Recently, the first quarter report of the public fund in 2024 has kicked off, and the latest status and position adjustment of the products of many companies such as UBS SDIC Fund and Zhonggeng Fund have been revealed. Judging from the recently released quarterly report, in the context of the shock adjustment in the first quarter, most active equity fund products still maintain a high proportion of equity asset allocation.
On the whole, in the context of the sharp amplification of market volatility in the first quarter, most of the scale of active equity funds has "shrunk" to varying degrees, and the operating state has also lost more than profit. However, at this point in time, many fund managers are optimistic about the future performance. Qiu Dongrong, deputy general manager and chief investment officer of Zhonggeng Fund, believes that the adjustment time and magnitude of equity assets are long and large enough, the valuation level is low and the risk compensation is high, and the risk of intertemporal investment is low, which has a strong right-biased distribution characteristics, and is the most risk-worthy type of asset.
Equity funds have mostly "shrunk"
A few days ago, the five products managed by Qiu Dongrong, a 10 billion fund manager, disclosed the latest quarterly report data. According to the data, as of the end of the first quarter of 2024, the total scale of Qiu Dongrong's funds under management was 19.854 billion yuan, a decrease of nearly 40% compared with 32.013 billion yuan in the same period last year. In the first quarter of this year, due to the poor performance of the products due to the redemption of the products, the scale of the products under management declined to varying degrees, with a total decrease of 3.929 billion yuan in a single quarter.
Wind data shows that as of the end of the first quarter, the cumulative return of Zhonggeng Hong Kong Stock Connect Value 18 months closed this year was -12.04%, and the annual loss of 4 products, including Zhonggeng Value Smart Flexible Allocation, Zhonggeng Small Cap Value, Zhonggeng Value Pilot, and Zhonggeng Value Quality One-year Holding, was between 2.63% and 5.86%.
Taking Zhonggeng Value Pilot, the longest-running and largest management time of Qiu Dongrong, as an example, the fund's stock market value in the fourth quarter of 2024 decreased by 1.25% to 92.81% of the fund's net asset value, and at the same time, it increased its allocation to Hong Kong stocks, with the proportion of Hong Kong stock positions in equity positions increasing to 44.87% from 44.16% at the end of the fourth quarter of last year, compared with 46.9% in the same period last year.
According to the quarterly report, the first financial reporter found that Qiu Dongrong made some adjustments to the top ten heavy stocks of the fund in the first quarter, among which Kuaishou-W (01024.HK) and Meituan-W (03690.HK) returned to the top ten heavy stocks, accounting for 3.94% and 2.84% of the fund's net asset value respectively 603283; SH) became the second largest heavy stock, with a 10.32% increase in shareholdings month-on-month.
In terms of reducing positions, China Hongqiao (01378. HK) remained the fund's largest heavy holding, but its holdings decreased by as much as 34.62% QoQ, while Xpeng-W (09868.HK) reduced its position by 20.09% QoQ. In addition, Qiu Dongrong also made three consecutive quarters of Shenhuo shares (000933. SZ) to reduce its holdings, at the end of the first quarter, Shenhuo shares, which have been heavily held for six consecutive quarters, withdrew from the top 10, and Goertek shares (002241.SZ) were withdrawn during the same period.
A similar situation has also played out in other tens of billions of fund managers. For example, Shi Cheng, the fund manager of UBS SDIC Fund, is currently in charge of 7 funds, and 6 of them have disclosed their latest quarterly reports. According to the data, his scale under management has fallen to 12.057 billion yuan, compared with 24.716 billion yuan at its peak. This is mainly due to the continuous adjustment of its heavy position in the new energy sector, and the product performance is naturally difficult to be optimistic.
Wind data shows that excluding products that have not yet released quarterly reports, the average decline of the remaining 6 fund products (only Class A is calculated) in the first quarter of this year was 8.56%, and the average loss as of April 16 has exceeded 10%. And in 2023, these 6 products will fall by more than 30% on average for the whole year.
