18% in the past 12 years, reaching a historical high in a highly volatile market. The index has performed excellently, with stable long-term returns, adapting to the full-cycle market environment. Its stock selection logic is based on high free cash flow, high dividend yield, and low price-to-earnings ratio, ensuring resilience and flexibility. Compared to the CSI 300 and the CSI Dividend, this index has excelled in different market environments, demonstrating its ability to navigate through bull and bear markets" datetime: "2026-03-31T01:24:11.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/281102563.md) - [en](https://longbridge.com/en/news/281102563.md) - [zh-HK](https://longbridge.com/zh-HK/news/281102563.md) --- # Why can undervalued value stock indices reach historical highs? The rotation of market hotspots is always fast and frequent, making it quite challenging for investors to accurately grasp the timing. In the process of chasing trends, some have gradually discovered that there is an index in the market worth paying attention to: it has achieved an annualized return of over 18% in the past 12 years and even reached a historical high (March 13, 2026) in the high-volatility market environment since March. This index is the CNI Value 100 Index (980081). **1\. Performance Speaks: Excellent Long-term Returns, Full Cycle Adaptability** When evaluating an index, performance is always the strongest backing. The CNI Value 100 Index stands out not for a sudden surge during a specific period, but for its steady progress and full cycle adaptability, delivering relatively impressive results regardless of whether the market is rising or falling. From a long-term performance perspective, as of March 20, 2026, the annualized return of the CNI Value 100 Total Return Index since 2013 has reached 18.2%, far exceeding the 7.4% of the CSI 300 and 11.5% of the CSI Dividend during the same period. Looking at annual returns, only 2018 saw negative returns, while the maximum drawdown has also been better controlled. **Table: Performance of the CNI Value 100 Index** Note: Data source: Wind, time period from December 31, 2012, to March 20, 2026, using the total return index. In terms of market environment, its "full cycle advantage" is even more pronounced: if we categorize the market environment since the index's base date into bull and bear markets, we can see that, except for extreme bull markets, the CNI Value 100 Index mostly outperforms the CSI Dividend and CSI 300. It exhibits resilience similar to or even stronger than the CSI Dividend in bear markets, and generally has greater elasticity compared to the CSI 300 in bull markets, **clearly demonstrating its ability to navigate through bull and bear cycles.** **Table: Comparison of Index Returns in Different Market Environments** Note: Data source: Wind, time period from December 31, 2012, to March 20, 2026, using the total return index. **2\. Stock Selection Logic: Triple Low Valuation Screening, Balancing Downside Protection and Elasticity** The CNI Value 100 achieves "steady progress and full cycle adaptability" primarily because it never forgets its original intention of "value," avoiding chasing hotspots and speculative concepts. It uses **"high free cash flow rate + high dividend yield + low price-to-earnings ratio" as three low valuation metrics** to filter out quality stocks with more reliable fundamentals and relatively lower prices while retaining the advantage of high dividends. This **stock selection logic can also be simply understood as: specifically choosing companies that "earn a lot (high free cash flow rate), distribute a lot (high dividend yield), and are cheap (low price-to-earnings ratio)."** \*\* **Figure: Valuation Indicators: "Price/Value"** Compared to the pure "high dividend" selection of the CSI Dividend and the pure "high free cash flow" selection of the CNI Free Cash Flow, the CNI Value 100 takes the essence of both, possessing the "stable foundation" of the CSI Dividend and the "profit elasticity" of the free cash flow index, making it a balanced value index with "downside protection + elasticity." **Table: Comparison of Index Return Characteristics** Note: Data source is Wind, from 2012/12/31 to 2026/3/20, using total return index. **III. Flexible Victory: Disciplined Rotation, Not Chasing Hotspots to Earn Big Money** If the logic of selecting stocks based on three layers of undervaluation is the foundation of the CNI Value 100 index, then the **quarterly rebalancing** mechanism that brings disciplined high selling and low buying, along with sector rotation, is