China Fund News Reporter Ruohui
Fund annual reports are an important window for fund managers to communicate with investors. In recent days, with the intensive appearance of the 2023 fund annual reports, the latest investment views of well-known fund managers such as Zhang Kun, Xie Zhiyu, Huang Hai, Lin Yingrui, and Bao Wuwei have been exposed.
The capital market over the past year has undoubtedly been full of challenges for fund managers. Faced with the complex and ever-changing investment environment, many fund managers have given more stringent consideration to the valuation and business models of listed companies.
For example, Zhang Kun, the fund manager of E Fund, bluntly stated that the "miraculous results" and "black-bone chicken turning into a phoenix" that often occurred in the era of extensive growth in the past will be more difficult to replicate, and fund managers need to use more stringent and detailed standards to evaluate investment targets.
Wanjia Fund Huang Hai clearly pointed out that 2024 may become a turning point year, and investment opportunities will be significantly expanded compared to 2023. Lin Yingrui of
Guangfa Fund even bluntly said that there is no Holy Grail in investment methods. He believes in the cyclical laws of the economy and collective behavior. He also believes that mean reversion based on fundamentals is a high probability event.
Invesco Great Wall Bao Wu said that there are a large number of companies with low RoE and high PB in the current market, and the excessive valuations of these companies will return to reasonable levels in the future.
Xie Zhiyu of Xingzheng Global hopes to continue to explore investment opportunities in the future as technological change accelerates or sub-industry prosperity improves.
E Fund Zhang Kun:
"Strength can produce miracles" and "black-bone chicken turns into a phoenix" will be more difficult to copy
As the largest active equity public fund manager currently under management, Zhang Kun will very carefully prepare the views and content in the fund's regular reports every time. , and use a lot of space to share his latest thinking on investment. His latest views on investment have also attracted investors' attention.
In the latest disclosed E Fund Blue Chip Select 2023 Annual Report, Zhang Kun shared his latest views on the valuation and pricing of listed companies.
He wrote in the annual report that as China's economy enters a stage of high-quality growth, "we believe that while the framework for investing in listed companies remains stable, more stringent standards need to be adopted in some specific aspects."
First of all, it is the company governance. In the era of extensive growth, growth can solve many problems. However, in the era of high-quality growth, inefficient growth is meaningless. We hope that management can allocate the company's capital more carefully, more carefully evaluate the opportunity cost difference between investing in new businesses and helping shareholders increase old businesses, dividends and The importance of buyback write-offs has increased significantly. If management's capabilities are poor, shareholders' capital may be wasted in disguise. As an investor, you need to carefully evaluate management's ability and willingness to reward shareholders. The capital market is an amplifier, whether it is positive or negative, it will amplify it. Zhang Kun believes that as time goes by, the amplification effect will continue to increase.
Second, it is the company’s valuation. Zhang Kun believes that in the era of high-quality development, the company's basic probability of sustained rapid growth is decreasing. Unless the company is in a significant industry trend and has rare competitiveness (but such star companies often have extremely high valuations), we should not overestimate our ability to judge non-consensus sustained high growth. We will carefully consider the valuation level of the company in the illiquid primary market and pay a premium very prudently.
Third, it is the business model of the enterprise. In the era of high-quality growth, the "characteristics" of a company that are unique and difficult to imitate quickly are even more important. All profits and losses of a company come from all decisions in history. Sometimes some extremely important decisions even come from the distant past. Maybe the management who made the decision is no longer in the company, but this decision still continues to play an important role.
The former CEO of Nabisco once joked: "The genius invented Oreo, and we are responsible for inheriting the legacy." Even in the generally fast-changing technology industry, companies are becoming longer-lived, with the world's top 20 largest market capitalizations Among the technology companies, the youngest is Meta, which was established in 2004. Those seemingly "old" giants still maintain their lightness. The top two companies in the world by market value were both established in the 1970s.