It is worth noting that the four products established before 2022, namely UBS SDIC Industrial Trend A, UBS SDIC Advanced Manufacturing, SDIC UBS New Energy A, and SDIC UBS Jinbao, have all recorded losses for three consecutive years. As of April 16, the above products have all fallen by more than 55% since 2022.
According to incomplete statistics from Yicai, as of the close of trading on April 17, there were 24 active equity products (different shares combined, only Class A are calculated, the same below) that have disclosed the latest quarterly report, and the total fund size has decreased by 6.87 billion yuan. On the whole, seventy percent of the fund scale of the products has shrunk to varying degrees, of which Ruiyuan Growth Value decreased by 1.983 billion yuan in a single quarter, while the largest increase in the scale of CEIBS Dividend Preferential increased by 1.247 billion yuan in the same period.
Positions remain high
Looking back on the first quarter of this year, the A-share market showed a "V-shaped" trend, with the Shanghai Composite Index starting a rebound upward trend after hitting a four-year low of 2,635.09 points on February 5, and then fluctuating around 3,050 points. According to the data, the Shanghai Composite Index, Shenzhen Component Index, and CSI 300 were mixed, with quarterly gains of 2.23%, -1.3%, and 3.1%, respectively, and as of the close of trading on April 17, the figures were 3.24%, -1.5%, and 3.91% respectively.
Market fluctuations make it more difficult to make money. Wind data shows that among the 24 active equity products mentioned above (including common equity, partial stock hybrid, balanced hybrid, and flexible allocation funds), only 7 funds achieved positive returns in the first quarter, and the gap between the highest and the bottom has been nearly 23 percentage points.
The reporter noted that although the market is quite volatile, most active equity fund products still maintain a high proportion of equity asset allocation. Among the above-mentioned active equity products, the average stock position in the first quarter has reached 89%, of which 7 percent of the products have a stock position of more than 90%, and the overall position operation remains high.
For example, in addition to the 89.9% stock position of Zhonggeng Value Smart and Flexible Allocation co-managed by Qiu Dongrong and Wu Chenggen, the stock market value of the remaining four independently managed products accounts for more than 90% of the fund's net asset value. Among them, the 18-month closed stock position of Zhonggeng Hong Kong Stock Connect has reached 99.79%, which is close to full.
Overall, many well-known fund managers in the industry maintained 90% of their positions in the first quarter. For example, the stock position of SDIC UBS Industrial Trends, SDIC UBS Advanced Manufacturing, and SDIC UBS New Energy managed by Shi Cheng remained above 94% in the first quarter, while the three-year equilibrium value of Ruiyuan managed by Zhao Feng was 90.15%.
In addition, the same is true for some of the top performing fund managers. For example, the stock positions of products such as CEIBS Dividend Preferential A managed by Lan Xiaokang and Soochow Mobile Internet A managed by Liu Yuanhai also remained above ninety, and the cumulative returns of these two products in the first quarter were 10.86% and 8.08% respectively.
However, judging from the product operation of the quarterly report that has been disclosed, equity products have lost more than they have made profits, only 7 of the 24 products have made money, half of them have lost more than 100 million yuan, and the total loss of fund profits in a single quarter has exceeded 4.2 billion yuan. Among them, the fund profit of two products, such as Sino-European Dividend Preferential and Soochow Mobile Internet, exceeded 100 million yuan, while Ruiyuan Growth Value lost the most, with 1.538 billion yuan.
How to look at the market outlook
In addition to the rebalancing path and operating conditions, fund managers also elaborated on their understanding and views on the market environment, the tracks they tracked and the market opportunities in their quarterly reports, especially on market hot sectors such as dividends, high dividends, and artificial intelligence. In the current volatile market, the layout direction and interpretation of fund managers are also important highlights of the quarterly report.
