Analysis of Dividend Index Fund Investment Strategies and Market Performance

On November 15, 2025, a Xueqiu user published an analysis article on the investment principles of dividend index funds [1], explaining the core logic of dividend strategies maintaining low valuation and high dividend yield characteristics through dynamic position adjustments. This analysis coincided with a critical period of market style switching.

Current market data shows that major A-share indices are rising moderately but with obvious divergence [0]:

• Shanghai Composite Index: 3990.49 points, monthly increase of 1.9%
• Shenzhen Component Index: 13216.03 points, monthly increase of 0.99%
• ChiNext Index: 3111.51 points, monthly increase of 2.44%
• CSI 300: 4628.14 points, monthly increase of 0.21%

: Dividend Low Volatility ETF (512890) recorded net capital inflows in 20 out of 25 trading days since the fourth quarter of 2025, with a cumulative inflow of 4.229 billion yuan during the period, making it the only dividend-themed ETF product with net inflows exceeding 3 billion yuan in the same period [2]. The average daily turnover increased from 418 million yuan to 718 million yuan since the beginning of this year, and the fund’s scale reached 26.402 billion yuan on November 12, hitting a historical high [2].

The market shows an obvious seesaw effect between styles: since October, the Dividend Low Volatility Index has risen by 8.69%, while the STAR 50 Index has fallen by 7.75% [3]. Amid net redemptions for broad-based indices like CSI 300 and CSI 500, dividend-style indices have achieved significant net inflows [3].

shows [4]:

• CSI 300 P/E ratio: 14.28x, at the 76.93% historical quantile
• CSI 300 P/B ratio:1.49x
• CSI300 dividend yield:2.80%

Valuations of other major indices:

• SSE 50:11.95x, at the78.98% historical quantile
• CSI500:33.38x, at the66.92% historical quantile
• ChiNext Index:41.27x, at the36.00% historical quantile

As of November12,2025, the 10-year Treasury yield has declined to1.81%, and there is a 2.19% spread with the 4.00% dividend yield of the underlying index of Dividend Low Volatility ETF. This spread is higher than 51.27% of the time over the past decade [2]. In a low-interest-rate environment, the relative attractiveness of dividend assets has significantly increased.

: At the end of Q3 2025, the position of public funds in bank stocks decreased by2.4% compared to the end of Q2, with banks underweight by7.3 percentage points and non-bank financials underweight by4.1 percentage points [3]. This provides potential space for increasing positions in dividend assets like banks in Q4.

The core logic of dividend strategies mentioned in the Xueqiu user’s article [1]—maintaining low valuation and high dividend yield characteristics through dynamic position adjustments, which aligns with the “margin of safety” and “cigar butt strategy” of value investment—has been verified in the current market environment. The recommended strategies of dollar-cost averaging (DCA) and dividend reinvestment, as well as position optimization based on market valuation, are highly consistent with the current capital flow trends.

1. Valuation Risk
   : The current CSI300 P/E ratio is at a relatively high historical quantile (76.93%), with callback pressure [4]
2. Interest Rate Risk
   : If interest rates rise in the future, it may reduce the relative attractiveness of dividend yields
3. Industry Concentration Risk
   : Dividend indices tend to concentrate in traditional industries like banking and energy, with cyclical risks
4. Value Trap Risk
   : Some high-dividend stocks may face fundamental deterioration risks

1. Style Switching Opportunity
   : The market is switching from growth to value style, and dividend strategies benefit significantly
2. Low Interest Rate Dividend
   : The advantage of dividend yield is more prominent in a low-interest-rate environment
3. Institutional Allocation Space
   : Public funds still have large room to increase positions in dividend assets like banks [3]
4. Compound Growth Potential
   : DCA and dividend reinvestment strategies can fully utilize the compound interest effect [1]

Based on current market data and analysis, dividend index funds have shown strong capital attractiveness in Q4 2025, mainly benefiting from market style switching and relative valuation advantages. The scale of Dividend Low Volatility ETF has hit a historical high [2], and the average daily turnover has increased significantly, indicating increased investor recognition of this strategy.

:

• Adopt phased position building to avoid one-time entry at high levels
• Conduct dynamic position adjustment based on valuation indicators like CSI300 P/B ratio [1]
• Pay attention to dividend reinvestment mechanisms to fully utilize the compound interest effect
• Regularly evaluate the quality of constituent stocks to avoid value traps

:

• Impact of monetary policy changes on risk-free rates
• Earnings stability and dividend sustainability of constituent stocks
• Cyclical fluctuations in market sentiment and risk appetite
• Impact of financial regulation on dividend-weighted stocks like banks

Investors should rationally evaluate the suitability of dividend strategies based on their own risk tolerance and investment objectives, and prepare for long-term allocation.