Absorbed 1.8 billion in a month! The defensive value of Hong Kong stock dividend assets is becoming prominent, with Huaxia's Stock Connect Dividend Low Volatility ETF (159118) as the preferred core holding.

Global capital market volatility is intensifying, with geopolitical risks and high US Treasury yields doubly suppressing market risk appetite, driving funds to shift heavily into defensive assets. Hong Kong dividend stocks, characterized by high dividends and low volatility, stand out for their hedging advantages and have become a key focus for fund allocation. According to Wind data, in July 2026, the net inflow of 30 Hong Kong dividend-themed ETFs exceeded 1.8 billion yuan. In a long-term low-interest-rate environment, Hong Kong dividend assets with stable performance and consistent dividend payouts will continue to attract long-term capital.

The core logic behind funds flocking to this sector lies in attractive dividend yields: the S&P Hong Kong Stock Connect Low Volatility Dividend Index currently offers a dividend yield of 5.18%, significantly outperforming the 1.72% yield of 10-year government bonds, and exceeding the 4.26% dividend level of the CSI Dividend Index. Coupled with the current concentrated dividend distribution period in Hong Kong, the long-term stability and generous cash dividends of constituent stocks will further enhance the allocation value of Hong Kong dividend products.

Huatai's overseas strategy analysis suggests that Middle East geopolitical conflicts, oil prices breaking through $100, and rising expectations for Federal Reserve rate hikes are fueling concerns about market stagflation, making Hong Kong dividend stocks a high-quality core holding in volatile markets. After a previous rally, Hong Kong stocks entered a consolidation phase. Current market sentiment has returned to neutral, with trading fluctuations from southbound capital, foreign investors, and short-selling positions narrowing. Fund rebalancing has temporarily stalled, waiting for new positive catalysts. Hong Kong stocks are now at a critical juncture; hedging and closing operations are nearing completion, and correlation with overseas markets has decreased. However, fundamentals have not sustained the momentum, leaving limited room for earnings upgrades. With interim report disclosures approaching, market uncertainty remains. Given the comprehensive market environment, institutions recommend balanced allocation, using low-volatility Hong Kong dividend assets as a foundation to hedge against market volatility.

The Huaxia Stock Connect Dividend Low Volatility ETF (159118) closely tracks the S&P Hong Kong Stock Connect Low Volatility Dividend Index, anchoring on defensive sectors such as utilities and telecommunications. It boasts management fees of 0.15% and custody fees of 0.05%, among the lowest in the industry, and supports T+0 round-trip trading. As of 13:47, the Huaxia Stock Connect Dividend Low Volatility ETF (159118) fell 0.51%, with a latest quote of 0.978 yuan.