"In the context of transformation, debt, geopolitical and other challenges, the economy or market is not stable, the current equity assets are facing higher uncertainty, and the pessimistic factor is reflected in the higher risk premium compensation. Qiu Dongrong believes that the country, enterprises and individuals are constantly adjusting to adapt to changes or taking the lead, looking for order in chaos, and the important thing is to effectively allocate exposure to take risks correctly and obtain excess returns by continuing to tap investment opportunities.
Qiu Dongrong said that based on the low-valuation value investment strategy, the conclusion is clear and progressive: first, equity assets are a systematic and strategic allocation position, and further is to pay attention to structure, and prefer companies that meet the characteristics of "tight supply, new demand, low valuation, high earnings growth or high elasticity". In addition, the long-term return of a high-dividend strategy is biased towards beta and is not a low-risk strategy, and the investment is more important about fundamentals and pricing.
"Generally low valuations, broad distribution of opportunities, investing in companies with continued improvement in fundamentals and the potential for high growth and high resilience in profitability over the next phase. At the same time, growth stocks that seemed to be dreams and stories in the past, but now have great prospects and are emerging deserve more attention. In his view, the most important factor determining the return on capital is not demand, but supply, and the competitive landscape determined by the supply structure.
However, in view of the stability of high dividends, Qiu Dongrong gave a reminder and warning. He explained that the high return of a high dividend strategy is likely to come from the combination of other factors, but investors like to continuously strengthen successful strategies and prefer linear trading, while ignoring the accumulation of real risks, such as cycles, growth, capital supply or innovation, which will challenge the stability of high dividends.
Shi Cheng believes that the economic recovery in the first quarter has gradually started, many commodities have begun to pick up, and the capacity utilization rate of the manufacturing industry on the demand side has also increased. Although the market's expectations for recovery are not high, it is observed and predicted that a new round of economic upswing and industrial cycle is on the way. High-quality companies are gradually emerging from low valuations and gaining valuation premiums, which have a high probability of occurring in the next two years.
Talking about the areas he invests in, Shi Cheng said that it is expected that the supply and demand structure will continue to improve in the future. "The profitability of most links has bottomed out, and even the profitability of some links has begun to recover. Especially in the context of industry surplus, the profitability of leading companies is still excellent, and it is expected that in the future, these companies will first increase their market share and then improve their profitability. He said.
At the same time, Shi Cheng also expressed a certain optimism about the new energy track that has been adjusted for a long time. He believes that the performance growth industry represented by new energy, after experiencing a lower expected valuation in 2022 and a decline in earnings in 2023, we judge that the overall profitability of the industry has come to an end, and the acceleration of demand is also on the way, and we are optimistic about companies that can deliver growth from 2024 to 2025.
As a fund manager focusing on the dividend sector, Lan Xiaokang also shared his interpretation of the current popular sectors in the quarterly report. In his view, from the asset map of the whole society, dividend stock assets are attractive, and the value of dividends will be more important in the value of the stock market.
"Against the backdrop of declining risk-free returns, dividend assets deserve a lot of attention. Lan Xiaokang believes that high-quality growth requires a healthy business model and value chain ecology as the foundation, and the era of over-reliance on debt and financing is slowly passing away. In addition, the high price and high profitability of the resource sector are expected to be maintained in the long term.
As far as the investment direction is concerned, Qiu Dongrong said that he will pay specific attention to three major directions, one is the pharmaceutical, Internet stocks and smart electric vehicles and other technology stocks with strong business growth attributes and large future space; but the value stocks with high growth or profit elasticity on the supply side and high growth or profit elasticity, such as resource companies represented by base metals; and the third is cost-effective companies with room for demand growth and competitive supply advantages, such as machinery, electronics, pharmaceutical manufacturing, power equipment and new energy, agriculture, forestry, animal husbandry and fishery industries.
Lan Xiaokang said that the market remains relatively optimistic, investors' risk appetite is still low, and the economic recovery is expected to enhance the consumption willingness of the whole society and the risk appetite of investors;
(This article is from Yicai)