Qiaoshui fund reduces its holdings in emerging market ETF and continues to increase its positions in China ETF

category:Finance
 Qiaoshui fund reduces its holdings in emerging market ETF and continues to increase its positions in China ETF


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As of September 30, the market value of U.S. listed stocks and ETFs in the funds portfolio was US $11.382 billion, compared with us $12.751 billion at the end of the second quarter and US $16.325 billion in the first quarter.

It is worth noting that the CSRC only requires institutional investors to submit long position data in the United States, so the position report cannot accurately reflect the investment tendency of institutions. In addition, the market value change shown in the position report is the result of the joint action of stock price change and increase / decrease holding. It is difficult to distinguish which factor is the dominant factor from the position report alone.

The official asset management scale of qiaoshui fund is more than 160 billion US dollars. It manages assets for 350 institutional clients, including sovereign funds, pension funds, charitable foundations, etc.

According to the position report submitted by qiaoshui fund, the position of US stocks in the third quarter was relatively concentrated, with the top ten positions accounting for more than 66.28%. Among them, the first and fourth positions are ETFs tracking the S & P 500; the second, third and seventh positions are ETFs tracking the emerging market index; the fifth position is a gold trust; the sixth position is a Brazilian ETF; the eighth, ninth and tenth positions are bond ETFs. An important change is that the ETF tracking the S & P 500 surpassed the Emerging Market Index ETF, becoming its first position in the third quarter.

Substantial reduction in emerging market ETFs

The report shows that in the third quarter, qiaoshui fund significantly reduced its position in emerging market ETFs. Among them, pioneer pilot FTSE Russell emerging market ETF was reduced by 21%, ASUS core MSCI Emerging Market ETF was reduced by 25%, ASUS MSCI Emerging Market ETF was reduced by 51%.

In the past few quarters, the bridge water fund has been high-profile in many emerging markets. As evidenced by positions: in the second quarter, the first position of qiaoshui fund was the pioneer FTSE Russell emerging market ETF, while in the third quarter, its first and second positions were exchanged.

Industry insiders believe that this may be related to its previous miscalculation. Prior to that, Rui Dario, founder of Bridgewater fund, repeatedly spoke highly of emerging markets, believing that emerging markets are the natural choice to disperse the risk of US stocks. However, this time, the judgment of the bridge water fund seems to be inaccurate. In April 2019, qiaoshui Fund issued a research report that the US stock market would fall by 40%, while the fact is that the S & P 500 index rose by more than 25% from January 1 to November 13, 2019.

One of the important reasons is that the monetary policy of the Federal Reserve has changed. On August 1, 2019, the Federal Reserve started to cut interest rates again 10 years later, from the cycle of interest rate increase to the cycle of interest rate reduction, which lengthened the bull tail of US stocks. The U.S. economy has not turned as fast as qiaoshui predicted. The U.S. economic fundamentals are still resilient, and the U.S. dollar has remained relatively strong. These factors undoubtedly put some pressure on emerging markets. Therefore, qiaoshui fund sharply reduced its holdings in emerging markets in the third quarter. In terms of market value, the top three positions of its holdings in the first three quarters were all ETFs in emerging markets.

Two Chinese ETFs

In the third quarter, qiaoshui fund continued to increase its positions in two Chinese ETFs after buying them in the second quarter.

It is understood that the two ETFs purchased by qiaoshui fund are anshore China market ETF (FXI) and anshore MSCI China ETF (mchi), which are the largest listed and most liquid ETFs in China in the United States. Mchi can fully capture the incremental capital brought by MSCIs incorporation into A-share. In the third quarter, qiaoshui increased its positions in both ETFs by 20%. So far, however, the two ETFs account for less than 1% of Bridgewaters US equity positions. Among the Chinese stocks listed in the US, qiaoshui slightly increased its positions in Alibaba and Baidu, and reduced its holdings in Jingdong. I think there are different problems in the global market, Dario said in an interview with Jim Haskell, senior portfolio strategist at Bridgewater on August 7. The real danger is not to spread the risk in the current situation. To spread the risk, you need to enter the Chinese market. Although there are risks in entering, I think the risk of the latter is greater by weighing the two options of entering and not entering. Source: editor in charge of China Securities News: Ren Hui, nbj9607

It is understood that the two ETFs purchased by qiaoshui fund are anshore China market ETF (FXI) and anshore MSCI China ETF (mchi), which are the largest listed and most liquid ETFs in China in the United States. Mchi can fully capture the incremental capital brought by MSCIs incorporation into A-share. In the third quarter, qiaoshui increased its positions in both ETFs by 20%. So far, however, the two ETFs account for less than 1% of Bridgewaters US equity positions. Among the Chinese stocks listed in the US, qiaoshui slightly increased its positions in Alibaba and Baidu, and reduced its holdings in Jingdong.

I think there are different problems in the global market, Dario said in an interview with Jim Haskell, senior portfolio strategist at Bridgewater on August 7. The real danger is not to spread the risk in the current situation. To spread the risk, you need to enter the Chinese market. Although there are risks in entering, I think the risk of the latter is greater by weighing the two options of entering and not entering.