Huang Feng, fund manager of Haifutong fund company
Wang Keyu, investment and research director of Hongde fund
Fourth quarter style rebalance, adhere to the strategy of selecting individual stocks
Yu Guang, general manager assistant of Jingshun Great Wall Fund
The short-term macroeconomic operation data will continue to improve marginally. At the same time, the effective control of the epidemic situation will also promote the recovery of corporate profits. Overseas outbreaks have repeatedly brought potential risks to the economic recovery momentum of the United States and Europe. External interference is still concentrated. It will take time for investors in the short-term A-share market to recover their risk preference, but the space for further adjustment is relatively limited, and there is a bargain hunting layout in the volatile market The opportunity.
Fundamentals will become an important driving force of stock investment returns, and the strategy of selecting individual stocks is expected to obtain better excess returns. In terms of style, considering that the local market valuation pressure has been alleviated in the process of adjustment and the valuation differentiation among industries has converged, it is expected that style rebalancing will still be the main theme of the market in the fourth quarter.
Domestic economy repair, overseas maintain loose
The published economic data show that the domestic real economy continues to rise steadily, and most of the major economic indicators are expected to continue to improve. With the policy effect, the endogenous driving force of the economy itself has begun to improve, the interest rate center has risen, and the monetary policy is gradually moving from relatively loose to normal. In addition, strict supervision on illegal entry of credit funds into the market, the implementation of the registration system for gem, and the acceleration of IPO pace in the future may also affect the supply and demand of funds in the stock market, which will restrict the expansion of stock market valuation.
The European epidemic situation has accelerated, the British government has issued a new round of restrictive measures, and the market is worried that economic activities may be suspended; the US general election is approaching, and Sino US relations continue to be tense, including the ban on Huawei, tiktok, wechat, SMIC, etc., which make the market worry about the potential uncertainty in the follow-up, and multiple internal and external factors such as profit taking of the board with large increase and high valuation are added Investors risk preference is suppressed to a certain extent. In the short term, A-share still needs to continue to digest the internal and external disturbances. However, considering the liquidity and profitability, the market has relatively limited room for further adjustment. There are opportunities for bargain hunting in the volatile market. Fundamentals will become an important driving force for stock investment returns. The strategy of selecting individual stocks is expected to obtain better excess returns.
The effective control of domestic epidemic situation promotes the continuous recovery of enterprise profits. Judging from the cumulative year-on-year growth rate of the profits of Industrial Enterprises above Designated Size, it has continued to rebound significantly in the near future, and the enterprise profits continue to repair. The relative performance trend of the pro cyclical sector is superior, which is also reflected in the disclosed interim performance; the advantage of low valuation superimposed has become a new breakthrough in the market in the near future. In addition, from the performance of the interim report, the performance of leading stocks in various sectors is still outstanding, which continues to support a small number of high-quality blue chip structural bull market.
Market valuation differentiation has converged and style rebalancing may continue. The market has been in a range of volatility recently. The tightening of liquidity margin has impacted the high valuation sector, and the pressure of profit realization has also brought some pressure on the plate with concentrated institutional positions. The trend of most science and technology sectors is weak, while the consumer sector is differentiated. Liquor and condiments are still relatively strong. Some pro cyclical plates such as building materials and chemical industry have begun to strengthen, and the film and television and aviation industries that have been suppressed by the epidemic situation have begun to strengthen Transportation and other plates also began to be repaired.
In the fourth quarter, the investment direction closely follows the main line of economic recovery. In the short term, it is based on the cyclical logic of undervalued value. In the medium term, it takes into account the background of large cycle. It absorbs high-quality leaders representing the trend of consumption upgrading and industrial upgrading. In the adjustment, the layout is reasonable, and the direction of prosperity is upward.
In terms of concrete operation, we should grasp the main line of economic recovery. As the economy turns from deflation to fundamental recovery, the expectation of Pro cyclical variety fundamental repair is stronger and stronger. At the same time, we should grasp the market style rebalancing, especially pay attention to the calendar effect of the fourth quarter. The market has partially shifted to undervalued sectors, especially those with relatively low valuations and improved profit margins.
Looking back on the market performance over the past years, when the market is not pessimistic about the economic expectations of the next year, it is easy to switch valuations of undervalued blue chips in the fourth quarter of each year. Typical sectors such as banks, cement, insurance, white electricity, etc. In the medium term, taking into account the background of the big cycle, taking advantage of low price represents the high-quality leader of consumption upgrading and industrial upgrading; for pharmaceutical, science and technology sectors with relatively high valuation, it is the stage of valuation digestion, but the long-term growth and configuration value are still optimistic.
