Defeat 87% of active funds in 3 years, and the growth is really strong!

This is the 96th letter written to CSI 300.

On August 1, the three major indexes closed in the red, and the five broad-based growth ETFs rose the most.


Regarding the A shares on the first trading day of August, my good friend CSI 300 made a summary: the opening fell terribly, and the closing problem was not a big deal.

After the torment in July, many people are collecting various information and data to speculate on the trend in August, and even listed the trend of A shares in August in the past ten years. not worried.

In the past, I also liked to watch the backtesting and statistics of this kind of historical data. After all, everything is a cycle, and human nature will never change. However, I have become more mature after my 18th birthday, and I no longer deliberately check this kind of data. Now, pay more attention to the moment, look directly at the picture, and whoever is stronger follows who, of course, I am talking about the broad-based ETF in the selection pool, not individual stocks.

Facts have proved that after doing this, there is less gray hair, more time to spend with family members, and more time to watch entertainment gossip in the financial circle. Okay, skin it, I’m very happy, the next content is very, very important, remember to read it again and again after collecting it.

Today, I would like to introduce to you a broad-based ETF with an annualized return of up to 28.5%. It is the Creation Growth ETF (159967). It is said that it is excellent, it is beautiful, and there are pictures and truths.



▲ Source: EarlETF

The above picture shows the distribution of net value income of four active funds with partial stocks, namely stock funds, partial stock funds, flexible allocation funds and balanced funds in the Choice financial terminal from July 15, 2019 to July 13, 2022 Figure, a total of 2360 active funds, the average return is 74.80%.

In the same period, the income of the Growth Growth ETF is 136.85%. If it is ranked with the above-mentioned 2360 active funds, it can be ranked 305th, that is, it beats 87% of the active funds with partial stocks.

This broad-based ETF is so good, what is the origin? Please see.


▲ Source: China Asset Management

The Chuang Growth Index was released by the Shenzhen Stock Exchange on January 23, 2019, and its full name is ChiNext Momentum Growth Index. The index first uses the top 30% of the market capitalization as a criterion, and then calculates the comprehensive score based on the two factors of growth and momentum, and selects the top 50 stocks to form the sample stocks.

Constructed by the “Smart Beta” strategy, which has been widely recognized by the market in recent years, the fact that the Growth Index significantly outperformed its parent index ChiNext also fully proves the effectiveness of this strategy. In the promotion and operation of Smart Beta Index Fund, China AMC is really trying very hard, and it also gives Christians more good choices, which is worthy of praise. For example, it has recently launched 500 Growth and 1000 Growth ETFs.

The Chuang Growth Index has outperformed the ChiNext Index, the Entrepreneurship 50 Index and other mainstream broad-based indexes for a long time, mainly because of the following three points.

①The constituent stocks of the Growth Growth Index focus on high-growth and high-resilience stocks

The GEM Index (number of constituent stocks 100) and GEM 50 Index (number of constituent stocks 50) are mainly based on liquidity and market capitalization to screen constituent stocks, and select the top 100 and 50 stocks in terms of liquidity and market capitalization respectively. index.


In the process of compiling the growth index, the market value is also taken into account, and the high growth and high elasticity of individual stocks are also taken into account, so the style of the constituent stocks of the growth index is more clear.

② The adjustment frequency of the constituent stocks of the Growth Growth Index is faster, the pace of relieving the old and accepting the new, and the survival of the fittest are faster

Compared with the GEM index and the GEM 50 index, which adjust its constituent stocks every six months, the adjustment frequency of the constituent stocks of the Growth Growth Index is faster, and it is a quarterly adjustment. growth stocks.

For example, on December 14, 2021, the growth index adjusted the constituent stocks. After this adjustment, the weight of the traditional Chinese medicine sector in the industry distribution of the growth index was significantly reduced, and the weight of electrical equipment and mechanical chemical industry was significantly increased, which can better reflect the current situation. Market hotspots.

③ The core reason for creating an excellent growth index lies in its compilation rules

In the creation rules of the growth index, two factors, growth and momentum, are mainly considered.


▲ Source: EarlETF

Growth factor:

Revenue Growth: Year-over-year revenue growth in the latest quarter;

Profit growth: the year-on-year growth rate of profit in the latest quarter;

EBIT growth: Year-on-year growth in earnings before interest and taxes (EBIT) in the latest quarter;

Momentum factor:

52-week high: The ratio of the current share price divided by the past 52-week high;

12M-1M Momentum: Cumulative return from last 12 months to last month;

12M-1M Excess Return Momentum: Cumulative excess return from last 12 months to last month (relative to all-A market cap-weighted portfolio).

The momentum factor can be used to remove those constituent stocks that have underperformed as soon as possible. For example, many medical stocks that have performed poorly in the past year have been eliminated.

Combining the growth factor of the momentum factor, the growth is closer to the market, and it is fully considered that the market trend is often ahead of the fundamentals. Such double insurance can ensure that the selected stocks tend to have growth, trend and strength. ensure.

I would like to share with you a little common sense in the stock market. No matter which country the stock market is in, growth is the eternal and most vital theme.

After knowing the reason for “creating growth is really strong”, it’s time to talk about how to vote the most concerned about everyone.

The rules of creating growth have created its high volatility, high elasticity and high returns, so I will still focus on the trend position. If I want to invest 1 million, then I will allocate more than 800,000 funds to the trend position, 200,000 Funds are given to free positions (grid positions + valuation positions), that is, trend positions account for 80% and free positions account for 20%.

One more point for everyone, that is, the constituent stocks of Chuangxin are updated on a quarterly basis, and coupled with the screening rules for its growth and momentum factors, its valuation will be higher than that of ChiNext and Entrepreneurship 50, and may even have been In a state of overvaluation, if you want to determine the position size by the valuation level, you can directly look at the valuation level of the All-A Index or the CSI 300 Index.

It is precisely because of the valuation characteristics of the creation of growth that technical analysis and trend-setting are more suitable for it. If you look at the MA20, you can directly look at the daily line instead of the weekly line like the CSI 300.

Finally, let’s take a look at the valuation of the CSI 300 Index.


Data source: wind, leek circle

Today’s PE of the CSI 300 Index is 12.14 times , and the five-year percentile is 29.14% . The valuation is in a reasonable position, and position control and expectation management must be done well.

Finally, in order to express my love for Chuangcheng, I directly gave up the 50 seats of the five broad-based startups to Chuangcheng, and also shared a little secret with you. In the future, Chuangcheng ETF will be my wide-based ETF.

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