In an era of significant increments, a new strategic decision of an enterprise may quickly bring the enterprise to a higher level; but in an era of limited increments, the marginal effect of a new strategic decision will inevitably decline. And when a truly significant incremental trend comes, such as AI (artificial intelligence), and all companies go all out, their resources will become one of the winners.
In this round of AI revolution, people see that technology giants are still leading the way. Their rapid construction of the strongest infrastructure and recruitment of the best talents in the world have become important conditions, and their niche business that can continue to generate cash flow is this The premise of everything. At the same time, this also increases the fault tolerance in business operations.
To sum up, Zhang Kun believes that these changes should be structural. The "miracles with great strength" and "black-bone chicken turning into a phoenix" that often appeared in the era of extensive growth will be more difficult to replicate. Enterprise operations need to be more refined, and we also need to use More stringent and detailed standards to evaluate investment targets. The
annual report also disclosed the "invisible" heavy holdings of E Fund's blue-chip selections. Data shows that as of the end of 2023, the fund's 11th to 20th largest holdings are still consumer and pharmaceutical stocks such as Shanxi Fenjiu, WuXi AppTec, and Yum! White horse leading stocks are the main ones,
Wanjia Fund Huanghai:
2024 may become the year of inflection
Because it has seized investment opportunities in dividend sectors such as coal stocks in recent years, the performance of many funds managed by Wanjia Fund Huanghai has risen to the forefront of the industry. His views on the market outlook are also worthy of investors’ reference.
He said in the 2023 annual report of Wanjia Xinli Fund that looking forward to the macro environment in 2024, we believe that policies in 2024 will still make steady efforts under the multiple goals of stabilizing growth, adjusting structure and preventing risks. The market's influence on the macro economy Expect to experience a process from weak to strong. Overseas, the US fiscal expansion is still continuing, financial conditions remain loose, the risk of secondary inflation is "looming", the arrival of the interest rate cut cycle may be later than market expectations, and major global asset classes may still face certain fluctuations.
Generally speaking, Huang Hai believes that 2024 may become an inflection point year. After the market has experienced the clearance of domestic real estate risks and overseas inflation risks, it is expected to truly start a volatile and upward cycle, and investment opportunities will be significantly expanded compared to 2023.
Looking at the whole year of 2024, Huanghai is still based on absolute returns. Currently, the characteristics of upstream energy stocks with low valuations, high dividends, low debt, and high cash flow are still not fully priced by the market. We will continue to hold heavy positions in high-quality and scarce assets that are both offensive and defensive under the condition that domestic and foreign macroeconomic expectations are gradually stabilizing.
At the same time, Huang Hai will also actively explore investment opportunities brought by some globally priced industrial products with bottom valuations, booming manufacturing industries, and some mass consumption that is expected to exceed expectations. In short, we will take a prudent attitude, actively seize opportunities from market fluctuations, optimize the portfolio structure, and achieve steady growth in net worth.
Wanjia Xinli's "invisible" heavyweight stocks have also appeared, including oil, banking, electronic components, and home furnishing stocks such as CNOOC, Bank of Ningbo, Fii Industrial, and Oppein Home Furnishing.
GF Fund Lin Yingrui:
Mean reversion based on fundamentals is a high-probability event
GF Fund Lin Yingrui has always been unique in his style of non-grouping and contrarian investment. As of March 28, 2024, the GF Ruiyi Fund he manages has led the fund in the past five years. The net value growth is close to 100%, ranking among the top three among similar funds.
In the latest fund annual report, he noticed that the current market is full of negative emotions, and some participants are slowly giving up on taking the initiative to take risks. As in the past, he will not follow what others say, but will continue to think independently. He believes that taking the risk of uncertainty may be a better choice at the moment.
He wrote in the annual report that the market will fluctuate downward in 2023, and the mainstream indexes will all have a certain decline. The value style will outperform the growth style, and the small market capitalization style will continue to dominate. For most of the year, we kept our positions and structure stable.