At the same time, the gradual recovery of the global economy, moderate inflation, relatively loose liquidity and the gradual weakening of the US dollar have all contributed to the strength of the Hong Kong stock market. For companies with the same industry attribute and industry status, Hong Kong shares have obvious advantages in valuation. Compared with the valuations of major indexes in the global market, the valuation of Hong Kong shares is relatively low. Considering that the ah share premium index has been maintained at a high level and is gradually approaching the new high in the past five years, there are many investment targets in Hong Kong stocks whose valuations are below the average value and have a large discount compared with a shares.
The continuous influx of funds from the south, the gradual return of overseas funds, liquidity is good for Hong Kong stocks. With the introduction of Hong Kong stock exchange, the original capital structure has been changed. The proportion of southward funds in Hong Kongs overall trading volume has increased from 1.5% in the initial stage of the Shanghai Hong Kong stock connect to about 20%, which contributes to the new transactions in the Hong Kong market marginally.
Since Q3 in 2019, the fund of going south has continued to increase its holdings of Hong Kong stocks, and overseas funds have also seen obvious signs of backflow. Hong Kong stocks have received more and more attention and recognition from funds. However, with the gradual rebound of US stocks to the pre epidemic level, global capital will be re allocated. At the same time, a large number of China capital stocks will be re listed in Hong Kong stocks, which will improve the structure of Hong Kong stocks, and more active funds will be willing to participate in the Hong Kong stock market.
In addition, Chinas emerging industry companies are actively listing in Hong Kong stock market, and China capital stock will return to Hong Kong stock secondary listing in the future, which almost includes the best leading companies in Chinas emerging industries. It is expected to optimize the structure of Hong Kong stock market, make Hong Kong stock more growth oriented, and increase the attractiveness of capital with different investment attributes in the world.
On the whole, the Hong Kong stock market is full of scarce high-quality investment targets in the A-share market. In terms of direction, we can focus on industry leaders with valuation advantages and over undervalued sectors such as big banks. Under the background of economic recovery, the downward space is relatively limited, so we can seize the opportunity of excess return.
(the author is assistant general manager of Jingshun Great Wall Fund and director of stock investment department)
The fourth quarter is not pessimistic about the equity market
Wang Jing, assistant general manager of China Merchants Fund
In the coming quarter, the change of the market depends on the liquidity factors and the performance changes of listed companies, and the market is expected to move up the market driven by performance.
In terms of specific rhythm, the U.S. general election will become an important watershed of asset price performance. Before the election, both China and the US stock markets will be in a weak period of high volatility. However, after the election, with the elimination of policy uncertainty, the acceleration of the introduction of vaccines and the implementation of the new financial rescue bill, the global economy is expected to usher in a relatively strong resonance recovery period, driving the current undervalued smooth Cycle varieties rose.
From the perspective of economic fundamentals, in the fourth quarter, the domestic economy is in the process of accelerating repair on the demand side. Overseas, affected by the second recurrence of the epidemic situation and the obstruction of the negotiation of fiscal stimulus bill, the improvement of employment and residents consumption has been tested, but the vaccine and the implementation of the general election will be positive factors. At present, the domestic epidemic situation is basically stable, and there is a risk of secondary outbreaks of new overseas cases in the near future. However, we believe that in view of the relatively sufficient medical resources and the younger population, the probability of large-scale blockade in the second quarter is expected to be low.
Recent economic data show that the domestic and foreign economy continues to be in the stage of rapid recovery, in which the domestic zero growth rate in August turned positive for the first time since this year, while the real estate boom continued to rise thanks to liquidity support. The real estate industry chain and the automobile industry performed well, and the growth rate of investment in manufacturing industry also improved significantly in August. On the whole, it is expected that the year-on-year growth rate of domestic economy in the fourth quarter will continue to return to the potential growth center, and it is expected to record positive growth in the whole year. In addition, in the fourth quarter, we need to focus on the impact of the US election on market sentiment, and the progress of vaccine research and development should be closely followed.
From the perspective of fiscal policy, the recent intensive issuance of local bonds will help infrastructure investment in the fourth quarter, and the construction of major infrastructure projects will continue to accelerate. Overseas, in view of the recent good recovery of employment and economy in the United States, the urgency of the withdrawal of the new fiscal policy has declined, which also gives the two parties more room for policy mediation. We expect that the probability of the implementation of the new stimulus policy before the general election has been significantly reduced. However, after the election, the two parties still have a consensus on the new fiscal backing plan. Of course, the final scale will be determined by the election results influence.
