Is something wrong with the growth style

Today (2023.12.27) the market finally shows signs of stabilization, the Shanghai Composite Index and the ChiNext Index both closed in the red, however, the Shanghai Composite Index is obviously stronger, the Shanghai Composite Index closed up 0.54% at 2914.61 points, and the ChiNext Index closed flat at 1809.83 points;

However, the trading volume is still relatively sluggish, with a total turnover of 652.7 billion yuan in Shanghai, Shenzhen and Beijing (Wind, 2023.12.27).

Dividing investment styles into growth and value is a more common classification;

The rotation between styles is also an important topic that has been studied and analyzed by the market.

Judging from the performance of the Shanghai Composite Index and the ChiNext Index today, it is quite a bit of a sense that the value style is prevalent, so has the growth style encountered any problems? Will the growth style come back in the future?

Let's take a look at it.

Let's start with the CSI 300 as a representative index of the value style and the ChiNext index as the representative index of the growth style, and compare their performance in the same time period.

First, the growth style has been adjusted for more than 2 years, and the value style has not performed well

创业板指月K线，2016.01.29---2023.12.27（Wind）

Judging from the chart above, the growth-biased GEM index has been adjusted for nearly 30 consecutive months since it peaked in July 2021, more than 2 years (GEM index (399006.SZ) change: -49.16%, Wind, 2021.07.22-2023.12.27).

And what about value style?

沪深300月K线，2016.01.29---2023.12.27（Wind）

Judging from the chart above, the value-oriented CSI 300 has been adjusted for a longer time, peaking in February 2021 and has been adjusted for nearly 34 consecutive months (CSI 300 (000300.SH) change: -42.55%, Wind, 2021.02.18-2023.12.27).

Therefore, this time the market adjustment, in terms of value and growth classification, can be said to be a mud and sand.

2. Compare the trend of the CSI 300 and ChiNext from a historical perspective

沪深300VS创业板指周K线,2010.05.30---2023.12.27(Wind)

Here we take the CSI 300 as a representative index of value style and the ChiNext index as a representative index of growth style, and compare their performance in the time period from August 2010 --- December 2023.

We will not compare the specific points, just from the graph, we can see that in the unified start and end time, the GEM index performs better, with two main characteristics:

1. Greater flexibility.

From the lowest point of 585.44 points in December 2012 (Wind, 2012.12.04) to the highest point of 4037.96 points in June 2015 (Wind, 2015.06.05), the increase was about 5.90 times, an astonishing increase (Wind, 2012.12.04-2015.06.05), and the magnitude of the adjustment was also staggering, and in the subsequent adjustments, until the lowest point of October 2018 was 1184.91 points (Wind, 2018.10.19), the decline was also staggering, reaching about 70.66%（Wind，2015.06.05-2018.10.19）。

2. The increase is even greater.

Even after a decline of 29.37% in 2022 (Wind, 2022.01.04-2022.12.30), 2023 (as of the close of trading on December 27) is down 22.88% (Wind, 2023.01.03-2023.12.27), at the same time, the GEM index is still significantly ahead of the CSI 300 in the end, not a little, you can compare it yourself, or you can enlarge the screenshot I sent, I won't look at it specifically, time is tight.

3. So which directions performed better in the same period?

So what are the characteristics of the index that has performed better since the market correction since February 2021?

1. Dividend index.

Taking the dividend low volatility as an example, this sub-index fell by 1.90% in 2022 (Wind, 2022.01.04-2022.12.30), and closed up 5.49% as of December 27, 2023 (Wind, 2023.01.03-2023.12.27). The passive index funds tracking this index have also grown rapidly, from 917 million in 2022 to 5.646 billion (Wind, 2023.12.27).

截图来自Wind2023.12.27

2. Microdisk strategy.

For example, the CSI 100 also fell by 15.12% this year, and the CNI 2000 also fell by 4.54% (Wind, 2023.01.03-2023.12.27);

The micro-cap strategy is effective and mainly reflects individual stocks.

Fourth, the current question, will the growth style come back?

Back to the last topic, what do you think about the growth style? Will the growth style come back?

As far as the current situation is concerned, it must be clear that we have now entered the stage of high-quality development, and many industries have matured, which means that on the one hand, the country is no longer blindly pursuing the growth of quantity and numbers, but must pursue the improvement of quality;

On the other hand, from an objective point of view, most of the industries have now developed and matured, and will show the characteristics of more concentrated and powerful leaders.

From this point of view, we can't think about investment from the perspective of value and growth style, but should consider more about the direction of dividends that are stable and can give investors real dividends, right?

Will this be a long-term trend in the future? Do we need to consider industry factors at the same time? For example, consumption dividends, pharmaceutical dividends, state-owned enterprise dividends, and whether Hang Seng Technology is another dividend index?

However, one thing is certain, that is, some emerging industries, the probability still depends on the growth style, and the NASDAQ has given us enough reference;

In our A-share market in AI and even the entire hard technology sector, we really don't have a listed company that is strong enough to form a leading advantage;

The same is true in the field of biotechnology, and the second entrepreneurship in the Internet field is also the trend of the future, and there is still a lot of room and growth in these aspects.

In the end, the answer is still left to everyone, do you think there is still a chance for the growth style, and will it come back?

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Tips: This article does not constitute investment advice, the market is risky, and investment needs to be cautious.

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