Speed Reading Fund’s Third Quarterly Report

This year’s market has been full of twists and turns, and many fund managers who have been in the business for a short period of time are experiencing an unprecedented test of retracement. Faced with such a cruel market, how do they deal with it? The sluggish market is undoubtedly a touchstone to test the quality of fund managers’ investment ideas. The third quarterly report has just been released. Taking this opportunity, let’s talk about some of the latest developments of fund managers that everyone is concerned about.

1. Jiao Wei: Become more low-key

If it is necessary to say who is the promoter of fund managers’ regular report “Small Composition”, then Yinhua’s Jiao Wei is undoubtedly one of them. Previously, he relied on his outstanding performance in 2019-2020, and then in the regular report with Wonderful writing, bold expressions, frequent reflections, and long essays of thousands of words have attracted a lot of attention.

Regarding his previous views in the regular report, I wrote an article at the beginning of last year: Looking at the mentality of the fund manager from the quarterly report , I expressed skepticism about it. The main reason is that every time his reflection is based on the market situation that has just happened in the past few months, such as whether valuation is important in investment or not, and whether a certain sector has investment value such as big right and wrong, he does not have one consistent. The answer is to swing left and right, and the performance of the market in the past few months has greatly influenced his views. In my opinion, the market is constantly changing, and it is impossible for everyone to learn any investment truth in a few months of the market. Therefore, this so-called literary reflection lacks value, and his reflection is often from one extreme to another. Extreme, the views are not prudent enough, and there is a suspicion of grandstanding.

Looking back now, I think everyone should be able to accept this view very well. Just like the Mao Index market in 2019-2020, countless investors are saying that as long as they buy a good company, where does the stock price fall quickly? Where will it go back. This view was true at the time, and there was a very strong momentum effect in the market. However, now times have changed, and the stock prices of many good companies in everyone’s mind have been cut in half at every turn, and it has become an extravagant hope for the stock price to return to the original high…

In view of Jiao Wei’s investment style of pursuing good companies, it is reasonable for his performance to drop sharply this year. The theme of Yinhua Fuyu has fallen by 32.55% since the beginning of the year, and the management scale has also shrunk to over 20 billion. In the face of such performance, it seems that he has long since lost the spirit of writing a small composition. The third quarterly report shows that the length of the “small composition” has been significantly shortened. The exaggerated expressions of various literary talents before have disappeared, and all of them have been replaced by simpler language. With words, it is no longer topical.

As for the investment level, in addition to his still sticking to consumption and medicine, he significantly increased his positions in the recently hot traditional energy companies (crude oil and coal) in the third quarter. The latest periodic report disclosed that the proportion of the mining industry in the portfolio was as high as 16.37% . The reason is that Now the investment pattern of the traditional energy industry can be compared to that of liquor . With traditional energy sector shares surging higher, hopefully this wasn’t the wrong call…

2. Zhang Kun: Continue to increase allocation to US stocks

Zhang Kun’s year-to-date performance shows the complexity of the market this year. In the first four months of this year, due to the relatively resilient performance of the consumer sector, E Fund’s high-quality selection was relatively ahead. However, with the continuous compensatory decline of consumer stocks in the past one or two months, Zhang Kun’s net worth has continued to hit a new low since 2021, and the investment income of E Fund’s high-quality selection has been -33.5% since the beginning of the year.

The sluggish performance led to the collapse of everyone’s belief in Zhang Kun, and everyone paid much less attention to him. Opening the three quarterly reports managed by Zhang Kun, the changes in the positions of other funds except E Fund Asia Select have been small; as for E Fund Asia Select, he is constantly increasing his allocation to US stocks. At the beginning of this year, the fund’s allocation ratio in US stocks was 2 % , his allocation ratio in U.S. stocks was 16.31% in the semi-annual report this year, and by the end of the third quarter, this ratio had further increased to 31.53% . However, subject to the constraints of the fund contract, the main business scope of many of his U.S. stock positions is still in the Asia-Pacific market.

In the fund manager’s presentation part of the third quarterly report, he still emphasized the need to pay attention to the performance of the company itself, and downplayed the concern about the short- and medium-term economic environment and market performance. Zhang Kun also made an interesting analogy. He believes that investors should If you buy stocks with the mentality of buying a house, the ending will be much better. The original words are as follows:

[Zhang Kun] In fact, if investors invest in stocks with the mentality of buying a house, including detailed fundamental analysis (a large number of real estate research), heavy purchase (investing a lot of money), long-term holding (not due to short-term house price fluctuations) transaction), it may work much better. 【Zhang Kun】

It is also worth mentioning that nearly two and a half years have passed since the closing period of the three-year holding period fund (E Fund High Quality Enterprise) he issued and established in June 2020, and will be opened and closed in June next year. During the period, the net value of the fund took a roller coaster ride. The net value initially rose rapidly from 1 yuan at the time of establishment to 1.68 in early February 2021, and then continued to pull back from the highest point to the current 0.89. There are not many days to close, and it is expected that In Zhang Kun’s style, the net worth when it opens and closes in the future will not have too many surprises…