Most market participants have experienced a change in mentality from full of expectations to refusal to believe, and from positive longing for policy expectations to negative denial of the improvement of actual fundamental data. As the volatility of the economy and market continues to decline, and subjective investor alpha continues to decline, the market is more inclined to increase the pricing weight of "certainty", slowly diluting or even abandoning the original pride of subjective investors. The ability to price uncertainty.
Some participants gradually gave up taking the initiative to take risks and tried to make investments passive and instrumental. This can be explained to a certain extent by the cyclical fluctuations of subjective excess returns: people tend to feel more pain when there is an excess decline, and they tend to reflect more. The more profound.
But the underlying issues are becoming clearer. More people, and even more managers themselves, are beginning to think about: 1. Is there subjective alpha? 2. How big is the scale of alpha? 3. How to pay. Everyone has their own answers to these questions. There is no Holy Grail in investment methods. There are thousands of paths. What we believe in is the cyclical laws of the economy and collective behavior. We believe that mean reversion based on fundamentals is highly probable.
At the current point in time, the economy is at the bottom of the cycle and upward, policy support is strengthening, market valuations are at a relatively bottom area (the valuation of the CSI 300 is at the 10% quantile level in the past five years), and public funds As a whole, excess returns are at minus one standard deviation, and the supply and demand pattern in some subdivisions is clearly improving. Lin Yingrui believes that taking the risk of uncertainty now may result in excellent excess returns in the future.
Among GF Ruiyi’s leading “invisible” heavy holdings, Lin Yingrui chose to hold some banks, catering and tourism, steel, media, retail, education and other stocks.
Invesco Great Wall Bao Wuwu:
The exorbitant valuations of some listed companies will return to reasonable levels
Invesco Great Wall Bao Wuwu is also one of the fund managers who has become famous in recent years. He was relatively concise and to the point in the annual report disclosed this time. , focusing on the overvaluation of some listed companies. Looking forward to the domestic economy,
believes that the economic transformation will continue. The overall valuation of the A-share market is highly differentiated. There are a large number of companies with low RoE and high PB in the current market. We believe that the excessive valuation of these companies will return to a reasonable level.
Bao Wu said that the current positions of this fund are in line with our investment philosophy, have better business models and strong operating barriers, and the current valuation is also in a reasonably low range. We strive to bring benefits to holders to keep giving back.
The "invisible" heavy holdings of the Invesco Great Wall Shanghai-Hong Kong-Shenzhen Select Fund he manages are concentrated in energy, medical and other fields.
Industrial Securities Global Xie Zhiyu:
Explore opportunities in two directions
Industrial Securities Global Xie Zhiyu is known for his balanced investment style. His current management scale is close to 40 billion yuan, and he has always been one of the most watched fund managers in the industry. He stated in the annual reports of Xingquan Herun and Xingquan Heyi funds that in 2024, he will focus on investment opportunities arising from the acceleration of technological change or the improvement of sub-industry prosperity.
He said in the annual report that fiscal and monetary policies will still maintain strong stimulus in 2024 to hedge the macro risks of real estate pressure. After the capital market experienced a volatile decline in early 2024, it is more likely that it will gradually stabilize and recover.
From the perspective of market style, low valuation, high dividends and high attention to the AI sector at the beginning of the year; from the perspective of subdivided sectors, new technologies in AI and semiconductor, communications, and computer sectors have gradually emerged with the internationalization capabilities of my country's mid-to-high-end manufacturing industry, electronics, The total export volume of products in the fields of automobiles, machinery, new energy and other fields has continued to reach new highs in recent years, and the global share of products of leading listed companies has increased. Domestically, we will continue to track the progress of various fields while considering risks, hoping to continue to explore investment opportunities as technological change accelerates or sub-industry prosperity improves.
Xie Zhiyu said that the main goal of this fund is to pursue long-term returns.Try your best to balance the contradiction between short-term stock price fluctuations and the company's long-term investment value, and continue to look for and hold companies with good investment performance-price ratio from a long-term perspective, hoping to obtain stable investment returns.
Xingquan Herun’s “invisible” heavyweight stocks include new energy and semiconductor leaders such as CATL and China Micro.
Editor: Xiaomo
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