--- title: "With stock market fluctuations and inflation, can dividend ETFs break the deadlock?" type: "News" locale: "en" url: "https://longbridge.com/en/news/281461633.md" description: "Recently, the A-share market has been volatile, oil prices are rising, and both PPI and CPI continue to rebound. Dividend assets have become the preferred choice for hedging against inflation and obtaining stable returns. Dividend assets are characterized by stable earnings and abundant cash flow, making them suitable for benefiting during inflationary cycles. The CSI Dividend Index and the CSI Dividend Low Volatility Index are investment tools worth paying attention to; the former focuses on high-dividend companies, while the latter emphasizes defensive attributes, making it suitable for investors in a volatile market" datetime: "2026-04-02T03:49:07.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/281461633.md) - [en](https://longbridge.com/en/news/281461633.md) - [zh-HK](https://longbridge.com/zh-HK/news/281461633.md) --- # With stock market fluctuations and inflation, can dividend ETFs break the deadlock? Recently, the A-share market has been volatile, with domestic and international oil prices rising simultaneously, and both the PPI and CPI indices continuing to rebound, forming a differentiated pattern of "asset pressure and rising prices." Against this backdrop, dividend assets, with their unique advantages, have become the preferred choice for investors to hedge against inflation and obtain stable returns. **From the "Rental" Metaphor to Allocation Advantages: Understanding the Investment Logic of Dividend Assets** Dividend assets are often referred to as "rental-type" assets, mainly because these assets generally possess stable profitability, abundant cash flow, and a willingness to return cash dividends to shareholders—cash dividends issued by companies are akin to the "rent" received periodically. From an allocation logic perspective, these assets have two core advantages: First, they have a prominent inflation benefit attribute. The companies corresponding to dividend assets are largely distributed in cyclical industries such as upstream resource products, traditional manufacturing, and large finance. When the macro economy enters an inflation cycle, the prices of commodities and physical assets rise, and these companies, which are positioned upstream in the industrial chain or possess strong pricing power, can directly benefit from the increase in product prices, thereby driving rapid recovery in corporate profits and stock prices. Second, they have stable and sustainable cash flow. During periods of market volatility, the uncertainty of capital gains increases, while the high dividend yield characteristic of dividend assets can provide additional yield compensation. Abundant free cash flow is the foundation for these companies to continue paying dividends, and continuous dividend payouts act like ammunition supplies, helping investors smooth out account fluctuations. **How to Allocate "Rental-Type" Dividend Assets?** In the A-share market, there are two types of indices that align with the characteristics of the aforementioned "rental-type" dividend assets, which are worth focusing on. **The first type is** dividend indices. For example, the CSI Dividend Index is a classic representative of high-dividend assets in the A-share market, with its screening logic primarily focusing on companies with stable historical dividends and high dividend yields, mainly in the financial and cyclical sectors, such as banking, coal, and transportation; as well as the CSI Dividend Low Volatility Index, which incorporates low volatility factors, highlighting defensive attributes, with a foundation in banking and a balanced allocation in cyclical industries like coal and transportation. In the context of rising inflation, energy sectors like coal directly benefit from the increase in commodity prices, with strong profit growth momentum; industries such as transportation and banking provide stable cash flow and dividends, making them excellent targets for defensive counterattacks in a volatile market. Corresponding to investment tools, the dividend ETFs on the market, E Fund (515180, linked funds A/C/Y: 009051/009052/022925) and E Fund Dividend Low Volatility ETF (563020, linked funds A/C: 020602/020603), both have a low management fee rate of 0.15% per year. **The second type is** "Dividend +" indices, represented by value and cash flow. If the dividend index is a relatively pure high-dividend defense, then the "Dividend +" index adds some offensive elements while maintaining defense. For example, the National Securities Free Cash Flow Index focuses on companies with high cash flow generation capabilities, covering core inflation beneficiary sectors such as oil and petrochemicals and non-ferrous metals, with a strong offensive nature, capable of capturing structural returns while resisting inflation; there is also the National Securities Value 100 Index, which, in addition to high dividends, further incorporates low price-to-earnings ratios and high cash flow ratios, retaining the high dividend "rental" attribute while demonstrating stronger offensive elasticity than pure dividend indices during economic recovery The Free Cash Flow ETF E Fund (159222, Connected Fund A/C: 024566/024567) and the Value ETF E Fund (159263, Connected Fund A/C: 025497/025498) provide diversified options for allocating these two "Dividend +" indices. Currently, the core demand for asset allocation has quietly shifted towards "stable risk resistance." It may be worth considering using Dividend ETFs and Low Volatility Dividend ETFs as defensive core holdings, paired with the offensive and defensive Free Cash Flow ETF and Value ETF, to tackle inflation and market volatility with a combination strategy. 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