In March 2026, global capital markets experienced sharp swings under the combined impact of geopolitical conflict, energy price volatility, and ongoing change across the AI industry. As tensions in the Middle East escalated, risk appetite declined quickly and capital shifted temporarily toward defensive assets, putting visible pressure on part of the growth complex. In our view, the near-term turbulence was driven mainly by liquidity shocks and a contraction in risk appetite triggered by sudden events, rather than by any systemic deterioration in the long-term fundamentals of quality businesses.
Over a longer horizon, geopolitical conflict affects not only short-term asset pricing but may also accelerate changes in global industrial policy, energy security, and supply chain positioning. Markets are likely to place increasing value on diversified asset allocation as well as on companies' competitiveness and cash flow quality in uncertain environments. For Chinese assets, areas tied to industrial security, technology upgrading, and resilient domestic demand may still show meaningful long-term appeal.
At the industry level, AI remains one of the most important structural themes. China's large-model ecosystem and AI applications are evolving rapidly, with commercialization expanding from model training into AI-assisted coding, enterprise services, and intelligent agents. As demand grows, computing infrastructure improves, and cost advantages become more visible, value creation across the AI chain is shifting from isolated technical breakthroughs toward competition in application ecosystems and monetization capability.
In healthcare, the internationalization of Chinese innovative drugs and the validation of clinical data continue to progress. Although the sector has been affected in the short term by market sentiment and liquidity disruption, the broader industry trend remains intact. We will continue to assess related opportunities by focusing on companies' long-term competitiveness, the execution of R&D pipelines, and global commercialization potential. Overall, the fund will remain grounded in industry fundamentals and seek long-term value where short-term sentiment has created dislocations.
Risk disclosure: Market fluctuations may cause investment outcomes to vary. Investors should make rational decisions based on their own risk tolerance. This article is for general information only and does not constitute investment advice, an offer, or a solicitation. Past performance is not indicative of future results.