$Yinhua Tianji-Quietly Ying(TIA05031)$ $Yinhua Tianji-Niannianhong(TIAA041001)$
This is our 1005th weekly strategy report.
In last week’s weekly strategy “Hong Kong Stocks, Real Estate and Recovery” , we did a special research and analysis on Hong Kong stocks, real estate and the consumption sector that benefited from economic recovery. From the perspective of market trends, some of our weekly strategies The logical deduction has been verified, and the market’s staged style has come to the direction of undervaluation + dilemma reversal, which feels a bit like “cheap is the last word”.
This week’s weekly strategy continues to do the following thinking.
1. The style has become
Since the Shanghai Composite Index bottomed out at 2885.09 points on October 31, in more than a month, on the one hand, it has shown strong signs of trend reversal, on the other hand, the entire market style has also undergone great changes , the market has quickly switched from a growth style to a value style, and industries with low valuations and reversals in distress have performed prominently.
These judgments, we can explore the clues from the index.
The relatively value-oriented Shanghai Composite Index rose by about 9.98% from its lowest point of 2885.09 points on October 31, 2022, to 3206.95 points after the close on December 9;
The relatively growth-oriented GEM index rose by about 7.56% from its lowest point of 2227.83 points on October 31, 2022 to 2420.63 points after the close on December 9;
The Hang Seng Index, which has suffered in the past two years, seems to have ushered in a reversal of its own difficulties. From the lowest point of 14597.31 points on October 31, 2022, to 19900.87 points after the close on December 9, it has increased by about 33.89%.
The performance of the three comprehensive indexes with different styles can be said to be very different, and the Hang Seng Index is obviously ahead.
This is a comprehensive index, and it is even more obvious if we look at the subdivision index. We selected 3 more representative sub-industry indexes for comparison, representing value, growth, and reversal of difficulties respectively.
The value style represents that the infrastructure construction index has increased by about 12.47% from the lowest point of 3559.11 points on October 31, 2022 to 4120.76 points after the close on December 9;
The growth style represents that the CS new energy car index has increased by about 8.37% from the lowest point of 4113.35 points on October 31, 2022 to 4498.44 points after the close on December 9;
The reversal of the dilemma means that the Hang Seng Technology Index has increased by about 54.79% from the lowest point of 2792.13 points on October 31, 2022 to 4369.53 points after the close on December 9;
From the comparison of the comprehensive index and the sub-index, we can see that the undervalued value sector + the distressed reversal sector are very prominent, and the market style may have formed in stages.
(Source of above data: Straight Flush, 2022.12.09).
2. Reason analysis
If you want to analyze the reasons for the market style change, you have to say the core concept of “everything is a cycle, underestimating the winning rate”. In our investment philosophy, any industry and style has a cycle, just like the four seasons of spring, summer, autumn and winter. They are all cyclical. No style or industry can keep rising, and there will be a cyclical cycle. fluctuation.
There are two core reasons for this market style change. The first is that the growth style has risen much and lasted for a long time, which needs to be corrected.
GEM refers to 2018.01.01—2022.12.09, straight flush
Let’s take a look at the trend of the ChiNext Index. As can be seen from the above figure, the ChiNext Index has reached its lowest point of 1184.91 points on October 19, 2018, and before the adjustment starts at the end of 2021, the highest point will be July 22, 2021. 3576.12 points, the largest increase in the range of about 201.81%.
Even after nearly a year of adjustment, as of December 9, 2022, after the close of 2420.63 points, the range has increased by about 100.88%. It can be said that the past few years, especially from the end of 2018 to the end of 2021, have been the three years when the growth style has become popular, and the scenery has been the same for a while.
Compared with the style of ChiNext Index, the performance of Shanghai Composite Index and Hang Seng Index in the same period can be said to be very sluggish, especially the Hang Seng Index.
This is the second reason for the market style switch. Undervalued value sectors, especially distress reversal sectors, have fallen for a long enough time and are cheap enough.
Shanghai Composite Index, 2018.01.01—2022.12.09, Flush
The picture above shows the performance of the Shanghai Composite Index during the same period. It can be seen that from the lowest point of 2440.91 points on January 04, 2019, before the adjustment began at the end of 2021, the highest point was 3731.69 points on February 18, 2021, the largest increase in the range About 52.88%.
