A shares have come out of an "unexpected" start, and some fund managers have explicitly adjusted their positions and revealed new operations in a letter to investors

Financial Associated Press (Beijing, reporter Chen Junling) news, when the beginning of 2022 A shares out of an "unexpected" start, at this moment, you will probably be curious, in the face of such a "sadistic" market, how will fund managers operate at the moment?

Through the text analysis of dozens of "Letters to Investors" since 2022, the reporter of the Financial Associated Press found that the "recognition rate" of fund managers' copywriters is not high, and the one-sentence summary is: "This year's market is not easy to do", but "structural market continuation" and "still full of confidence".

However, in several letters from low-profile fund managers, they have valuablely revealed the operations of the recent period. For example, some FOF fund managers have raised their equity allocations, increased their financial, consumer and pharmaceutical allocations, and reduced their holdings in sub-funds with higher credit risk.

Behind the valuation deviation, the new fund manager "plays a change"

More than a month ago, the original fund manager left for "personal reasons", and the two funds he managed were handed over to another new fund manager who had just debuted. If you pay attention to the holders, you can find that the valuation of the two funds has a lot of "deviation" from the actual net value.

Taking one of them as an example, although its management scale is only 100 million, the top ten heavy stocks at the end of the third quarter of 2021 are: Ningde Times, Oriental Wealth, China Exemption, WuXi AppTec, BYD, and Northern Huachuang, which can be described as the leader of the popular track.

On January 19, among its top ten heavy stocks, only Oriental Wealth and Guodian NARI turned red, the first largest heavy stock Ningde Times fell by nearly 3%, the fifth largest heavy stock Yongtai Technology fell to a halt, and the seventh and eighth largest heavy stocks fell by nearly 5%.

Despite the day's heavy injuries, the fund's net worth was announced that night by only 0.45%, a far cry from the fund's 1.36 percent decline in intraday valuation. Investors speculate that the newly appointed fund manager must have made a big move.

Similar "valuation divergences" have appeared many times in the past few days, but they have become more pronounced in recent trading days. In contrast, the situation is roughly the same for another pharmaceutical fund. On the same day, intraday valuations fell 1.69 percent and actual net worth fell 1.2 percent.

The new change of fund manager "playing style has changed"? On January 19, a letter from the "Explanation on the Change of Fund Manager of Medicine and Health" solved the mystery to investors. The letter said that the new fund manager has been deeply involved in the pharmaceutical industry for many years and has a keen sense of smell to dig out individual stocks in the industrial chain from the bottom up.

"Since taking over in December 2021, the structural market has been interpreted to the extreme, and the rotation between various sub-industries of medicine has accelerated, in order to resist the large fluctuations in the market as a whole at the end of the year, the fund has appropriately reduced its positions during the operation period, controlled the drawdown, and adjusted the original position structure." The letter said.

According to the new fund manager, for the pharmaceutical industry fund he took over, she recently reduced her position in the original A-shares, Hong Kong generic drugs, vaccines, and medical services. At the same time, the positions of traditional Chinese medicine and instrument sub-industries with positive changes at the bottom have been appropriately increased.

In her view, at this stage, the overall valuation of the pharmaceutical industry has moved down, although pessimism still exists, but with the annual report and the quarterly report approaching, high-quality pharmaceutical companies are expected to gradually dissipate the negative mentality of the market through steady revenue and profit growth.

FOF Fund "Beauty Pageant Changes": Increasing Allocations in Finance, Consumer and Medicine

"After a year of such ups and downs, the expected New Year's Eve market did not open, and the first week of the year ushered in a sharp adjustment of new core assets, and market sentiment once reached a freezing point." A 100 billion public FOF fund manager said in the holder's letter.

As of the end of the third quarter of 2021, he managed nearly 20 billion yuan of funds, and of the six FOF funds under management, four were "hybrid-partial debt" and two were "hybrid-balanced", and the market style could be described as quite "stable".

However, in the face of sharp market fluctuations since the beginning of 2022, the FOF fund manager revealed in the "Letter to Investors" that he is also constantly improving the existing investment framework, choosing investment targets more carefully, and continuously optimizing the portfolio structure.

"Several OF THE FOF products I manage have slightly increased the equity allocation ratio, moderately increasing the allocation of finance, consumer and pharmaceutical to balance the combined plate style. In addition, sub-funds with higher credit risk were reduced. He revealed in the letter.

In the view of the FOF fund manager, he is still more optimistic about the performance of A-shares in 2022. "Overall, we believe that the fundamentals and capital of A-shares in 2022 are relatively stable, and the recent sharp correction has further opened up the subsequent upside."

For the high valuation sector that has previously been criticized by the market, FOF fund managers believe that after undergoing significant adjustments, the overall valuation of A-shares has returned to a relatively reasonable level, both the absolute valuation and the relative valuation, and the overall risk of the market is not large, and it has a medium-term allocation value.

In addition, he is optimistic about the direction of the "steady growth" sector that forms a strong support for the market; the military industry, which is currently relatively cost-effective; the brokerage companies that have performed less than expected last year and deserve continued attention; and the pharmaceutical and consumers that have improved along the marginal profit margin.