We expect that in the fourth quarter, as the macro-economy turns into a deep recovery, the market style rebalancing and re inflation trading are expected to develop in depth, and the relatively stagflation and low valuation varieties in the early stage will be the better investment choice. From the matching of valuation and prosperity, with the downward trend of overvalued varieties in recent years, the phenomenon of valuation differentiation among sectors has converged, but on the whole, there is still a significant gap between the valuation quantile of value and growth style. We will focus on the broad credit stage, midstream manufacturing industry with bottom to top PPI, producer services, and opportunities for new cyclical industries.
Brief introduction to the author: Wang Jing, master of economics, has 17 years of investment research experience. He joined China Merchants Fund in August 2010. He is now assistant to the general manager of China Merchants Fund, director of investment management department I and member of investment decision-making committee.
Chen Yuan, manager of Huaan ecological priority and Huaan quality life fund
2020 will be a difficult year for the whole world. The black swan incident that follows is beyond the recognition of most people, and makes all our predictions seem weak. At the end of last year, our outlook on the capital market was relatively cautious. After the sharp rise in 2019, the market valuation center has risen significantly. Especially in the context of the global 40 year low interest rate, we are conservative about the liquidity environment in 2020. We are worried about the decline of valuation. However, the sudden outbreak of the epidemic has not only brought about economic shocks, but also brought about the over expected easing of global liquidity, which has promoted the rise of various asset prices.
Due to the extremely scarce certainty of economic downturn and growth, the market has given a high deterministic valuation premium. The gap between the historical quantile of the overvalued sector and the undervalued sector has widened to the highest level in the past three years. With the effective control of domestic epidemic situation, we have observed signs of economic recovery at the meso and micro levels, which have been gradually verified in the macro monthly data. In this process, the target damaged by the epidemic situation in the early stage has gained more market attention because of its more cost-effective valuation and gradual improvement of fundamentals as the epidemic subsides. This logic provides the vast majority of excess return targets in the second half of the period from consumption and medicine deduction to cycle.
Standing at todays time point, on the one hand, we can see that not only the export and investment recovery, but also the consumer sector, which has been hit the most by the economy, achieved positive growth in August, and the speed of economic improvement is better than expected; on the other hand, the margin of liquidity is no longer loose, and the long-term and short-term interest rates have risen, which is necessary for the varieties that have been upgrading the valuation Center for two consecutive years The pressure of attention. At the same time, the economic recovery will also make sure that growth is no longer scarce, and the diversification of choices will aggravate the adjustment pressure of high value varieties.
On the external environment, the US election is approaching, the second outbreak of the European epidemic, many factors of instability in the international situation, and the increase of volatility in the US stock market will all cause the domestic market to become more volatile. Therefore, we believe that in the future, we will still be entangled with fundamentals and liquidity. It is difficult to find a clear middle level main line, and more needs to be found from the bottom up The opportunities for individual stocks, in particular, benefit from the direction of economic internal circulation.
If we take the year as the dimension, we think that there are two things that are probably clear. First of all, we should reduce the expected rate of return. The structural bull market for 19-20 years in a row can not be regarded as normal. In 2021, the average value will return to the high probability. Secondly, the emergence of effective vaccines or the upgrading of prevention and control system will further normalize the economy and life. In this context, we will pay more attention to the rising prosperity brought by the accelerated recovery of social consumption scenarios opportunity.
The market turns to be pro cyclical in the medium term, and long-term consumption and technology are still the main lines
Haifutong fund Huang Feng
In the first half of this year, all major economies in the world were significantly impacted by the new crown epidemic, and assets with high performance and high growth were sought after by the market. The pharmaceutical, food and beverage, tax-free and other sectors of domestic demand, the new energy vehicle industry chain representing the future growth direction, consumer electronics, self controllable and semiconductor, IDC data center of new infrastructure, etc., are all important layout areas for institutional investors. Overall, the structured market is more extreme.
Recently, the market turbulence has intensified, and the follow-up market trend is a topic of concern to many investors. My personal views are summarized as follows: short term neutral wide range shocks; medium-term market style has been adjusted; medium and long-term optimism, consumption and technology are still the long-term main line of the future.