3. Xiao Mi: Another Victim of the Hong Kong Stock Market

Among the many underperforming sectors and markets, Hong Kong stocks are undoubtedly the most disappointing ones. There are countless big bosses who have overturned in the Hong Kong stock market. Before , I thought twice before buying Hong Kong stock funds! In the article, I also talked about the difficulty of investing in the Hong Kong stock market. On the one hand, the Beta of the Hong Kong stock market is very poor, and the Hang Seng Index has been standing still in the past ten years; on the other hand, it is difficult to obtain Alpha in the Hong Kong stock market. The market obtains stable excess returns.

At present, there are many fund managers who are optimistic about the Hong Kong stock market. Xiao Mi of Harvest Fund is also one of them. However, judging from the net worth this year, he has also become a victim of the Hong Kong stock market. Year-to-date, the A-share-only funds managed by Xiao Mi, Harvest Logistics Industry and Harvest Cycle Choice , have fallen by only 2.26% and 8.24% respectively , while the Hong Kong stock-investable funds he manages, Harvest Basic Industry Choice and Harvest Core Blue Chip, have fallen by 24.85% respectively. And 24.7% (about 40% of the investment in Hong Kong stocks), the addition of Hong Kong stocks allocation significantly dragged down the overall performance of the fund. Regarding the Hong Kong stock market’s views, Xiao Mi still did not shy away in his regular reports that he would continue to persevere.

It is particularly worth mentioning that Xiao Mi talked about the limitations of linear thinking and his thoughts on the cyclical industry in the latest periodic report. I think it is worth reading. Here I will extract his views for everyone. refer to.

[Xiao Mi] Under the general logic, or the logic of the linear thinking mode, changes in the actual situation will be amplified to a considerable extent into the same direction changes in long-term predictions. Changes in consensus expectations will lead to fluctuations in stock prices, and this This amplification effect often means that stock prices fluctuate more than the company’s actual fundamentals. However, because the market entities in the real world are subjective, the results of linear extrapolation often have a large deviation from the actual situation in the end, so investors who can jump out of linear thinking and give judgments closer to the real world can Get excess returns.

The most typical example is the operation logic of cyclical industries: the current industry is very prosperous, so the market thinks that the future will be very good, and if the expectations are good to a certain extent, the market will find various ways to explain that this kind of good is sustainable (“valuation”). There is still room for upside”); but the fact is that this high probability will attract industrial capital to increase investment in this industry (a manifestation of subjective initiative), resulting in excess production capacity in the next two years, and the economy will eventually decline. 【Xiao Mi】

Seeing Xiao Mi’s views on the cyclical industry, I remembered that Jiao Wei began to compare the investment value of traditional energy and other industries to liquor…

As for what is right and wrong, leave it to time!

4. Lao Jie Nan: Reduce the focus of portfolio valuation

Before, I systematically analyzed Lao Jie Nan’s investment philosophy and investment strategy in two articles : Lao Jie Nan: A Conscience Fund Manager Focusing on Holder Experience and Analysis of the Reasons for Lao J N’s First Quarter Drawback. On the whole, although Lao Jienan pays great attention to the investment experience of the holders, on the one hand, he puts too much emphasis on keeping upright in specific investments, and mainly allocates the portfolio on the constituent stocks of the Mao Index; When the performance lags behind, he often reflects on and then follows the market, which leads to the situation of chasing high. The combination of two factors has caused his performance to be unsatisfactory.

Judging from the situation since the beginning of this year, it seems that Lao Jienan still has not been able to follow the market rhythm. Since the beginning of the year, China Universal Value Selection has dropped by 29.73% . This is for a fund manager who pays attention to investor experience and emphasizes valuation. , it should not be.

Comparing with several periodic reports disclosed by China Universal Value Selection since the beginning of this year, it can be found that Lao Jienan has lowered the valuation focus of the portfolio, and six of the top ten stocks held by the portfolio have a single-digit price-earnings ratio. within.

In the latest three quarterly reports disclosed, he detailed the direction of his position adjustment, specifically:

[Lao Jienan] During the reporting period, the Fund reduced its holdings in real estate-related industries, appropriately controlled its holdings in bank real estate, and reduced its holdings in individual stocks in the building materials industry. The portfolio holding stocks are dominated by stable value and stable growth stocks. Among the stable growth stocks, the portfolio has reduced its holdings of stocks with lower-than-expected earnings growth and was greatly affected by the epidemic, and increased its holdings of earnings growth in the next few years. Relatively more secure and unaffected stocks. In addition, the Fund increased its holdings of resource stocks during the reporting period. 【Lao Jie male】

On the whole, Lao Jienan’s operation idea is still to follow the market, lighten up the financial real estate and increase the upstream position, lacking excess understanding of the market.