Which assets are the best to invest in 2024?

Which assets are the best to invest in 2024?

According to the results of the survey conducted by the Economic Observer among 100 institutional investors, stocks are still considered to be the most worthwhile assets to invest in, accounting for 46.15%. However, this value has been "halved" compared to 92% in 2023.

Yes, looking back at the trend of the A-share market in the past two years, in 2022, the Shanghai Composite Index will fall by 15.13%, and in 2023, it will fall by 3.7%, and the market has remained sluggish for 2 years.

Looking back at the investment performance in 2023, a private equity fund manager in the southern region lost more than 13% on equity investments. Combined with the allocation income in the bond sector, his overall loss will shrink to 5% in 2023.

So, can you make money investing in 2024? The survey results show that 37.5% of respondents expect 2024 to be similar to 2023, and 34.62% expect 2024 to be easier to earn income than 2023.

After experiencing a downward trend in A-shares in 2023, investors are looking forward to a rebound in the stock market in 2024.

As the Chinese New Year approaches, the above-mentioned private equity fund managers have adjusted their investment allocation strategies for 2024. In 2023, he has maintained a combination of "three shares and seven debts". At present, although the A-share market is fluctuating sharply before the Spring Festival, he still plans to appropriately increase the proportion of his position in the equity market and select public fund targets. In his view, with the market over-falling and the continuous stimulation of policies, the A-share market should rebound in 2024.

CICC believes that although the short-term market is in the bottoming stage, the gradual accumulation of extreme valuations and positive factors, it is still necessary to remain patient with the market outlook, do not need to be too pessimistic, and short-term disturbances will not change the long-term situation, and the allocation opportunities of the market in 2024 are still expected to be better than in 2023.

Economic trends and corporate earnings are in the spotlight

According to the preliminary calculation of the National Bureau of Statistics, the GDP in 2023 will be 1260582 billion yuan, an increase of 5.2% over the previous year at constant prices.

In this survey, 44.23% of the respondents expect the average growth rate of China's domestic market to be 4.5%-5.0% in 2024, 26.92% of the respondents expect the growth rate to be 4.0%-4.5%, 22.12% of the respondents expect the growth rate to be 5.0%-5.5%, and the proportion of respondents who expect the growth rate to be less than 4% and higher than 5.5% are 4.81% and 1.92% respectively.

In addition, 18.27% and 10.58% of respondents respectively believe that global economic changes under the influence of the Federal Reserve's monetary policy and geopolitical conflicts, as well as issues such as the real estate market and local government debt, are the biggest factors affecting A-shares.

Institutional investors are relatively optimistic about the liquidity of the stock market in 2024, with 59.62% of respondents believing that liquidity will remain at a moderate level in 2024, 29.81% believing that liquidity will be abundant, and only 10.58% expecting very poor liquidity.

In this survey, 61.54% of the respondents chose the net profit growth expectation of listed companies in 2024 as 5%-10%, compared with 50% last year, 12.5% chose 10%-15%, 1.92% chose 15%-20%, and only 0.96% of the respondents chose the growth expectation of more than 20%, in addition, 23.08% of the respondents put the growth expectation below 5%.

The National Economic Research Center of Peking University believes that in January 2024, with the coordinated efforts of macroeconomic stabilization policies, the social economy will continue to recover and operate well, and the economic vitality will gradually recover. However, the internal and external environment facing China is still complex and changeable, external demand is relatively weak, the slope of domestic economic recovery has slowed down, domestic effective demand is insufficient, the endogenous recovery momentum of the economy still needs to be strengthened, and the recovery and expansion of demand is still the key to the sustained economic recovery in the future.

Investment income expectations are lower

According to the survey results, respondents' investment income expectations for 2024 are not too high compared to last year. Among them, 51.92% of the respondents expect the return on investment to be less than 10% this year, 43.27% of the respondents expect it to be between 10% and 40%, only 2.88% expect to be above 40%, and 1.92% of the respondents expect to achieve negative returns.

In contrast, 78% of respondents expect investment returns to be between 10% and 40% in 2023, and investors' return expectations will decline significantly in 2024.

In addition, the institutional investors surveyed chose to maintain a high position in 2024. Among them, 25.96% of the respondents said that they would adjust it at any time depending on the specific situation, 7.69%, 21.15%, 30.77% and 10.58% chose to operate with full positions, 70%-80%, 50%-70% and 30%-50% positions, respectively, and only 3.85% chose positions below 30%, but this value has increased from last year.