In the medium and long term, interest rate environment and industrial structure are the fundamental reasons for our optimism. In the era of housing speculation, low interest rate environment has become the norm, under this background, equity assets may continue to premium. Why do we think that medium and long-term consumption and technology are the main lines? The former has barrier premium, while the latter has growth premium, which is also the track with the most innovation and the best brand.
Recently, the style of the market has been adjusted, and the plate with nearly 60 trading days partial cycle obviously outperforms the mainstream plate in this year. We expect this style adjustment to continue in the medium term. As the effects of the epidemic gradually subside, the economy will return to normalization. Before the economy returns to normal, liquidity is very abundant, and growth premium is the main line. After the economy returns to normal, the liquidity margin shrinks and the total amount is still abundant, but the style will gradually shift to pro cyclical industries, or assets with obvious marginal improvement in fundamentals. Although this kind of assets will be dominant in stages, we expect that capitalizing, consumption + technology will still be the main line after the undervalued blue chip supplementary inflation is in place.
In the short term, our judgment is the overall neutral wide oscillation. On the macro level, the economic recovery is more certain, the liquidity is relatively abundant, but the margin is slightly narrowed, and the market is expected to be neutral as a whole; from the micro perspective, the current mainstream assets are characterized by double highs, that is, the valuation and stock prices are at a relatively high position in history, which is expected to lead to more market shocks. In the short term, the main line of high-level assets is to grasp the medium-term report exceeding expectations, but the early structured market is more extreme. Now the higher valuation also determines that the main line of short-term high-level assets will be narrower and narrower. The main line of low level assets is to look for month on month improvement.
In terms of fund investment strategy, we will continue the open view of regular reports, focus on high-quality leading assets in the medium and long-term perspective, and match growth stocks. In terms of core stocks, the risk prevention brought by overvalue is the first. In terms of growth stocks, exceeding expectations is an important clue for us to select stocks, and will highlight fundamental risk prevention.
In particular, we should pay attention to the varieties that mainly earned u03b2 income in the early stage, and should not be too greedy. For the core assets held in the early stage of portfolio, one part chooses to stick to it, the other part waits for better opportunities. How to distinguish between persistence and waiting? If the income mainly comes from alpha, and the performance continues to verify, we will choose to stick to it. If most of the income comes from beta, which has ups and downs, and the ebb and flow is the time of risk, we need to wait for a better investment opportunity.
Based on my own ability circle and comparative advantage, I have invested in major consumption areas in the past. Recently, the leading consumer stocks, like other core stocks, are in the shock stage. My personal view is that big consumption is a high-quality long-distance race track, which has been repeatedly proved in the history of domestic and foreign stock markets. But this is only the law of direction, the development of things is spiral, holding the leading consumer stocks does not mean everything is well. In the aspect of consumer stock investment, active management ability is particularly important, and the initiative ability is more reflected in risk prevention.
Specifically, in the investment of value stocks, there are two types of risks that need key management. One is the bubble risk, that is, the risk of overvaluation will seriously affect the level of earnings and volatility of the portfolio in the next few years. The two is the value trap, which refers to the risk that the valuations are low but will not rise at any time, which will lead to the directional deviation of the portfolio.
About the author: Huang Feng, master. He has successively served as an analyst in the credit analysis department of Dagong international credit rating company, an employee of the project Department of Shenzhen Jiufu Investment Consulting Co., Ltd., a person in charge of the Securities Department of a listed company, a senior researcher of the Research Institute of Huachuang Securities Co., Ltd. he joined Haifutong fund Management Co., Ltd. in May 2011, he served as a stock analyst and fund manager assistant. He is now the deputy director of the public equity investment department. Since December 2014, he has been the fund manager of Haifutong domestic demand hot spot, and since June 2019, he has also been the fund manager of Haifutong No.2 hybrid and Haifutong selective hybrid.
From valuation repair to profit confirmation, grasp the long-term opportunity in the middle of bull market
Wang Keyu, investment and research director of Hongde fund
Since the middle of July, the A-share market started a seesaw war after the rapid rise: the uncertainty of overseas economic recovery prospects and the repeated repeated epidemic situation have made the overseas market appear obvious shocks and fluctuations recently. At the same time, since the beginning of 2019, A-share has experienced a long process of valuation improvement, and the valuation of some industries and sectors has rapidly risen to a higher level. In recent months, with the recovery of the economy, liquidity easing has changed significantly, and the A-share valuation repair has come to an end.
On the one hand, they are worried about the high valuation and excessive increase in the early stage, and on the other hand, they confirm the recovery of enterprise profits in the future. The two factors are intertwined, which makes a share enter into the situation of intensified shock.
