Year-to-date, the game media sector has risen to the top, among which the game ETF (159869) has performed amazingly, which can be described as "eye-catching" and "gold-absorbing".
Source: ifind, statistical interval: 2023.01.03-2023.05.30
On the one hand, the net value is close to doubling, and it frequently tops the list of gainers, attracting high attention from retail investors inside and outside the market;
On the other hand, it was favored by large transactional funds, withstood the pressure of outflow of profit-taking funds during the rise period, and the scale increased by 440 million yuan during the year, with a net increase of more than 3 billion yuan, three times more than at the beginning of the year.
Why did index funds rise to the momentum of individual stocks? Huaxia Fund has previously taken stock, mainly due to the following points:
1) Game + AI = repair + growth, performance elasticity.
In addition to the reversal of dilemma at the repair level such as policy shift, IP going overseas, new product version number, and offline consumption scenarios, the game sector has further opened up growth space after catching the AI express:
AI for games is not a concept hype, but a real industry benefit. First, natural technology application scenarios fit, solve key pain points in the industry, and have high landing efficiency; The second is to reduce costs and increase efficiency, and contribute to incremental performance.
Source: Western Securities
Specifically, AI-related technologies are applied to various links, including intelligent NPC, scene modeling, AI programming, AI painting, AI plot, AI dubbing, etc., to further reduce R&D investment costs; At the same time, optimizing the player experience and accelerating the iteration cycle help improve the number of users, duration, payment rate and ARPPU, and there are even predictions that AI will bring leapfrog innovation to games, and it is not ruled out that it will develop into a sports competition in the future.
2) ETF holdings have high AIGC content and distinctive style.
Game ETF (159869) passively tracks the CSI Animation Game Index, as an industry theme index, with a distinctive track style, almost full of game stocks, when the industry wind comes, it can maximize the capture of income and strive to achieve "All in AI".
Among its constituent stocks, Kunlun Wanwei, Shenzhou Taiyue, Glacier Network, Giant Network and many other popular AIGC theme stocks are listed, contributing significantly to the ETF's gains, and from the relevant financial reports and announcements, AIGC business has made substantial progress.
Source: ifind, listed company announcement, institutional research report, as of 2023.05.30
3) The average market value of holding stocks is small, and the leader is allocated centrally.
The particularity of the game industry lies in the high entry barrier, large R&D costs, relatively stable market share of the head large game companies, strong R&D strength, rich IP storage, and continuous acquisition and release of new IP, AIGC technology application is undoubtedly a tiger with wings.
The Game ETF (159869) tracks only 29 constituent stocks of the index, which are few and fine, and all of them are small and mid-cap stocks, with an average market value of less than 20 billion yuan, which is flexible enough in the upward range.
At the same time, the top five weighted stocks such as Kunlun Wanwei and Sanqi Interactive Entertainment accounted for more than 47% of the total, and the top ten weighted stocks accounted for more than 73%, which is also the favored object of large funds including northbound funds.
4) The historical adjustment time is long and deep.
Since the retracement of the 2015 highs, the Anime Games Index tracked by the Games ETF has been very deep, at more than 80%. Due to the adjustment of industry policies, after a long period of sluggish performance, the chip structure is scattered, the institutional position is low, and the room for additional allocation is large.
Statistical period: 2016.12.30-2022.12.30
Investment strategy: Can the current game still be laid out? Is it the end of the strong crossbow?
Xu Meng, fund manager of Game ETF (159869), recently warned of risks: in the short term, catalyzed by NVIDIA's release of AI customized model services, Apple's plan to launch the first AR/VR headset, and the release of policies in many domestic places to support artificial intelligence, the game rose greatly, volatility will also intensify, and new investors are cautious to chase higher; However, AI+ games are still long-term opportunities, which can be arranged in batches in the form of fixed investment index funds.
In addition to the game ETF (159869), there is also the Hang Seng Technology Index ETF (513180) worth paying attention to, the current index valuation is at a low level, not only covering Tencent, NetEase and other Hong Kong-listed game head companies, but also AI artificial intelligence upstream chips, software development leading companies, such as Baidu Group, SMIC, Hua Hong Semiconductor, etc. Listed and traded on the Shanghai Stock Exchange, you can participate with a low threshold without opening a separate Hong Kong stock account.
At the same time, the opportunity in gaming hardware devices has not yet been adequately priced. The development of AI technology has led to the emergence of wearable devices such as VR/AR and virtual devices, which will help enhance the fun of games and the immersion of players. Related targets can pay attention to consumer electronics ETF (159732), and the index constituents cover Luxshare Precision, BOE, Transsion Holdings, etc., which may usher in a reversal of difficulties under the AI wind.
The performance of the CSI Animation and Game Index for the full fiscal year 2017-2022 is: -23.37%, -41.25%, 20.34%, -12.58, 1.11%, -32.88%, and the historical performance of the index is not indicative of the future performance of fund products.
Risk warning: The above is only for service information, and the mention of individual stocks is not a recommendation and is not used as an investment basis. The market is risky, and investment needs to be cautious. The above views are for reference only. The risk rating of the above fund is R4, and the specific risk rating result is subject to the rating results provided by the fund manager and the sales agency. These funds are equity funds with higher expected risks and expected returns than hybrid funds, bond funds and money market funds. Index funds may have risks such as tracking error control not meeting the agreed target, the index compiler suspending its services, and the component securities being suspended or defaulting. In addition, ETF product-specific risks include: the risk of deviation between the return of the underlying index and the average return of the stock market, the risk of fluctuation of the underlying index, etc. Investors should carefully read the legal documents to determine whether they are suitable for their own risk tolerance. The fund manager does not guarantee a profit, nor does it guarantee a minimum return.
In addition to the general investment risks such as market fluctuation risks similar to those of domestic securities investment funds, cross-border ETFs are also exposed to special investment risks faced by overseas securities market investments, such as Hong Kong market risks, including the risk of large stock price fluctuations in the Hong Kong stock market, exchange rate risks, legal and political risks, accounting system risks, tax risks and risks related to investment instruments.