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After the disclosure of the first quarterly report of the fund, when the company's research office studied the first-quarter performance of various products under the Wells Fargo Fund, it was found that in addition to Zhu Shaoxing, the "evergreen" of the public fund, there are also a number of fund managers with outstanding performance but "small and beautiful" management scale, and Liu Lili, whose investment style is biased towards value, is one of them.
According to Ant Fortune data, as of now, Liu Lili's investment tenure is 5.8 years, the scale under management is about 5.7 billion, and the annualized return is 19.01%.
Among them, the management scale of Wells Fargo Research Select managed by Liu Lili exceeds 5.2 billion, and the proportion of institutional holdings is as high as 81%, which is about 4.5 times that of individual investors.
At the beginning of 2024, Liu Lili launched a new fund, Wells Fargo Value Discovery Blend, which returned 7.17% from the fund's inception on February 6 to April 8.
In the current market situation, Liu Lili's new fund has relatively good returns. However, the size of the rich country value discovery mix is only 314 million.
Judging from the holder structure selected by Wells Fargo Research and the scale of the value discovery of the new fund Wells Fargo, this may be due to the restraint of Wells Fargo and Liu Lili.
However, there is another possibility, Liu Lili is a fund manager who is not well known to the market and individual investors.
Let me take you to take an in-depth look at this fund manager, and observe its long-term detailed story from multiple angles, hoping to help friends.
01. After 14 years of research, it is too late to invest?
As a fund manager, Liu Lili has less than 6 years of management experience.
However, if you count the previous 14 years of research career, Liu Lili has nearly 20 years of experience in the securities industry.
Most fund managers are transferred from researchers, but it is rare to become a fund manager after 14 years as a researcher.
When she saw that many friends who had entered the industry together had switched from research to investment, Liu Lili also asked herself, "Do you want to switch to investment too?"
The following story also reflects Liu Lili's non-blind obedience.
It is said that in high school, Liu Lili was a member of the basketball cheerleading team in her class. However, when her classmates crowded into a line to cheer and shout, she ran to the other side of the court where there were fewer people to cheer for the class.
Liu Lili's behavior of staying away from the group was considered "unsociable" by some classmates, but she said that she was only on the opposite side.
In a media interview in September 2023, Liu Lili said, "Many people think that I am a little late to switch from research to investment, and I still think it is early, but in fact, it can be a few years later." ”
Liu Lili said that investment is a heavy responsibility. "If you make an investment, you have to assume this social responsibility, and you have to think clearly about how many funds in the market there are, why do people want to buy my fund, and what value can be created for others?"
What was the reason for Lily Liu's final decision to transform into a fund manager?
Liu Lili said that as an investor with a very low risk appetite, her requirements for fund products are "less losses in the bear market and keep up with the bull market".
However, there are not many fund products on the market that meet her needs, and even if she has bought one or two, she will eventually be restricted due to the increase in scale.
For investors with similar risk appetite to hers, the idea of making products with absolute returns that are in line with the "bear market with fewer losses and bull market to keep up" germinated in her mind.
Her 14-year career as a researcher has given Liu Lili a broader vision and become more sensitive to marginal changes in the company, and it has also helped her avoid stepping on thunder in some storytelling companies.
However, research is not the same as actual combat, and Liu Lili firmly believes this.
Some truths were also realized more deeply by her after she became a fund manager.
Through the personality and life of a fund manager, investors can gain a deeper understanding of the fund manager's operating style. Next, let's take a look at some of Lili's performances after transforming into a fund manager.
02. Why is 2021, the year of Liu Lili's harvest?
Liu Lili, a researcher in the consumer industry, transformed into a fund manager, and her first product after transforming into a fund manager was the theme of Wells Fargo Consumption, which was co-managed with Wang Yuanyuan, the "goddess of consumption" of Wells Fargo.
At the beginning of 2019, Wang Yuanyuan and Liu Lili jointly launched a new fund, Wells Fargo Quality Life, and the two partners are known as the "Rose Combination".
