Amid this landscape, substantial capital has begun to flow out of the U.S. market in search of new investment avenues. The Hong Kong stock market, with its myriad advantages, has attracted the attention of investors worldwide. On one hand, the overall valuation of the Hong Kong market remains relatively low compared to its U.S. counterparts, particularly in the technology sector where key valuation metrics such as P/E and P/B ratios favor Hong Kong tech stocks. For example, Alibaba's valuation in Hong Kong is significantly lower compared to similar tech giants listed in the U.S. On the other hand, Hong Kong is currently experiencing a technical bull market with a distinct upward trend, characterized by growing investor confidence. Additionally, China's rapid advancements in artificial intelligence are providing a powerful impetus for the technology sector within the Hong Kong market.

As AI technology continues to advance in China and its applications become increasingly varied, AI-related companies in Hong Kong are poised to capture significant growth, further drawing the attention of foreign capital. According to international capital flow patterns, markets that exhibit undervaluation, growth potential, and favorable trends tend to become hotspots for global investment. Looking ahead, we can anticipate a continued influx of funds into Hong Kong stocks, which will likely elevate stock prices further. A similar scenario unfolded from 2016 to 2017 when Hong Kong drew considerable overseas capital amid a global economic recovery and its own valuation merits, culminating in a substantial rise of the Hang Seng Index.

Reflecting on the U.S. stock market, the Nasdaq Index has served as the epicenter for technology stocks in recent years, with seven major tech titans—Apple, Microsoft, Amazon, Google, Nvidia, Tesla, and Meta—playing pivotal roles in driving the entire U.S. market upward. In an environment characterized by capital mobility, the Matthew Effect becomes increasingly pronounced, where the strong continue to gain strength. The Hong Kong market shares several similarities with the U.S. market, and by concentrating investments on leading companies, investors often achieve superior returns.

One such promising investment vehicle is the Hong Kong Technology 50 ETF (159750), which is highly concentrated in leading tech companies and encompasses the “tech titans” that have recently captured significant market attention. These dominant players boast considerable advantages in technological innovation, market share, and brand recognition, enabling them to thrive amidst fierce competition and achieve sustained growth. Taking Tencent as an illustration, this leader among Hong Kong’s tech firms leads in areas such as social media, gaming, and fintech, and its robust technological capabilities and vast user base provide a solid foundation for ongoing profitability.

For investors, apprehensions regarding the apparent overvaluation of the Hong Kong Technology 50 ETF (159750) and concerns about “standing watch at high positions” can be alleviated through a disciplined strategy of dollar-cost averaging or strategic entry points after corrections. From an investment perspective, dollar-cost averaging effectively mitigates the impact of market volatility on portfolio returns. While short-term fluctuations might present challenges related to higher entry costs, a sustained investment strategy shows promising potential for long-term capital growth. For instance, investors who employed a dollar-cost averaging strategy with the S&P 500 index over the past decade, despite navigating several market fluctuations, ultimately realized substantial returns.