When asked about their expectations for market returns in 2024, 37.5% of the surveyed investors judged that 2024 would be similar to 2023, 34.62% expected 2024 to be easier to earn than 2023, and 27.88% of respondents believed that it would be more difficult to earn income than in 2023.

In the view of China Merchants Securities, domestic listed companies, especially state-owned enterprises, have more low-valuation high-quality assets, and under the framework of global stock market comparison, the valuation of A-shares is very competitive, and their corporate earnings growth has begun to gradually exceed the growth rate of capital expenditure. Therefore, China Merchants Securities has a more positive attitude towards this round of repair.

Expect the stock market to rebound

According to the results of the survey, 48.08% of the respondents believe that the Shanghai Composite Index will show a shock adjustment throughout the year, with the "V" trend receiving 22.12% of the votes, and only 10.58% choosing the "N" shape. 6.73% of the respondents believed that it was an inverted "N" shape and that it was on the rise throughout the year.

54.81% of the respondents believe that the Shanghai Composite Index will fluctuate between 2,800 and 3,000 points, another 38.46% of the respondents chose 3,000 to 3,500 points, 4% of the respondents believe that it will fall below 2,800 points, and 1.92% of the respondents believe that the Shanghai Composite Index will fluctuate between 3,500 and 4,000 points, and the option above 4,000 points is not chosen.

As for better stock market investment opportunities in 2024, more than half of respondents voted for Q2 and Q3.

In terms of the GEM index, the survey results show that the proportion of respondents who expect the annual shock adjustment is as high as 47.12%, 20.19% of the respondents believe that the GEM index will show a "V" shaped trend, and 9.62% of the respondents believe that the GEM index will show a downturn downward trend throughout the year.

As for the overall trend of the bond market in 2024, 48.08% of the respondents believe that it is stable, 25.96% believe that it is an upward trend, and 21.15% of the respondents believe that the overall trend of the bond market is downward.

In terms of sector investment, institutional investors have a more divided attitude. Among the various industry sectors, the surveyed institutional investors are the most optimistic about technology, communication and media (43.27%), and power (36.54%) and medical equipment, pharmaceuticals and biopharmaceuticals (35.58%) have become the second and third most optimistic sectors for institutions. In 2023, the top three in the survey are new energy and new materials (65%), pharmaceuticals and biopharmaceuticals (52%), and daily necessities and consumer services (51%).

New energy and new materials, which are the most favored by investors in 2023, will only receive 25.96% of the votes in 2024.

From the perspective of industries, the industries that the interviewed institutional investors are optimistic about are military industry, aerospace (33.65%), finance (28.85%), coal (25.96%), new energy (25.96%), 5G, communications (23.08%), petroleum, petrochemical, chemical (19.23%), tourism (17.31%) and infrastructure and utilities (17.31%). It can be found that compared with the data in 2023, the industries that investors are optimistic about are more divergent.

In addition, differentiation is still a prominent feature of institutional investors when making thematic investments. The most optimistic industries are artificial intelligence (54.81%), 5G, chips, cloud computing (51.92%), central state-owned enterprise reform (44.23%), intelligent manufacturing (40.38%), biomedicine, medical health (38.46%), and intelligent driving (25%).

So, what type of stock market performance are institutional investors optimistic about in 2024? According to the survey, large-cap blue-chip stocks are the most preferred among respondents with a proportion of 36.54%, followed by mid-cap high-performing stocks with 32.69%, small-capitalization growth stocks with 21.15%, and asset restructuring and mergers and acquisitions and asset injection, overall listings, and new and sub-new stocks all accounting for only 4.81%.

Guojin Securities believes that on the whole, although there are still challenges in the adjustment of the domestic economic structure, the rebound of the stock market is worth cautious optimism. The main reason for this is that stock prices have already corrected sharply, and it is clear that the stock market has overreacted to macroeconomic challenges in the short term; On the other hand, it is expected that the bond market is expected to continue the upward trend since last year under the scenario of a high probability of rhythmic easing of monetary policy, providing investors with stable investment returns. In the second half of the year, under the expectation that the uncertainty of global political and economic variables may increase, investors can pay attention to the investment window in the first half of the year, and appropriately adjust the risk asset allocation ratio based on the actual situation of individuals.

In 2024, with the release of favorable policies, the above-mentioned private equity fund managers are also paying attention to the rotation changes in popular industries and plan to adjust their position allocation at any time. At the beginning of the year, he hoped that the A-share market would rebound in the Year of the Dragon.

(This group of questionnaires was completed by reporters Hong Xiaotang, Huang Yifan, Chen Shan, Zhou Yifan, Jiang Xin, and Cai Yuekun)