After a brief period of volatile consolidation, the gaming sector has recently rebounded. Gaming focused index funds also rose again in net worth after a brief period of pressure on their performance. The number of "doubling bases" that previously disappeared due to the adjustment of the game sector has also increased.
With the TMT sector strengthening again, active equity funds with heavy positions in AI, games and other related concept stocks that had previously withdrawn sharply in net value also showed a significant recovery. In the past 20 days, the net value of many TMT thematic funds has increased by more than 15%.
There is significant disagreement among fund managers on whether they should increase their positions in the TMT sector in the short term. However, in the medium and long term, institutions generally believe that AI may be driven by themes to fundamentals, which will test the judgment of fund managers.
Double the base to reproduce the rivers and lakes
4 funds returned over 100% during the year
A few days ago, driven by the rebound of the game sector, the growth rate of the net value of related index funds rose collectively, doubling the base and reappearing, and the number has increased.
Data show that as of June 14, there are 4 funds in the whole market that have returned more than 100% this year, all of which are index funds in the heavy game sector.
Among them, Huaxia CSI Animation Game ETF ranked first with a return of 107.77% during the year. The fund gained 92.13% for the year ended June 8, and after a sharp rise on June 9, it returned 103.23% by the end of the year, returning to the doubling base again. In the following three trading days, the fund's net value continued to rise.
Three funds, including Huatai Berry CSI Animation Game ETF, Cathay CSI Animation Game ETF and Huaxia CSI Animation Game ETF Link A, have also returned to the ranks of funds that doubled their net value during the year.
Cathay CSI Animation Games ETF Connect A and Cathay CSI Shanghai-Hong Kong-Shenzhen Animation Games rose by 97.03% and 81.82% respectively during the year, also ahead of other index funds.
Since 2023, benefiting from the advancement of GPT technology, the game sector has received financial attention, and the game sector has become one of the leading directions of the GPT concept. With the strengthening of the game sector, at the end of April this year, the return of Huaxia CSI Animation Game ETF exceeded 100% during the year, becoming the first doubling base this year.
But in May, the gaming sector followed the GPT concept to a sharp correction, and the doubling base disappeared after only one day. After returning from the May Day holiday, on May 4, the net value of Huatai Berry CSI Animation Game ETF, Cathay CSI Animation Game ETF and Huaxia CSI Animation Game ETF once again "crossed" 100%. The good times did not last long, and the game sector fell into adjustment.
Until May 24, the sector strengthened again after the correction, doubling based on the reappearance of rivers and lakes on June 5, and the performance of Huaxia, Huatai Berry and Cathay's CSI Animation Game ETF funds exceeded 100% during the year.
After that, the game sector briefly adjusted again, and on June 9, it picked up the rally again, and the anime and game index rose 5.78% on the same day. In the past three trading days this week, the gaming sector has risen continuously, and the net value of related index funds has also continued to climb.
It is worth mentioning that with the rise in net value, game ETFs have received an overall number of funds this year. Data shows that the fund share of Huaxia CSI Animation and Games ETF increased by more than 3.3 billion shares from about 904 million at the end of 2022 to about 4.217 billion shares on June 14, while the fund share of Cathay CSI Animation Game ETF also increased by more than 900 million shares during the same period.
However, the divergence between similar funds is also more obvious. The shares of the other 3 game ETFs did not rise but fell during the same period, all of which decreased to varying degrees.
TMT active funds rebounded
As far as active equity funds are concerned, TMT-related sectors such as game animation and AI have regained their upward trend, driving many funds to fight a "turnaround battle". In the past 20 days, the net value of many funds has rebounded considerably.
From late April to late May, the TMT sector was quite volatile. According to Wind data, from April 21 to May 25, the Wind Artificial Intelligence Index, Wind Digital Economy Index, and Wind Information and Innovation Industry Index fell by 12%, 13.13%, and 13.29% respectively, and the WindTMT Index also fell by nearly 8%.
As sector volatility intensified, the net value of TMT thematic funds previously retreated sharply. As far as active equity funds are concerned, as of April 20, the net value of Sino Analytica's positive return in the heavy semiconductor and information innovation sectors rose by 72% during the year; But by May 25, the fund's net value gain for the year had narrowed to 45.15%.
Similar to this fund, many TMT-related theme funds such as Soochow Mobile Internet, Oriental Artificial Intelligence Theme, China Merchants Sports Culture and Leisure, and Harvest Information Industry have a large drawdown in their net value.