In February and October 2021, Liu Lili stepped down as a fund manager in the themes of Wells Fargo Quality Life and Wells Fargo Consumption.
It just so happens that 2021 is a year for Liu Lili to gain a lot in terms of investment.
If the theme of Wells Fargo consumption is Wang Yuanyuan's masterpiece, the selection of Wells Fargo Research is Liu Lili's masterpiece.
Since taking over on February 1, 2019, the cumulative return of the fund during Liu Lili's tenure has been close to 130%.
From 2019 to 2023, the annual returns of Wells Fargo Research Select are 33.54%, 60.48%, -0.78%, -10.05%, and 11.54%, respectively.
In addition to underperforming the CSI 300 by about 2.5 percentage points in 2019, Wells Fargo Research Select has outperformed the CSI 300 for four consecutive years.
In 2021, Liu Lili's performance is not bad compared to the CSI 300. However, according to the daily fund network, the average return of similar funds selected by Wells Fargo Research was 10.71% that year, and Wells Fargo Research Select ranked 1663rd among 2,206 funds of the same kind, ranking in the bottom 25%.
In this market that pursues relative returns and rankings, Liu Lili is ranked behind.
In the 2021 annual report, Liu Lili said, "Due to the high allocation ratio in the consumer sector, the fund has not been able to achieve good performance in 21 years. At the beginning of the year, the company underestimated the persistence of the epidemic and overweighted consumer services and consumer goods, and performed poorly in the second quarter under the dual pressures of weak domestic demand and high upstream raw material costs. ”
Liu Lili further explained in a later interview, "Inflation did occur in 2021, but it happened in the upstream, and downstream companies had no way to pass on the pressure of rising costs through price increases. ”
Judging from the holdings in the second quarter of 2021, the top 10 heavy stocks selected by Wells Fargo Research are Ginza Shares, Yili Shares, Chongqing Department Store, Haier Smart Home, Fuling Mustard, Hikvision, Shanghai Jahwa, Yutong Automobile, Changchun High-tech, and Huayu Automobile, which are mainly downstream consumer companies.
According to the financial report of the listed company, in the second quarter of 2021, Yili's gross profit margin decreased by 7.19 percentage points year-on-year, and the net profit attributable to the parent company decreased by 3.91% year-on-year, while the gross profit margin of Fuling mustard increased by 1.64 percentage points year-on-year, but the net profit attributable to the parent company decreased by 27.57%.
Liu Lili said that although the portfolio is ostensibly dispersed at the industry level, in fact, the driving force is the same. "If I do some allocation of inflation benefit targets in the upstream, midstream, and downstream, the result will be different. ”
With the experience and lessons learned in 2021, Liu Lili's portfolio has been more balanced and dispersed in terms of industry allocation since then.
In 2022, Liu Lili will be allocated in cycles, consumption, and medicine, in addition to gold and crude oil. In that year, Wells Fargo Research Select had a return of -10.05%, ranking 732nd among 2,300 funds in the same category, ranking in the top 1/3.
For the majority of people, many times you can make money by buying blindly in the bull market, and losing less in the bear market is the king.
After all, when you lose money, you are really distressed.
As for her own operating style, Liu Lili said that it may not be the best in the bull market, "but I hope to give holders a relatively better holding experience in the bear market, and make money for investors in the long run, rather than just earning rankings." ”
03. The share of institutions is 4.5 times that of retail investors, and the Wells Fargo Research Selection is only known by institutions?
Even if Wells Fargo Research Select's 2022 performance ranking returns to the top 1/3, the -10% gain is not enough to attract the attention of the market. At the end of 2022, the total size of Wells Fargo Research Select Class A and Class C was only 425 million.
But in the volatile market of 2023, Wells Fargo Research Select has achieved positive returns for three consecutive quarters. In the first three quarters of 2023, the yields of Wells Fargo Research Select Class A were 13.01%, 3.59%, and 3.27%, respectively.
