The consumer industry has been falling for three consecutive years, from "Britney" in 2019-2020 to "Mrs. Niu".
The CSI Major Consumer Index and the CSI Consumer Leading Index will fall by 19.22% and 15.33% respectively in 2023, and most of the nearly 200 active and passive funds with the theme of the consumer industry have suffered heavy losses, but there are also 13 funds that have performed well and achieved positive returns in 2023.
Let's take a closer look today.
The chart below is the consumer sector section of Morningstar China's One-Year Fund Performance Rankings released on January 1, 2024.
In 2023, the consumer sector theme funds will achieve positive returns, including 6 index funds and 7 actively managed funds, and the 13 funds that will achieve positive returns will only account for 6.95% of all 187 consumer sector theme funds.
01
Two of the top six index funds are from automotive-related sub-sectors:
GF CSI All-Index Auto Index will achieve a positive return of 7.61% in 2023, with a maximum drawdown of 16.69%, and the current scale is 2.353 billion yuan. Fund manager Lu Zhiming currently manages a fund scale of 13.792 billion yuan.
Cathay CSI 800 Auto & Parts ETF has a yield of 4.27% in 2023, a maximum drawdown of 16.57%, and a current scale of 1.294 billion yuan. Fund manager Huang Yue currently manages 16.857 billion yuan of funds.
I remember that when I investigated Yang Dong, the manager of GF Fund, he talked about a point of view, the next 10 years may be the era of the integration of automobiles and consumer electronics, and many auto brands and the automotive industry chain may eventually be integrated into smartphones similar to those in the past decade. From 2020 to 2030, it may be a big era for the automotive industry and its industrial chain, and the secondary cities should have corresponding performance.
In this regard, the lazy Yangji deeply agrees that the industrial chain related to smart cars should be worthy of long-term attention.
The remaining 4 index funds with positive returns are all related to household appliances in the consumer sub-sector, namely:
Wells Fargo CSI All-Index Household Appliances ETF, GF CSI All-Index Household Appliances ETF, Cathay CSI All-Index Household Appliances ETF and Tibet Dongcai CNI Leading Household Appliances Index.
The latest scale of the China Thailand CSI All-Index Household Appliances ETF and the GF CSI All-Index Household Appliances ETF is 2.507 billion yuan and 798 million yuan respectively, while the Wells Fargo CSI All-Index Household Appliances ETF and the Dongcai Guoxi Leading Household Appliances Index are only more than 100 million yuan respectively, which is relatively small.
02
Let's take a look at the best-performing actively managed funds, 7 of which have achieved positive returns, and Bodao Consumer Intelligent Airlines, which has a return of -0.27%, is unique because of the quantitative strategy it adopts, so let's take a look.
Let's first look at the composition and turnover rate of their consumer sub-sectors since the end of 2022, as detailed in the table below
(Source: Choice data)
Automobiles do not appear in the top three sub-sectors of a fund's holdings, indicating that they are not optimistic.
Household appliances are also only found in the second or third sub-sectors of a small number of fund holdings.
Food and beverage is still the number one sub-sector for most consumer-themed active funds.
Among the fund managers, Yang Siliang of Baoying Fund and Tan Li of Harvest Fund are typical value investment styles, they pay more attention to valuation and cash flow, and have obvious advantages in the bear market.
They also have a low turnover rate, comparable to index funds.
Yang Meng of Bodao Fund is an outstanding quantitative celebrity, and the Bodao Consumer Intelligence Aviation and Growth Intelligence Navigation she manages are respectively benchmarked against the Consumption (Style • CITIC) Index and the Growth (Style • CITIC) Index to do enhanced strategies, and the performance in 2023 is good, the latter has a return of 11.31% in 2023, ranking second among the 232 large-cap balanced equity funds in the Morningstar China One-Year Fund Performance Rankings.
The turnover rate of quantitative funds is usually relatively high, and the turnover rate of Bodao Consumer Intelligent Aviation is 7-8 times.
The AI-empowered quantitative strategy should be an important direction for future asset management, and I think it is worth paying attention to.
03
Finally, let's take a look at the views of these better-performing consumer-themed active funds on the consumer sector and what are their views on the future investment direction in the latest regular report (2023 third quarter report).
1. SPDB AXA Consumption Upgrade Mixed Yang Fulin
When the market does not have a clear main line or non-fundamental trading, the institutional group varieties represented by liquor have become the direction of everyone's priority allocation, although the fundamentals are poor, but the institutions are willing to use Mao-like assets to stabilize fluctuations, which in turn drives the excess returns of the group varieties.
