In recent market trends, there has been a significant shift towards dividend stocks, marking them as one of the core focal points for long-term investorsThis consensus among market participants, including institutional investors such as insurance companies, highlights a broader strategy in investment practices: not merely waiting for the optimal moment but rather recognizing opportunities as they present themselvesCurrently, many believe we are in an opportune time for investment, particularly in the dividend sector.

The competition for financial resources in the dividend space is palpableAs the year draws to a close, insurance companies have increasingly participated in equity investments, with 17 instances of them purchasing stakes in publicly listed companies since the start of this year alone—a record high since 2021. This activity reflects a growing favoritism towards companies exhibiting strong dividend profiles.

According to research from GuoXin Securities, there's an observable change in the preferences of these insurance investors

They are gradually increasing their equity allocation and maintaining a structural growth in dividend assets, facilitating sustained interest in this sectorThe famous investment saying by Charles Ellis, "When the lightning strikes, you better be there," echoes the sentiment that in volatile markets, most investors cannot avoid losses entirelyHence, seeking refuge in dividend stocks now appears fruitful, with the potential for significant returns.

The two largest dividend-themed exchange-traded funds (ETFs) in the market have also garnered attention, with the Dividend ETF (510880) and the Dividend Low Volatility ETF (512890) surpassing 20 billion and 10 billion in scale, respectivelyThis level of popularity clearly indicates their attractiveness for investors pursuing dividend stocks.

In the past week, notable acquisitions by insurance companies further highlight the growing trend

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China Pacific Insurance has acquired approximately 996,000 shares of COSCO Shipping Energy’s H-shares, bringing its total stake to over 65.3 million shares, equating to a 5.04% ownership stake that triggers mandatory disclosure rulesThis marks the third acquisition by China Pacific Insurance in 2024. Similarly, Xinhua Insurance has raised its shares in Haitong Securities by 4 million to total 171 million, also reflecting a 5.02% stakeThese moves by prominent insurance firms encapsulate a wider trend—insurance companies are favoring those listed firms that demonstrate undervalued stock and attractive dividend returns, essential characteristics for long-term investment stability.

Interestingly, reports from China Merchants Securities indicate that during the first half of the year, there's been a notable increase in the net assets of high-dividend stocks, totaling nearly 100 billion yuan

A trend emerges as these companies have seen consistent investment, with insurance capital increasing their holdings in utility and resource sectors and maintaining high dividend yields.

Projecting forward, it is estimated that insurance firms will classify an additional trillion yuan into dividend assets within the next three yearsLong-term financial planning necessitates a multi-layered approach to asset-liability balances, given the typical payment periods of insurance products and their consistent obligation pressuresAs such, investors increasingly prefer dividend assets characterized by low volatility and steady returns, particularly as current market valuations appear reasonable.

Global investors are also showing confidence in China's dividend assetsFor instance, UBS has expressed optimism about high-dividend stocks and fundamentally-backed growth sectors

Behind the influx of funds into dividend stocks, substantial changes in fiscal policy reflect a supportive backdrop for these investmentsAn announcement from the People’s Bank of China regarding the new SFISF (Securities, Fund, and Insurance Company Swap Facility) allows selected financial institutions to trade collateral for further liquidity, effectively encouraging stock investments using bonds, ETFs, and other instruments as collateral.

From a long-term yield perspective, dividend assets demonstrate resilience against market fluctuationsA comparative analysis of various indices shows significant variabilities, with the CSI 300 Total Return Index registering substantial returns compared to other leading indicesAs fixed-income yields drop, with ten-year government bond rates recently dipping below 2%, this has caused a shift towards high-dividend yielding assets as they promise more substantial returns.

Moreover, promotional policies encouraging stable dividend payouts among public companies reflect a strategic focus on long-term growth and shareholder value

Reports project that 2023 will see cash dividends from A-share companies amounting to over 2.2 trillion yuan, with an increase in the number of dividend-paying firms compared to previous years.

As the market capitalizes on dividend opportunities, the oil-and-gas space is expected to become a hotspot for institutional investmentsThe past month has seen a flurry of activity from over ten fund companies specializing in dividend themes, indicating heightened market enthusiasmHowever, this influx of new funds brings its own challenges, particularly as investors navigate the complex landscape of numerous products vying for their attention.

For investors, selecting the right fund amidst this complexity is paramountNotably, both the Dividend ETF (510880) and the Dividend Low Volatility ETF (512890) track the most popular dividend indices