In 2023, Wells Fargo Research Select has an annual return of 11.54%, ranking in the top 2% of similar funds. At the end of the year, the scale of fund A/C class expanded to 3.647 billion.
However, the size of Wells Fargo Research Select is not bought by retail investors, and the main holders are institutions.
At the end of 2023, the total share of Wells Fargo Research Select A/C/D was 1.298 billion. Among them, institutional holders accounted for 81.87%, and individual investors accounted for 18.13%, and the institutional share was 4.5 times that of individual investors.
From the perspective of Wells Fargo Research Select Class A Fund, at the end of June 2022, the proportion of institutional holdings of the fund was only 0.64%, which increased to 15.59% at the end of 2022 and 54.43% at the end of 2023, exceeding the proportion held by retail investors.
Perhaps due to the impact of institutional holdings, Wells Fargo Research Select Class C was established in August 2022, with Liu Lili as the fund manager. According to the holder structure, the Class C fund has been dominated by institutional clients from the very beginning.
In October 2023, Wells Fargo Research Select Class D Fund was launched. Similar to Class C funds, the scale of Class D at the end of 2023 will be 165 million, with institutions accounting for 92.48%.
According to China Fund News, in the third quarter of 2023, Wells Fargo Research Select C was held by 30 FOF funds. According to Wells Fargo Fund data, in the fourth quarter of 2023, Wells Fargo Research Select C was held by a total of 68 FOF funds.
Judging from the comparison of the proportion of retail investors and institutional holdings, compared with retail investors, institutions have a higher recognition of Liu Lili and Wells Fargo Research Selection.
However, this phenomenon can also be said to be insufficient in Liu Lili's recognition among retail investors.
On January 2, 2024, Wells Fargo issued a new fund to Liu Lili, Wells Fargo Value Discovery Blend, which was originally scheduled to close on January 22 and finally extended to February 2.
In the end, Wells Fargo Value found that the mixed raised 314 million yuan, and the total number of valid subscriptions was only 2,100, with an average subscription of about 150,000 yuan per person.
According to the data of Tiantian Fund, from its inception on February 6 to April 26, Wells Fargo Value found a mixed cumulative return of 7.13%, the CSI 300 rose by 8.23% over the same period, and the average increase of similar funds was 12.50%.
At present, Liu Lili's new fund has underperformed the market, but considering that the fund is still in the building period, it can be observed for a while longer.
However, the bigger challenges often lie ahead.
04. The scale of management increased by 9 times during the year, and the pace of investment was challenged
In 2023, Liu Lili's management scale will expand from 425 million at the beginning of the year to 3.812 billion, an increase of nearly 9 times. The sudden expansion of the scale of management is a challenge for any fund manager.
In the fourth quarter of 2023, Wells Fargo Research Select returned -7.75%, while the CSI 300 returned -7.00% and peer funds returned -3.32% over the same period.
Wells Fargo Research's performance in the fourth quarter is somewhat related to the improper management of positions after the expansion.
According to the data of Tiantian Fund Network, in each reporting period since 2023, the stock position selected by Wells Fargo Research has remained above 90% for a long time, the cash position accounts for about 8%, and the bond position is less than 0.2%.
This holding style can reflect at least the following two points: first, compared with other deep value fund managers in the market, Liu Lili has a higher preference for stocks and pays less attention to the defensive role of bonds, and second, the fund's long-term high position operation has led to the new funds mainly used to increase positions, which may be one of the main reasons for the fourth-quarter drawdown to exceed its expectations.
For example, from the second to the fourth quarter of 2023, the share price of Poly Development increased by -4.72%, -2.23%, and -22.29% respectively, and at the end of each period, the number of shares held by Wells Fargo Research Select in Poly Development was 6.0164 million shares, 14.5398 million shares, and 23.3145 million shares, respectively.