In this case, how to grasp the long-term opportunities in the future and how to deal with the short-term market fluctuations is a major test for investors. As far as portfolio management is concerned, the more volatile we are, the more we need to think about our investment objectives from a long-term perspective. We hope to seize the opportunity of rising in the early stage as much as possible and avoid the risk in the later stage. In the middle of the bull market, the complexity and difficulty of investment are increasing. There are two preconditions to achieve this: one is to have a clear understanding of the operation state of the follow-up market; the other is to have a firm belief in the long-term goal of investment.
Since 2019, the regulatory authorities and the whole market entities have been reorganizing the positioning of the capital market, and we all see that the whole market is developing towards a more market-oriented regulatory direction.
Second, with the optimization of the market issuance system, more and more enterprises with strong long-term competitiveness and potential are listed in A-share market. Their listing is no longer restricted by short-term financial indicators as in the past, which also provides investors with better investment targets.
Of course, after one and a half years rise in the market, the overall valuation has reached a medium level. The valuation of companies with long-term growth has been rising continuously under the environment of low interest rates, which has also increased the difficulty of our investment. It requires us to have higher standards for the selection of companies, and higher requirements for the improvement of enterprises competitive barriers and long-term competitive advantages, so as to cope with the implicit valuation Risks involved.
With the short-term economic recovery, demand recovery and supply contraction, many enterprises will withdraw from the competition in the future, but this also provides better development opportunities for the remaining enterprises. Especially after the outbreak of the epidemic, a number of excellent enterprises rose against the trend. Relying on years of accumulation, they actively responded to risks and turned them into opportunities, and opened up a new situation with a stronger attitude. After the waves of competition and elimination, the development of these high-quality enterprises is bound to become the main source of our investment in the future.
How to invest in the future? I think we should go back to the long-term trend of our market.
In investment, we usually go through two processes: one is to have a very full understanding and analysis of a companys industry competition pattern and operation ability. The second is to wait for the buying opportunity brought by market fluctuation. In the long run, we will mainly invest in the direction where China has the most industrial advantages.
In our long-term optimistic direction, medicine and consumption are also the best performing industries in the first half of this year. Due to a large amount of capital inflow, the industry itself has a certain degree of overestimation. In this case, we also put forward higher requirements on investment targets. First, the sustainability of business development; second, whether these companies can lead the industry development and resist fluctuations and risks Dont be strong. We need to carry out more stringent screening on our preferred targets, and choose companies with high safety margin of valuation for key investment.
In the direction of emerging industries, we mainly invest in new energy and TMT. After two rounds of increase this year, the valuation of this sector is also at a relatively high level. At present, the market has given the same pricing and valuation to the leading companies in these industries and ordinary companies. In this case, our portfolio needs to be concentrated on the leading companies.
In addition, the valuation of many companies is still at the bottom of history. The epidemic in the first half of the year had a great impact on their operation, resulting in the stock price performance of these industries and enterprises far behind the market in the past year. However, in the process of economic activity recovery, their performance has improved significantly, especially chemical industry, finance, transportation and other industries have been more recognized by investors, which is also an investment opportunity worthy of attention in the future investment.
In addition to our long-term tracking targets, we will also focus on new listed companies in the last two or three years. In particular, those companies with relatively reasonable valuations are more competitive in the subdivided fields, and there is a large space for profits and market value. On the other hand, in the current market environment, there will be many companies with stable business but low investment attention. The valuation trap discussed by us may happen in such companies, which is also a risk factor we need to avoid. With more and more companies that we evaluate and invest in, the portfolio will be more and more inclined to long-term investment in some companies with excellent management and relatively broad business development space. At present, the market is in a state of fluctuation. We believe that in the process of fluctuation, we should find more and better investment opportunities. Source: China Fund News Editor in charge: Yang Bin_ NF4368
In addition to our long-term tracking targets, we will also focus on new listed companies in the last two or three years. In particular, those companies with relatively reasonable valuations are more competitive in the subdivided fields, and there is a large space for profits and market value.
On the other hand, in the current market environment, there will be many companies with stable business but low investment attention. The valuation trap discussed by us may happen in such companies, which is also a risk factor we need to avoid. With more and more companies that we evaluate and invest in, the portfolio will be more and more inclined to long-term investment in some companies with excellent management and relatively broad business development space. At present, the market is in a state of fluctuation. We believe that in the process of fluctuation, we should find more and better investment opportunities.