At the beginning of 2025, dividend low-volatility funds are showing a dismal performanceAs of February 6, these funds have seen a decline of 4.5% since the start of the yearIn contrast, the general market beta, represented by the CSI 300, decreased by only 2.34%, while equity funds, such as a specific fund numbered 885001, have actually risen by 1.89%. This indicates that the situation for holders of dividend low-volatility funds is becoming increasingly challenging, as they are experiencing not only a lack of relative gains but also an absence of absolute returns.

So, what are the reasons behind this decline?

One contributing factor is the "see-saw" effect present in the existing market conditionsWithin a month of trading this year, the daily trading volume of the two markets has fluctuated around 1.3 trillion yuan, indicating a stagnant market.

The arrival of humanoid robots, DeepSeek, and advancements in chip technology below the 5nm threshold have ignited a boom in technology stocksJust yesterday, certain equity funds heavily invested in robotics-related concepts have seen increases of over 40% year-to-dateMeanwhile, tech stocks in the Hong Kong market have risen by over 12%. This shift towards technology is drawing attention away from dividend stocks.

This recent trend can also be traced back to the "dividend bubble" that formed at the end of last year

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On December 25 and 26, many dividend funds experienced rapid price increases, partly due to the Hong Kong market being closed, which allowed for speculative tradingThis surge reflected heightened market sentiment concerning dividend assets at that timeMany articles promoted the investment potential in dividends, citing low interest rates as a key attractionHowever, with government bond yields falling to new lows, dividend funds are now facing a downturn, indicating a significant shift in market dynamics.

So, what should investors do now?

First, ask yourself what kind of profits you are truly seeking.

Investment can yield two types of returns: earnings from the company itself, which includes dividends and return on equity multiplied by the dividend payout ratio, and speculative earnings extracted from trading with othersDividends belong to the former category, while trading and rotation between stocks belong to the latter, a practice commonly pursued by quantitative traders.

There is nothing wrong with making money legally and reasonablyHowever, when choosing an investment approach, one should consider personal strengthsOn January 27, DeepSeek, a quantitative giant with a valuation over a trillion yuan, disrupted the marketAnyone looking to engage in trading and rotation needs to reflect on where their advantages lie.

If the movement was merely driven by interest rates, it might be more beneficial to follow that momentum into technology stocks instead

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The market often operates under such logic: during economic downturns, monetary easing tends to favor tech and small caps.

Secondly, consider the current valuations as reasonable fluctuations.

The hardest years for dividend low-volatility funds were in 2019 and 2021. However, during that time, these funds were quite expensive, having a price-to-book ratio of 1.03 on April 4, 2019, whereas now it stands at 0.78, indicating they are currently about 25% cheaper.

In terms of dividends, the rate back then was around 4.46%, which has improved to over 6% now for dividend low-volatility funds (though these figures only serve as a reference, as these historically used data, and half of the dividend low-volatility funds are bank stocks, which could indicate overvaluation).

Finally, consider making some optimizations.