"Private Equity Witch" speaks: A-shares are facing a big opportunity once in 20 years, and the blockbuster meeting sets the tone, and the time has come for core asset allocation?
2023 is coming to an end, how is everyone's harvest this year? The winner does have strength, and there is no need to be discouraged by negative returns.
The A-share core broad-based CSI 100 ETF fund (562000) holds the core leading stocks of the top 100 A-share industries, which can comprehensively reflect the overall performance of core assets. It can be seen from the daily trend that since the beginning of the year, the price of the CSI 100 ETF fund (562000) has fluctuated downward, and the intraday price has fallen from the highest 1.008 yuan on January 30 to 0.788 yuan on December 11, and as of December 12, it has fallen nearly 11% during the year.
Image source: Wind
Realize that the past is not admonished, and those who know the future can be traced. After a year of dormancy after the epidemic, can A-shares show their style again in 2024?
[A-share fundamentals are expected to improve further]
The stock market is a barometer of the economy. To discuss the trend of A-shares in 2024, we need to return to economic fundamentals.
From December 11 to 12, the high-level economic work conference made a comprehensive plan for economic work in 2024. The meeting proposed to "adhere to the principle of seeking progress while maintaining stability, promoting stability through progress, and establishing first and then breaking down", and also proposed that "it is necessary to strengthen the counter-cyclical and cross-cyclical adjustment of macroeconomic policies, continue to implement active fiscal policies and prudent monetary policies, and strengthen the innovation and coordination of policy tools". Industry insiders believe that next year's macro policy will maintain continuity and stability, which will help improve social expectations and boost market confidence.
The previous blockbuster meeting held on December 8 judged the economic situation in 2023 to be "picking up". Different from 2022's "maintaining overall economic and social stability" and 2021's "maintaining a global leading position in economic development", the judgment of "rebounding for the better" explains that the mainland economy is in a positive recovery stage, and the basic trend of long-term improvement has not changed.
Under the overall positive policy tone, institutions generally believe that the mainland economy will continue to repair in 2024, which will help the recovery of the earnings elasticity of outstanding listed companies and the restoration of stock market confidence. Li Bei, the founder of Banxia Investment, known as the "private equity witch", said in his latest speech that the A-share market may face a big opportunity once in 20 years, and the next ten years will be a big process of asset revaluation, facing the pattern of the United States in the 50s of the last century and Japan around the 80s.
[2024 core assets or the first to counterattack]
The positive factors facing A-shares are increasing, and the investment opportunities in fully adjusted core assets are worth paying attention to. The core assets of A-shares are composed of core leading stocks in various industries, and in the process of economic recovery, industry leaders are expected to take the lead in recovering their performance by virtue of their resource endowment and operational resilience.
Huatai Securities said in its 2024 annual strategic research report that the stabilization of Sino-US economic and trade relations in the next six months may bring opportunities for core assets to take the lead in counteroffensive, and from the second quarter of 2024, it may be able to grasp the relay reversal opportunity of large-cap growth stocks.
From the perspective of market style, the current A-share large- and small-cap style differentiation is close to the historical extreme, and the weakness of the large market has lasted for nearly three years.
From the perspective of valuation, most of the core leading stocks in the A-share industry have fallen to a relatively low historical level, and the allocation is cost-effective, and there is a large room for valuation repair in the future. Taking the constituent stocks of the CSI 100 Index tracked by the core broad-based CSI 100 ETF fund (562000) as an example, as of December 12, 18 of its top 20 constituent stocks were valued below the time range of more than 50% in the past five years, of which 15 stocks such as Kweichow Moutai, Ping An of China, CATL, China Merchants Bank, Midea Group, and Zijin Mining were valued at the bottom range of the past five years.
Source: China Securities Index Company
[The "right posture" for investing in core assets]
The process of economic recovery is not a smooth road, and the road to the bottom and upward of A-shares is likely to be twists and turns. Under the expectation of structural market and accelerated industry rotation, it is necessary to avoid industry risks, efficiently grasp the potential opportunities of core assets, and take advantage of the core broad-based layout to win a higher rate.
Specific investment tools such as the CSI 100 ETF Fund (562000), the CSI 100 Index tracked by the ETF brings together the core leading stocks of various A-share industries, with a balanced industry allocation, taking into account blue-chip value and emerging growth, and fully reflecting the overall performance of A-share core assets.
Compared with large-cap blue-chip broad-based indices such as SSE 50 and CSI 300, the CSI 100 Index has a greater weight in the new economy sector, stronger profitability and higher growth attributes. Taking the 2022 annual report as an example, the growth and profitability indicators such as revenue growth, net profit growth and ROE of the CSI 100 Index are significantly higher than those of the SSE 50, CSI 300 and CSI All Index.
The data comes from Wind, as of 2022.12.31
According to the statistics of the Shanghai and Shenzhen Stock Exchanges, there are currently 10 ETF products linked to the CSI 100 Index in the two cities, among which the CSI 100 ETF Fund (562000) has the best liquidity.
The pictures and data are from the Shanghai and Shenzhen Stock Exchanges and Huabao Fund, as of December 12, 2023. Note: According to the statistics of the Shanghai and Shenzhen Stock Exchanges, as of the end of November, the average daily turnover of the CSI 100 ETF Fund (562000) in the past year was 47.82 million yuan, which was the most liquid among the 10 ETFs tracking the CSI 100 Index in the whole market during the same period. Risk Warning: The underlying index of CSI 100 ETF is CSI 100 Index, the base date of the index is 2005.12.30, and the release date is 2006.5.29, and the composition of the index constituents will be adjusted in accordance with the rules of the index compilation. The index constituents in this article are for illustration purposes only, and the individual stock descriptions are not intended as investment advice of any kind, nor do they represent the position information and trading trends of any fund under the manager. The risk rating of the Fund assessed by the fund manager is R3-medium risk, which is suitable for investors with an appropriateness rating of C3 or above. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, any form of expression, etc.) is for reference only, and investors shall be responsible for any investment behavior determined independently. In addition, any opinions, analysis and forecasts in this article do not constitute any form of investment advice to the reader, nor do they assume any responsibility for any direct or indirect losses arising from the use of the content of this article. Fund investment is risky, the past performance of the fund is not indicative of its future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of the performance of the fund, so fund investment should be cautious.