As of 3206.95 points after the close on December 9, 2022, the range has increased by about 30.13%.
Hang Seng Index, 2018.01.01—2022.12.09, Flush
Let’s take a look at the Hang Seng Index again. At a glance, the graph shows a significant decline.
The resumption of the Hang Seng Index, from the lowest point of 21139.26 points on March 19, 2020, to the highest point of 31183.36 points on February 18, 2021, the largest increase in the interval is about 47.51%; as of December 9, 2022, the closing price is 19900.87 points, down about 25.71%. (Flush, 2022.12.09)
3. How long will it last?
After review and analysis, we can basically be sure that the style may have been formed, and we can also find the reasons for the market style switch from the disk. Then we have to think about two things next to see what kind of investment opportunities there are?
From our past experience, there are two things that need to be paid attention to. One is that the undervalued sector, especially the distressed reversal sector, has a relatively high probability of transitioning from the general rise stage to the differentiation stage.
From the current market round since the end of October, it is obvious that the performance of index funds is much better than that of active funds, especially in the direction of the Hang Seng market; it can also be seen that many Hong Kong and US stocks that are marginalized and have a small trading volume are listed These are some commonalities in the early stage of the market. On the one hand, the index often shows the overall market in the early stage, and on the other hand, short-term funds and trend funds will take advantage of the trend and engage in some “sneak attacks”.
But from the perspective of historical law, when the market passes through the initial stage of switching, it may enter into a split market later, medium and long-term investment funds begin to look for more valuable investment opportunities, and trend funds and short-term funds will also choose their attack direction.
Then let’s take a look at the second question, how long will the undervaluation + dilemma reversal style last?
There are two aspects to answering this question. One aspect is when will the growth sector be adjusted in place? Another aspect is when the undervaluation + the reversal of the dilemma will rise in place.
When will the growth sector be adjusted in place? In terms of time, the GEM index started from the end of 2018 to the end of 2021, with a maximum increase of about 201.81%; and from the end of 2021 to December 9, 2022, about one year, from From the highest point of 3576.12 points on July 22, 2021, to the closing price of 2420.63 points on December 9, there was a correction of about 32.01%. (Flush, 2022.12.09)
That is, since the end of 2018, the ChiNext Index has risen for 3 years, by about 3 times, and has fallen for 1 year, by about 30%. It seems that time and space are almost meaningless. However, the TTM valuation is 40.21 times (Wind, 2022.12.09), which is 19.81% of the historical percentile, and it seems that it is gradually approaching the bottom area.
So is the undervaluation + dilemma reversal sector up in place? I won’t go into details about this place. It’s only been more than a month, and there’s a high probability that the interpretation hasn’t been completed yet, and there’s a high probability that the valuation and oversold parts haven’t been repaired in place yet. Even the staged rest of the sorting platform is more difficult to change the overall trend.
4. Our Coping Strategies
The things we sorted out and analyzed above are all aimed at large sectors and styles. In specific investments, some subdivided indexes and specific stocks do not completely resonate with the switching of sectors and styles. The market will start ahead of time, some will lag behind, and some will have an independent market.
Therefore, the specific investment must be thousands of people and very personalized, but through these macro-level research and analysis, we can strive to avoid major strategic mistakes, strategic layout, tactical target selection, correct strategy Under the circumstances, even a slight mistake in tactics will not affect the overall situation.
Of course, there is also a bottom-up investment style. This style has high requirements for the research of specific stocks or indexes. This is another system, and I will not discuss it here today.
In addition, everyone should follow the changes in the market and constantly revise their investment ideas and strategies. It should be noted that since the end of 2018, the market has obviously stepped out of an optimistic trend on the whole. Rapid rises and falls have become a thing of the past. On the basis of periodical style drift, the overall resonance is relatively the same frequency. Although the Shanghai Composite Index and the Growth Enterprise Market Index are different in terms of rise and fall, the rhythm is not completely opposite, and the same frequency is still maintained to a certain extent. .
However, the performance of the Hong Kong market is relatively extreme. The past few years may not be fully interpreted by market logic. This is a special case. Of course, this may also pave the way for future market conditions.