At the moment when the market began to be dominated by research, assets with poor fundamentals and poor valuation matching also became the priority objects of abandonment.
In general, we have maintained the position structure of the past, and only made some adjustments to some sectors, further reducing the assets related to consumption upgrades, and increasing the allocation ratio of the bottom sector.
The future sector with allocation value may not be the direction of consumption upgrading recognized by the public in the past, but the direction of consumption cost performance led by research, the so-called cost performance does not mean no money and no consumption, but represents the formation of a more rational consumption behavior Xi.
2. Baoying brand consumer stocks, Baoying consumption theme mix Yang Siliang
During the quarter, the Fund's holdings remained stable as a whole, and based on the defensive thinking of potential risks at the end of the global economic interest rate hike, the Fund reduced its holdings in external demand-oriented companies such as small household appliances and textiles and garments, and increased its holdings in vehicle targets with rapidly increasing competitiveness and the leading aquaculture industry leaders that gradually moved from growth to value.
3. Morgan healthy quality life mixed with Xu Xiangnan
In terms of sectors, we are optimistic about the two main investment lines of consumption and technology, and the Fund continues to be optimistic about and hold high-quality companies in various sub-sectors that benefit from consumption upgrades.
4. Harvest New Consumer Stock Tan Li
Q3 ...... The macro economy is in the second half of the production capacity cycle, and it is difficult for policies to effectively boost the economy, and defensive assets with high dividends still have high allocation value.
At the same time, we must also see that the macro economy is likely to be at the bottoming stage...... Whether the real estate industry can recover in the future will become the key to whether the economy can stabilize and rebound, combined with the ROE of the overall market at the bottom, it tends to believe that there will be structural opportunities in the future.
As a consumer sector fund, we insist on a balanced allocation within the large consumer sector.
We believe that the valuation attractiveness of home appliances, textiles and apparel and light industry is acceptable, so we have more allocation in the portfolio, we have increased the allocation of aviation services, mainly optimistic about the improvement of the industry competition pattern to drive the improvement of corporate profitability, as a portfolio of the consumer industry, we have less allocation to food and beverage, with the correction of stock prices, we will also actively look for suitable targets in food and beverage and liquor in the future to make the portfolio more balanced.
5. Qianhai Open Source Shanghai-Hong Kong-Shenzhen Agricultural Mix Liu Hong and Wu Guoqing
Grassroots research shows that the pig industry continued the trend of de-production capacity in the third quarter.
The fund is a thematic fund, which has carried out a centralized allocation in the livestock and poultry industry chain, and strives to grasp the company's cyclical and growth opportunities.
6. E Fund's state-owned enterprise reform mixed Guo Jie
The Fund's investment objective is to achieve stable returns over the medium to long term.
We are committed to finding things with high certainty and turning them into solid returns.
A good business model and a company with outstanding competitive barriers are the two core dimensions of our search for certainty.
Market volatility creates good opportunities for us to invest in quality companies, and we tend to make contrarian decisions over the longest possible investment horizon.
The Fund's investment decisions will be based on the above framework and will not change due to market fluctuations and changes in style. In the third quarter, the shareholding structure of the fund did not change much, mainly distributed in food and beverage, petroleum, coal, banking, transportation and other fields, with a high concentration of individual stocks.
The assets in our portfolio today offer excellent value for money and meet our stringent requirements for certainty and sound bidding. We are confident in the future performance of the group and time will be our friend.
7. Bodao Consumption Zhihang Yang Meng
From the perspective of factors, the performance of various types of factors in the third quarter was again differentiated, and the fundamental momentum factors did not usher in the traditional market in the third quarter, while the volume, price and value factors continued to perform well.
Under the relatively balanced factor weight allocation of Bodao's "Index +" series products, the excess retraced in July, and the excess return was generally restored in August and September.
Since the second quarter of this year, the Bodao quantitative team has carried out the research and development of the AI full-process investment model, and has been successively used in various quantitative products since the third quarter to form a certain differentiation and complementarity with the model under the traditional framework.
During the Reporting Period, the Fund maintained the allocation of the CITIC Consumer Style Index Multi-Factor Stock Selection Enhancement Model, and the product slightly underperformed the performance benchmark during the Reporting Period.
In the short term, the market expects that the revenue of listed companies has been revised to a record low, profits have also been revised to near the bottom of the previous cycle, and valuations have also been revised to the cheaper bottom, and there should be no more excessive pessimism in the current position.
Past performance of funds and indices is not indicative of future performance, and fund review does not constitute investment recommendations.
All views and funds involved in this article do not constitute investment advice, and investment in the market is at your own risk.