the key to its long-term outperformance in the market. Index rebalancing, simply put, means that the index will periodically (usually annually, semi-annually, and quarterly) conduct a qualification review of its constituent stocks, removing those that do not meet the selection criteria while incorporating new qualified targets; essentially, it ensures that the index always aligns with its stock selection logic through disciplined operations. Taking the CNI Value 100 as an example, according to the rebalancing mechanism specified in the index compilation plan, when a constituent stock experiences operational deterioration or **stock price increases** leading to elevated valuations, and no longer meets the "low price-to-earnings ratio + high dividend yield + high free cash flow ratio" three-layer undervaluation selection criteria, it will be removed during the quarterly rebalancing according to the index compilation rules. At the same time, some lower-valued targets will be included, achieving what we often refer to as "high selling and low buying." This "high selling and low buying" is reflected not only in individual stocks but also in sectors: when the stock prices of hot sectors drive valuations to rise rapidly, related targets are likely to be removed in subsequent periodic index rebalancing, gradually reducing sector weight; whereas those undervalued sectors with stock prices still at low levels and improved fundamentals will have a greater opportunity for weight increases in subsequent periodic index rebalancing. Looking at the historical changes in industry distribution of the index, a typical rotation case is the operation of the coal sector: from 2019 to 2020, while the market favored core assets like liquor, the coal sector was overlooked. However, the CNI Value 100 index was able to uncover the potential value of the coal sector through its selection mechanism, thereby increasing its weight in a contrarian manner. Ultimately, when core assets corrected in 2021, the index benefited significantly from the rise of the coal sector; by 2024, as the coal sector rose and valuations increased, its weight in the index naturally decreased through periodic rebalancing, thus reducing the risk brought by subsequent corrections **Figure: Changes in the CNI Value 100 Index by Industry** **Figure: The CNI Value 100 Index's Increase and Decrease in the Coal Sector Reflects "Low Valuation" + "Contrarian Thinking"** Note: Data source is Wind, from 2012/12/31 to 2025/5/27, using total return index. This disciplined passive rotation does not require investors to time the market or adjust their portfolios; the index itself completes the "buy low, sell high" strategy, saving investors time spent monitoring the market and avoiding pitfalls caused by subjective judgment errors and chasing trends. The CNI Value 100 achieving historical highs in a highly volatile market is never a coincidence — it is backed by the hard logic of "low valuation + high dividend + high cash flow," disciplined quarterly adjustments, and a steadfast commitment to value investing. In this "involution" market that chases hot spots and quick profits, it proves with long-term stable returns that avoiding involution and following trends while holding quality value stocks can lead to greater success. If you are also tired of repeatedly falling into pitfalls during hot rotations, you might consider participating in this value investment feast by tracking products related to the CNI Value 100 Index: **Value ETF E Fund (159263)**, along with its feeder funds (Class A: 025497, Class C: 025498), to combat human nature with discipline and to traverse volatility with value, gradually reaping the dividends of time ### Related Stocks - [159391.CN](https://longbridge.com/en/quote/159391.CN.md) - [162509.CN](https://longbridge.com/en/quote/162509.CN.md) - [399371.CN](https://longbridge.com/en/quote/399371.CN.md) - [159263.CN](https://longbridge.com/en/quote/159263.CN.md) ## Related News & Research - [The Seed 100: The best early-stage investors of 2026](https://longbridge.com/en/news/286743225.md) - [3 deeply undervalued stocks you can buy for less than $100 right now](https://longbridge.com/en/news/286802600.md) - [Seven warning signs — and two positives — for the market: BTIG’s Krinsky](https://longbridge.com/en/news/286680781.md) - [3 Dividend Aristocrats Under $100 to Buy and Hold Forever](https://longbridge.com/en/news/286622868.md) - [07:31 ETThe Power Table LIVE Sells Out 2026 Conference, Recognizes Inaugural Power Table 100 Award Winners](https://longbridge.com/en/news/286763273.md)