If you could only choose one valuation metric, which one would stand out?
Buffett gave the answer return on net assets , which is ROE. Why is the
ROE indicator favored by Buffett? The reason is that this indicator directly skips the phenomenon and looks at the essence. It directly tells investors how much net profit can get for every dollar invested. In other words, it is to measure the ability of listed companies to make money by relying on hard power without using leverage and .
Since this indicator has been approved by the "Stock God", as a basic citizen, we can use ROE as the core indicator, find positions high ROE stocks higher funds , look at these funds What is the company's performance and risk control capabilities?
has no right to speak without data. This time we will use the data to back test to see if the high ROE indicator of is really that effective.
Can the performance of "high ROE funds" be comparable to that of "stock gods"?
takes high ROE stock holdings as the core indicator, and we set the screening conditions as follows:
counts the average ROE levels of the top 10 heavily held stocks of all active funds in the past five years, and screens out the funds whose ROE levels rank in the top 20% every year.
After setting the screening conditions, we found 51 that met the conditions among more than 1,700 active equity funds, and formed a list of high ROE holding funds .
Before announcing the list, let's take a look at the performance and resilience of this combination.
First, simulate these 51 funds into a portfolio, and backtest the overall performance. According to
statistics, in the past five years, the yield of 51 high ROE holdings fund index was 93.75%, and the annualized yield was 14.13%. (data as of July 19, 2022)
(data as of July 19, 2022)
Judging from this result, the performance of 's high ROE index fund portfolio is still 20% behind Buffett's performance. This may be due to the impact of too many funds.
Next, we use the maximum drawdown as the core indicator to measure the resilience of this high ROE holding fund.
Statistics show that although these 51 funds with high ROE holdings have good earning power, their drawdown control ability is not strong, and the maximum drawdown in the past five years is -37.41%.
Judging from this data, although it outperformed the Shanghai and Shenzhen 300, funds with high ROE positions do not seem to have outstanding performance in the retracement.
Considering that the average deviation of the 51 funds is relatively large, we narrowed down the scope, respectively find the fund with the best drawdown control and the fund with the best performance in the past 5 years, and then compare their performance with Buffett’s performance compare to.
Statistics show that among the 51 "high ROE" funds, only two of The maximum drawdown of only funds is less than 30% , among which the best drawdown control is Harvest return flexible allocation , the maximum drawdown of is -29.27%, and the annualized return is 21.32%. From the perspective of performance, it is slightly higher than 20% of "Buffett's annualized income".
(data source CHOICE, as of 2022.6.30)
and then screened from the performance indicators, ranks first in the annualized rate of return in the past 5 years, which is JPMorgan , which is close to the 30% annualized return of Excellent Manufacturing, with an annualized return The rate has greatly outperformed the "golden line" with an annualized rate of 20%. At the same time, the drawdown control of this fund ranks among the top 10 among high ROE holding funds. It can be said that China Investment Morgan Excellence Manufacturing A has the best holding experience among the " Buffett Index " funds.
(data source CHOICE, as of 2022.6.30)
Finally, the list of the top 10 "Buffett Index" funds with retracement control and annualized return is for your reference. Get the full list of 51 funds.
(data source CHOICE, as of 2022.6.30)
To sum up, from the list above, we can see that after using the ROE indicator for screening, the annualized returns of most funds are relatively high, z Buffett11zz Deceive me: High ROE stocks do have a high probability of bringing higher returns to the fund.
However, a high ROE does not make the drawdown of the portfolio lower. In , Buffett’s investment resume has several experiences where the drawdown is above 50%. If you pursue a lower drawdown, then a high ROE indicator is not for you "Life-saving straw", it would be better to choose investment products with lower volatility such as bond funds.
After checking the list of high ROE funds, will continue to give you a detailed introduction to the two funds that have been excavated. If you are interested in these two funds, you can continue to read.
防守之盾与攻击之矛
高ROE持仓基金中的招牌
1.防守之盾——嘉实回报灵活配置
该基金现由嘉实消费名将常蓁掌舵。
In fact, stocks that can achieve long-term high ROE are usually industry leaders in various long-slope thick snow tracks, and many of them are leading consumers. Women naturally love to "consume". When work is combined with interests, a wonderful chemical reaction is produced, that is, female fund managers seem to be more likely to shine in the consumption track, such as Wang Yuanyuan from Fuguo , Chen Yuan from Huaan, Yin Zhang Ping from Hua and Chang Zhen who will be talking about this time.
Chang Zhen once said, "Whether it is the United States, Japan, or China, half of the companies with the best performance over the past 15 or 20 years are consumer goods, and consumer goods themselves are the golden track for medium and long-term investment. It is also the field of our key layout ".
Chang Zhen, who has 16 years of experience in securities and , has accumulated her own set of investment methodology in several rounds of bull and bear market experience, which can be summed up in one sentence-"Define z11 by industry trendsz Good industry , define good business by business model, define good company by enterprise moat ".
In terms of flexible allocation of Harvest returns, Chang Zhen has been managing for more than 7 years. The fund has a long-term heavy position in food and beverages. The proportion of the industry usually accounts for about 40% of the net value of the fund , and the industry is relatively concentrated. ability to grasp investment opportunities in industry trends. For example, as early as the beginning of 2020, Chang Zhen took out 20% of positions to lay out new energy track. Flexible return configurationThe scale is less than 700 million, with flexible operation and more ways to increase returns, which can better demonstrate the ability of fund managers to obtain excess returns. Li Dehui, who is known as 's "stable growth stock hunter", is at the helm of . How does
obtain enough excess returns on the high-growth track? One way is to find the growth stocks with the highest ceiling and endure the fluctuations in the process; The method is to slowly accumulate income in the growth track with the prudence of a value investor. The old man believes that Li Dehui is taking the second method.
Compared with Chang Zhen’s investment style, Li Dehui’s industry allocation is more dispersed , the proportion of the largest industry usually does not exceed 25%, in order to combat the high volatility of the growth track.
In addition, the low correlation between industry allocations is also an effective measure to build a fund defense line. In addition to long-term allocation of electronic , electric equipment , medicine and biology , military industry and other industries with prominent growth, Li Dehui will also take into account the market conditions in the short and medium term, and his style spans growth and value as a buffer against market fluctuations For example, in the second half of last year, the financial field began.
(data source fund regular report, as of 2021.12.31)z 2z
Li Dehui once said that he is a growth stock investor with cyclical thinking. Every major switch in market style comes from macroeconomic fluctuations. And to truly understand the cycle, the blind spot for the macro is relatively small, knowing which things are going up and which are going down. This helps control the overall volatility of the portfolio.
Currently, China International Investment Morgan Excellence Manufacturing A has a scale of less than 1.5 billion, which is also a small-scale treasure fund.
Risk reminder: Fund investment is risky, and investment needs to be cautious. Any opinions, analysis and forecasts in this article are for reference only and do not constitute any form of investment advice to readers.
