Huatai Securities: AI Models Favor Defense and Other Industries Post-Holiday
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Abstract
Huatai Securities' quantitative team reviews the latest performance of its AI-driven rotation models for industries, theme indices and concept indices. As of October 9, 2026, the AI industry rotation model has delivered an annualized return of 27.54% since backtesting began in 2017, with a 28.58% absolute return this year and 35.03% excess return over the same period. For the week after the holiday, the model will hold defense and military industries, steel, rare metals, non-bank financials and consumer services. The full-frequency-band fusion factor remains robust, with the top layer posting a 28.12% annualized excess return; the AI CSI 1000 enhanced portfolio is up 4.98% in excess terms year to date; and the text-based LLM-FADT portfolio beat CSI 500 by 3.1% in October. Theme-index rotation favors CSI Tourism and the High-End Equipment Sub-50 index, while concept-index rotation highlights Wind micro-caps and the pig-farming theme. The team cautions that model outputs do not constitute investment advice and may fail.
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