In just nine trading days, the number of funds that have doubled this year is half that of November 10. Wind data shows that as of November 20, 2020, seven funds have doubled their returns this year, while as many as 13 funds have doubled their returns in the year on November 10.
The reporter noted that as of November 20, the year to date yield of industrial 4.0 fund of Agricultural Bank of China Huili fund Co., Ltd. was 113.27%, while on November 10, the annual yield reached 120.53%. Observing the net worth curve of the fund, it is found that the maximum withdrawal of the fund is close to 7% in the last nine trading days.
In such a short period of time, the largest pullback is close to 7%, which shows that the core heavy positions of public funds are still concentrated on the overvalued varieties that have risen sharply in the first 11 months. It also shows that the difficulty of making money in the A-share market is continuously increasing at the high valuation of stocks.
Although there is no significant systemic risk, the effect of making money is weakening. Zhu Fu, the investment director of fof of Haifutong fund, believes that at present, the market is still worried about liquidity. In the case of increasing operational difficulty, he hopes to keep the income since this year and avoid the risk of a large fluctuation.
Zhu pointed out that after the gradual normalization of the economy, the substantial easing in the early stage may enter a state of gradual tightening. The impact of liquidity tightening is reflected in the following aspects: first, bond yields, especially the yield of treasury bonds, go up; second, the markets support for overvalued sectors is weakened.
Can corporate profits digest the overvalued value?
At the end of the year, fund managers may worry about whether the profit growth of listed companies will continue when the market valuation is at a high level, especially when the profit growth of some industries is based on meeting the shortage of supply in overseas markets. However, the solution to the vaccine problem may have a negative impact on this.
Dacheng Fund believes that the core contradiction and the most important change in the market lies in the profitability of enterprises, and the global economic recovery roadmap is further clarified. Chinas economy has recovered significantly. The growth rate of Q3 single quarter profit of A-share non-financial industry has turned from negative to positive to 31.9% year-on-year, and the momentum has been transferred from export chain and midstream manufacturing industry to downstream optional consumption and service industries. On the other hand, the deterministic progress of overseas vaccines has both positive and negative effects on A-share earnings expectations: the negative is that the market share expanded due to filling the shortage of global supply in the early stage may be reversed, and the positive is that the export boom is improved due to the repair of foreign demand.
In this context, some fund companies emphasize that they should focus on the opportunities of high-quality sectors.
Ying Ying, the fund manager of Nord fund company, said frankly that although the traditional sectors with undervalued market expectations at the end of the year may be counter attacking, with the market stabilizing and rising, the stock investment at the end of the year should be more focused on high-quality growth plates. Ying Ying said that in the past quarter, the market experienced a quarter long correction of valuation contraction due to the superposition of double concerns about Sino US relations and the tightening of market liquidity margin, which roughly corresponds to the valuation switching and mean reversion mentioned by the company at that time.
The data observed from Nord fund show that although some listed companies performance in the first three quarters is beyond expectations, the market response is still relatively irrational, and the vast majority of stock price fluctuations are also different from the performance they present, which reflects the existence of market ineffective transaction and game sentiment to some extent.
Of course, from a logical point of view, the reason given by the market is still worrying about the impact of repeated outbreaks on performance and the concern about discount rate in the valuation model. Since the beginning of the fourth quarter, with the gradual landing of external risk factors, the market sentiment and index level may stabilize and slowly recover. Nord Fund believes that the emotional trading may be eased, and gradually return to the companys fundamentals.
Zhu Yun, a Haifutong fund company, said that it would focus on industries with deterministic growth in profitability and relatively reasonable valuation.
Source of this article: Ren Hui, editor in charge of securities companies in China_ NBJ9607