At the "2023 Snowball Carnival" held recently, a number of industry insiders from brokerages, funds, asset management and other industries discussed topics such as the macroeconomic outlook for 2024, the investment situation of the A-share market, and the current rise of index investment and quantitative investment.
Industry insiders said that positive factors in the dimensions of investor sentiment, valuation and policy are accumulating and emerging, and all parties are optimistic about the potential of macroeconomic recovery and the investment value of the A-share market, including AI, chips, etc., the "hard technology" sector is especially focused on by institutions.
Optimistic about the potential for macroeconomic recovery
For the macroeconomic situation this year, a number of industry insiders said that the most pessimistic moment has passed, a number of positive factors are accumulating and emerging, and it is expected that economies of scale are expected to become new growth points in the future, and short-term investment will also effectively stimulate the economy.
"When the market is bad, people tend to be pessimistic, but they ignore some fundamental factors. Regarding the prospects for economic development, Peng Wensheng, chief economist of CICC, said that in the new development stage, considering the three important factors of de-globalization, digital economy and green transformation, economies of scale may become a new growth point for China. Taking green transformation as an example, China's green industry is currently in a leading position in the world, and the main reason for its successful development experience is precisely because of China's economies of scale and large manufacturing system.
"The domestic economy recovered rapidly in the first quarter of this year, and then the economic growth slowed down in the second quarter due to the large drag on the real estate market and the lower-than-expected export growth, and the economy showed signs of stabilization in the third quarter in the context of the continuous introduction of stable growth policies such as RRR cuts, interest rate cuts, and optimization of real estate. Xu Meng, executive general manager and fund manager of the quantitative investment department of China AMC, said, "Looking forward to next year, from the perspective of economic growth, real estate-related policies will continue to be positive, and residents' confidence is expected to be restored." After the real estate stabilizes, it will be a greater support for the stabilization and upward movement of the entire economy. ”
"At present, the mainland needs to balance the pressure of economic growth, economic transformation, and the lack of investment or effective demand for investment in the short-term economy. Looking forward to 2024, the role of investment in stimulating the economy will be more significant and prominent in the short term. Yang Xinbin, investment director and fund manager of Xueqiu Asset Management, said that the mainland is currently in a period of economic transformation, and the economy has shown a gradual recovery trend since the beginning of this year. The high-quality transformation of the economy, as a goal of a longer cycle, will not change.
"All economies have cycles, they all bottom, and now it may be at the bottom. Hong Hao, partner and chief economist of Sirui Investment Group, said that the current RMB exchange rate has begun to repair significantly, which reflects capital flows to a certain extent, and more people have begun to buy RMB, which also means that the direction of capital flows is likely to change.
Indexation and other emerging investments are in the ascendant
With the continuous growth of China's economic aggregate and the steady upgrading of its industrial structure, the mainland's capital market system has become increasingly sound. Emerging investment methods, including indexed investment and quantitative strategies, have entered a stage of vigorous development, and investor participation has been increasing.
"There is huge room for indexed investment strategies in China's capital market, and core broad-based index funds are a fundamental tool for investors to share the fruits of long-term economic growth. Lin Weibin, general manager of the index investment department of E Fund, said that from a long-term perspective, the growth of the index is mainly driven by the earnings growth and dividend income of listed companies, but the short-term valuation change is also very important, and it is very difficult to accurately judge the valuation because it contains factors such as investor sentiment and is full of randomness. Overall, however, valuations have been on the verge for a long time.
Anny Liu, head of Nasdaq's investment intelligence business in China and Singapore, also suggested that investors should make good use of the index, especially in industries with high investment thresholds such as chips and AI.
In recent years, quantitative investment has gradually become well-known to public investors, and the scale of related funds has also grown rapidly. Yao Jiahong, general manager of the quantitative investment department of Guojin Fund, believes that quantitative products can help achieve low volatility and stable returns on investment. According to her, the bottom layer of quantitative products is determined by the strategic framework, and through machine learning Xi predict the excess returns, style rotation, industry rotation and hot spot rotation of individual stocks, plus multi-strategy framework, which together constitute the underlying investment ideas of quantitative products. In recent years, quantitative investment has been increasing in terms of machinery, computing power, and talents, which is more accurate and effective than other investments. Judging from the world trend, the proportion of quantitative investment is also slowly increasing.
The "hard technology" sector may become the main line of investment
Although the overall performance of the A-share market in 2023 is relatively sluggish, considering the positive factors in various areas such as policy, valuation and investor sentiment, institutional outlook for 2024 is generally optimistic.
"The current policy package is sufficient but has not yet been implemented, and it is in the stage of stockpiling ammunition, and once the policy is in place, the effect will exceed expectations. Now that the market is basically in the pre-dawn period, the beginning of next year is expected to be an important point of change. Li Bei, founding partner and fund manager of Banxia Investment, said that it is expected that at the beginning of 2024, various institutions will start a new round of asset allocation, re-evaluate the cost performance of various assets, and a batch of "smart money" may re-enter China.
"From the perspective of investor sentiment, valuations and policies, we believe that the room for another downward correction of the market is relatively limited. Wu Weizhi, chairman and chief investment officer of CEIBS, also expressed optimism about the market next year.
From the perspective of the industry, the "hard technology" sector, including AI and chips, has become the main line of investment that institutions are generally optimistic about. At the same time, after several years of adjustment, excellent companies in the field of new energy and other fields with low valuation levels are also attracting attention.
"The innovation ability of enterprises provides the supply capacity, the ability to increase the proportion of the cake in the global industrial chain, and the demand capacity is the ability to make the cake bigger, and the increase in demand can bring about the development of the industry, and together they determine the fundamental profitability of the sector or company. Wang Lele, ETF investment director of the quantitative investment department of Wells Fargo Fund, said that the future is optimistic about the industrial development brought by the three major science and technology fields: first, the intelligence of automobiles, which is also a relatively clear track in the development of "hard technology"; second, the development of the data industry and the improvement of enterprise operating efficiency; third, the possibility of the market exceeding expectations brought about by the improvement of the innovation ability of central enterprises.
"The downstream of the chip industry includes communications, computers, new energy and other industries, and the current hot computer fields such as digitalization, intelligent driving, industrial Internet and other chip market demand accounts for about 30%. The proportion of pure artificial intelligence chips is not high for the time being, but the proportion of artificial intelligence demand for chips will definitely increase greatly in the future. Liang Xing, assistant general manager and director of the quantitative investment department of Guotai Fund, said that the current chip industry is in a bottom-up cycle, and the consumption of electronic products may return to the upward cycle next year, which will also drive the demand of the entire chip industry to rise.
For the AI sector with high market attention this year, Wu Weizhi said that the current AI+ industry is similar to the Internet + industry in the past, and the impact of AI technology on traditional industries will bring many good investment opportunities. For the field of new energy, he believes that with the further development of the industry, the continuous increase in penetration rate will be a high probability event. After the cyclical high around July 2021, the characteristics of the bottom of the current new energy industry cycle have slowly emerged, and we are optimistic about the excellent companies in the industrial chain.
"The mainland is in a leading position in the world in terms of manufacturing, and the automobile manufacturing industry has a comparative advantage in the world, both in terms of quality, volume, efficiency, etc. Xu Yida, general manager and fund manager of Xiangcai Fund Research Department, also said that at present, new energy vehicles are a track that cannot be missed by active equity. China's new energy vehicle manufacturing capacity is being exported to the world, and from the perspective of supply and demand, new energy vehicles are still on the upward trend in the current market, which is very scarce. (Reporter Luo Yishu reports from Guangzhou)