However, from May 25 to the present, the TMT sector has "made a comeback", thanks to which the net value of many funds has risen significantly. In particular, the information media and AI sectors have become the vanguard of the rebound, and the relevant heavy funds have led the range.
Overall, as of June 14, 88 active equity funds have rebounded more than 15% in their net value since May 25, of which 21 funds have increased their net value by more than 20%.
It is worth mentioning that since June, A shares have repeatedly fluctuated around 3200 points, and public funds are also adjusting positions for shares. Wind position measurement data shows that since June, the average position of 3,359 equity-biased hybrid funds (combined with different shares) has risen by 0.37 percentage points to 75.07%, after two consecutive months of decline.
Behind the great changes in the performance of some funds, the overall public offering has indeed increased the allocation ratio of the TMT industry. According to the statistics of Tianfeng Securities, the positions of partial investment funds in electronics, computers, communications, media and other industries increased last week.
Extending the horizon, as of June 14, 28 active equity funds have yielded more than 40% this year. Among them, Yinhua Sports Culture Hybrid yield was 76.88%, followed by Soochow Mobile Internet Hybrid A, Oriental Regional Development, Soochow New Trend Value Line, GF Electronic Information Media Industry Select A, China Merchants Sports Culture and Leisure Stock A, Nord New Life A and other funds, all with a yield of more than 60%.
Investment opportunities are expected throughout 2023
Since the beginning of this year, the technology market has been "menacing", and the market of many TMT subdivisions has continued to rise, but after April, the TMT sector has insufficient momentum and seems to have entered a short period of shock consolidation. Due to the sharp rise in the AI market at the beginning of the year, coupled with the adjustment of the performance guidance of industry leaders and the further catalysis of the industry in late May, the AI-related TMT sector may become one of the main lines of capital attention in the near future.
There is significant disagreement among fund managers on whether they should increase their positions in the TMT sector in the short term. Some fund managers estimate that the sector will usher in a "midsummer offensive" after basically bottoming out in May. In the face of this adjustment in the middle of the TMT year, bargain hunting is the best strategy, because often the subsequent midsummer offensive has a high probability of reaching a new high.
However, some fund managers remain cautious. "From the perspective of sector structure, drawing on historical experience, the strong TMT sector in the early stage still needs time shock digestion to further reduce trading congestion. We will maintain the allocation, but will not retake it. A fund manager said.
Another industry insider pointed out that there are still great challenges for fund managers to invest in the TMT sector, which contains more high-tech companies, its technical threshold is high and the profit model profit prospects are more complex, which greatly tests the judgment of fund managers.
However, in the medium and long term, the investment value of the TMT sector has been recognized by most institutions. Zhu Chenzhe, fund manager of Minsheng Bank of Canada, believes that AI may be driven by the theme to fundamentals. The increment under this round of AI wave may mainly be AI server + AI large model + software application, and the larger amount of data has driven the incremental demand of the data industry chain.
Zhu Chenzhe also believes that the growth rate of technology-style earnings may still have strong upward support factors. The business value of AI has been widely recognized by the industry worldwide, and industry users' cognition of AI value and technology suppliers are becoming increasingly mature in the methodology and practice of AI implementation. With the accelerated development of artificial intelligence industrialization applications, global AI infrastructure spending continues to show a high growth trend.
Ni Ruohong, CITIC Prudential Fund, judged that under the general trend of AIGC, TMT's investment opportunities are expected to run through 2023. Ni Ruohong believes that AI technology is a big wave, not a short-term small theme. This round of AI market is a revolutionary breakthrough in technology, bringing new application scenarios and catalyzing a wide range; At the same time, AI also solves the problem of how to expand production capacity and how to further improve productivity under the condition of limited labor, which can be said to be of great significance.
According to Wind data, as of June 11, public funds surveyed 1,432 A-share companies in the second quarter of this year, exceeding 1,342 in the first quarter.
The top 10 listed companies in the number of company surveys are Desay SV, Kai Kai Medical, Dongxin Co., Ltd., Tianfu Communication, Anjing Food, Haitai Xinguang, Yiheda, Transsion Holdings, Zhongji Xuchuang and Yingjie Electric. Obviously, listed companies in TMT and high-end manufacturing and other sub-industries, which include the strength of "hard technology", are the focus of public fund research.
Wind data shows that compared with the first quarter, the proportion of individual stock industries surveyed by the fund increased by 15, of which 15 industries such as software and services and media increased. The proportion of six industries, including materials, technical hardware and equipment, and capital goods, declined.
This article is from China Fund News