Therefore, based on the above research and analysis, we are also constantly re-examining the strategies of our two fund investment advisory portfolios, Yinhua Tianji-Quiet Yingying and Yinhua Tianji-Niannianhong, in order to continuously revise and improve to form a more comprehensive investment strategy. good strategy.
Careful friends should be able to find that we have implemented our latest position swap on various platforms last week. The general strategy is to increase the equity position to near the upper limit and make adjustments to some specific fund varieties.
In another aspect of the strategy, subject to various rules such as turnover rate, after comprehensive analysis, we still need to maintain the correctness of the medium and long-term direction, and give up short-term flexibility appropriately. Correctness is more important.
Therefore, this time, we will gradually start to refocus on hard technologies including military industry, and the direction of excellent Chinese listed companies in Hong Kong and US stocks, and reduce the attention of some value-oriented broad-based companies. This may be our goal for a while in the future. core strategy.
Based on the present and looking forward to the future, although we may benefit from the direction of Hong Kong and US stocks and the layout of broad-based and bond-based funds, we will pay more attention to growth-oriented fund varieties. Therefore, in terms of yield, in the future, Therefore, the two fund investment advisory portfolios may sit on the bench for a period of time in stages.
In the medium and long term, we have confidence in our research and analysis, as well as in our overall strategy. I hope everyone can maintain enough patience and confidence. If you have any doubts, you can leave a message to communicate and don’t blindly make wrong decisions.
This week’s weekly strategy is to communicate with you, hoping to learn from and help you. The core points are as follows:
1. Cheapness is the last word. Undervaluation + distress reversal market may have formed and is expected to last for a while.
2. The time and space for growth style adjustment may not be interesting, but the valuation has entered the bottom area.
3. When the Yinhua Tianji-Quietly Prosperity and Niannianhong positions are in progress, the equity positions are basically close to the upper limit.
4. Under the existing rules, maintain focus on the medium and long-term investment direction, and strive to do better in terms of yield, drawdown, volatility, etc.
I am silent, insisting on researching and analyzing funds every day,
An investment observation and reflection every trading day,
A “Fund Review” video every trading day,
A weekly strategy report is released every Sunday,
Maintain efficient communication and communication at any time, a fund investor who insists on improving research capabilities.
If you think the content is valuable, you think Quiet Ying and Niannianhong Fund Investment Advisory Portfolio are trustworthy, and you think the communication with consultants is very important, please like, leave a comment, and forward it. thanks.
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Reminder: This article does not constitute investment advice, the market is risky, and investment needs to be cautious.
Managed fund investment advisory services are provided by Yinhua Fund Management Co., Ltd. Regular fixed investment is a simple and easy investment method to guide investors to make long-term investment and average investment cost. However, regular fixed-amount investment cannot avoid the inherent risks of fund investment, nor can it guarantee investors’ income, nor is it an equivalent financial management method to replace savings. The investment advisory portfolio recommendations may include fund products managed by Yinhua Fund and fund products managed by other fund managers. Before using the fund portfolio service, investors are requested to carefully read the relevant agreements, business rules and strategy instructions, fully understand the details of the portfolio and the fund allocation of the portfolio, and confirm that the portfolio is in line with their own risk tolerance, investment period and investment goals. Investors should follow the principle of “buyer is responsible” when investing in fund investment advisory portfolio strategies. On the basis of a comprehensive understanding of the risk-return characteristics, operating characteristics and appropriate matching opinions of fund investment advisory portfolio strategies, investors should choose appropriate fund investment advisors based on their own conditions. Combination strategies, cautiously make investment decisions, and independently bear investment risks. Yinhua Fund does not guarantee a certain profit and minimum return of the fund’s investment portfolio strategy, nor does it make a commitment to guarantee capital. The risk characteristics of fund portfolio strategies are different from those of individual fund products. The past performance of investment advisory services does not indicate its future performance, and the income created for other investors does not constitute a guarantee of performance. The fund investment consulting business is still in the pilot stage, and there is a risk that fund investment consulting institutions will not be able to continue to provide services due to the cancellation of the pilot qualification. Funds are risky, and investment needs to be cautious. #Fund Creator Incentive#
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