Middle East Geopolitical Conflicts Fluctuate, "Fund Buyers" Increase A-Share Allocations

Amid persistent Middle East geopolitical conflicts and intensifying market volatility, domestic fund advisory institutions have proactively adjusted their asset allocation directions, making Chinese equity assets a focal point for layout.

Data from Kaitong Securities shows that in March 2026, a total of 179 fund advisory portfolios completed rebalancing operations. Among 11 asset categories, A-shares ranked second in terms of increased allocations, while emerging markets, overseas bonds, currencies, and cash assets faced varying degrees of reductions.

Huaxia Advisory's latest investment report released in April indicates that based on risk premiums over the past five years, the current investment value-to-price ratio for Wind All-A exceeds the historical range of 32.67%. The equity market has retreated from the previously "overvalued" zone into the "neutral" zone. The advisory firm stated that current market sentiment indicators have fallen to low levels, and Chinese equity assets have already priced in the pessimism associated with soaring oil prices. Consequently, the potential for further index declines may be relatively limited.

However, a buy-low signal still requires waiting for A-shares to stabilize following a volume-driven bullish candle, along with a synchronized peak and decline in both oil price volatility and S&P 500 volatility (VIX). Currently, the latter has shown a turning point downward, but the former remains at high levels. (Shanghai Securities News)