In the annual report, Liu Lili said, "The net value performance in the fourth quarter reflects that there is still a lot of room for improvement and improvement in the portfolio management of this product, such as the timing and allocation rhythm of the left side of the industry, the rhythm of individual stock allocation, etc." ”
The growth brought to Liu Lili in 2021 is that the portfolio driving force should be diversified, and the industry allocation should be balanced and dispersed.
The lesson for Liu Lili in 2023 may be that the left side of the industry must grasp the rhythm of time and space, and not blindly increase positions.
05. The performance in the first quarter ranked in the top 10%, and increased positions in nonferrous metals, white electricity, and central enterprise real estate
In the 2023 annual report, Liu Lili is more optimistic about pro-cyclical industries such as real estate, nonferrous metals, chemicals, and machinery manufacturing, among which she is the most interested in real estate.
Liu Lili said, "In the past two years, whether it is land acquisition or sales data, the logic of increasing industry concentration has been confirmed. We believe that both the fundamentals of the industry and the stock prices of related companies are overshooting, and there is a large room for repair in the future, and the expected return space of some companies is highly attractive. ”
Judging from the selection and rebalancing of Wells Fargo Research, in the first quarter of 2024, the fund's shareholding in Poly Real Estate, a central enterprise, increased to 26.84 million shares, an increase of about 3.5 million shares from the end of the previous year.
At the same time, Wells Fargo Research Select has significantly reduced its position in Binjiang Group, a private real estate company, and has withdrawn from the top 10 from the largest heavy stock in the fourth quarter of 2023.
In the pro-cyclical direction of nonferrous metals and chemicals, Wells Fargo Research has selected Zijin Mining, Hualu Hengsheng, Jereh and other shares to increase their positions to varying degrees.
In addition, consumption, as the industry that Liu Lili is best at, said in her annual report that consumption is the best offense as a post-cycle sector. "We are more optimistic about the direction of home appliances, retail related to offline recovery, mass consumer goods with strong must-have attributes, and part of the travel chain. ”
In the first quarter of 2024, Gree Electric Appliances and Air China became the top 10 heavy stocks selected by Wells Fargo Research, the number of shares held by Angel Yeast increased by about 2 million shares quarter-on-quarter, and Chongqing Department Store was slightly reduced.
In the first quarterly report, Liu Lili wrote, "In the first quarter, the fund did not make much adjustments in the allocation of major industries, and made local adjustments in different sub-sectors in combination with the fundamental changes of related companies and their corresponding valuations, as well as the expected return space in the future." The basis for the adjustment is that we are more optimistic about companies that will significantly benefit from the improved competitive landscape in the future, as well as companies with more pricing power in the upstream and downstream value chains. ”
In the first quarter of 2024, the CSI 300 rose by 3.10%, the return of Wells Fargo Research Select Class A was 5.05%, and the average of similar funds was -1.74%, and the fund ranked in the top 10%.
Judging from the results, Liu Lili's adjustment in the first quarter has achieved good results.
As for her expectations for 2024, Liu Lili said, "I hope to better grasp investment opportunities in this market stage, which can almost be called 'comprehensive depth value', and strive to create a more qualified return for holders." ”
Whether this promise can be fulfilled is still to come, and the challenge of Liu Lili and Wells Fargo Research Selection is still to come.
Author's summary: In the current volatile market, the return rate selected by Wells Fargo Research in 2023 can rank in the top 2% of similar funds, and in the first quarter of 2024, it can be seen that Liu Lili's investment style of deep value can bring better returns to investors.
In addition, Wells Fargo Research Select can be held by more than 60 FOF funds, which can also show that institutions are optimistic about this fund and Liu Lili.
However, Liu Lili's portfolio has maintained a high position for a long time, and when the whole market falls deeply, whether her portfolio can control the drawdown and reduce investor losses may be a challenge for her.
If the management scale is expanded to 10 billion yuan or even higher, whether Liu Lili can still achieve excess returns for investors is also a challenge.