Must-See "Dividend+" Guide for Beginners, Market Volatility Investment Secrets Revealed

Recently, the A-share market has entered a “volatility mode” again, with the Shanghai Composite Index bouncing around 4,000 points. Hot sectors like semiconductors, new energy, and oil and petrochemicals are rotating rapidly, like opening blind boxes. Don’t panic—today I want to recommend a “calming pill” for a choppy market—the “Dividend+” Index, which even beginners can easily grasp.

Many newcomers hear “Dividend+” and think it’s a complex professional term. Actually, the core is simple: it helps us pick stable, profitable companies that don’t mess around, so you don’t have to spend time choosing stocks—safe and worry-free.

For example, the CSI Dividend Index is known as the “High Dividend Royalty Group,” selecting the top 100 companies with the highest dividends over the past three years. These companies are usually industry leaders with mature, stable operations.

If you’re seeking stability and are worried about market fluctuations, the Low-Volatility Dividend Index is more suitable. It emphasizes high dividends combined with low volatility, offering strong defensive qualities.

The China Securities Free Cash Flow Index focuses on “cash cows” that are not short of money—these companies have enough cash to pay dividends and expand or develop, providing more growth flexibility compared to pure dividend indices.

The China Securities Value 100 is an “all-round player,” scoring companies based on three aspects: reasonable stock prices, high dividends, and ample cash. It offers both a high dividend safety net and growth potential, balancing stability and attack.

Some may ask, what’s the difference among these four indices? Mainly three aspects: industry, valuation, and historical performance.

The CSI Dividend Index favors financial cyclical industries like banks and coal that can provide stable dividends. The Low-Volatility Dividend Index also has nearly half its holdings in banks, earning it the nickname “Small Bank” Index. The Free Cash Flow Index targets industries with abundant cash flow like automotive and oil & petrochemicals. The Value 100 Index is more diversified, with nearly 50% in heavy-asset industries like home appliances, banking, and automotive.

In terms of valuation, the Value 100 Index offers good value, with a dividend yield of 4.9% and a P/E ratio of only 11.4 times—cheap and dividend-paying. The CSI Dividend and Low-Volatility Dividend indices have dividend yields of 4.6% and 4.5%, respectively, with P/E ratios just over 8. times. The Free Cash Flow Index has a slightly lower dividend yield of 3.1% because it retains some cash for expansion, but it outperforms the broader market and has growth potential, with a P/E ratio of about 15.7.

Regarding historical performance, from 2013 to now: the CSI Dividend and Low-Volatility Dividend indices focus on stable, mature companies, so their annualized returns are slightly below 12%. Meanwhile, the Free Cash Flow and Value 100 indices, which consider both growth and dividends, have annualized returns exceeding 18%, making long-term holding very rewarding.

How to invest? E Fund offers four index-linked funds corresponding to these indices: CSI Dividend ETF Connect Fund (A/C/Y: 009051/009052/022925), CSI Low-Volatility Dividend ETF Connect Fund (A/C: 020602/020603), China Securities Free Cash Flow ETF Connect Fund (A/C: 024566/024567), and China Securities Value 100 ETF Connect Fund (A/C: 025497/025498).

If you have a stock account, you can also directly buy the corresponding ETFs: Dividend ETF E Fund (515180), Low-Volatility Dividend ETF E Fund (563020), Free Cash Flow ETF E Fund (159222), and Value ETF E Fund (159263). The operation is very convenient.

Source: ETF Fireline

Risk Reminder: Funds are subject to risks; please invest cautiously.