▲Xu Lirong, general manager of Guohai Franklin Fund
"I am personally very optimistic about the development of the mutual fund industry in the next ten years." Xu Lirong, general manager of Guohai Franklin Fund, believes that in the next five to ten years, there will be great development in active equity, and it is still expected to obtain significant excess returns. "At present, it is estimated that Chinese residents have hundreds of trillions of money in real estate, tens of trillions of dollars in the stock market, and more than 20 trillion yuan in public funds and bank wealth management. The money flowing out of the real estate market will eventually find an outlet, and this export is likely to be invested in the stock market and bond market through the asset management industry, even if only 10% of the money in the real estate market comes out, it is the concept of doubling the asset management industry. So in terms of direction, I'm quite optimistic, but there may be some pressure in the next year or two. He said.
Xu Lirong is a very senior public offering veteran, with 26 years of experience in the securities industry and 17 years of experience in public fund management. After graduating from the Central University of Finance and Economics with a master's degree in 1997, he joined the Finance Department of China Import and Export Corporation as an investor. In 2001, he joined Rongtong Fund Company to do research, and began to manage funds in 2003; In 2004, he joined Shenwan Paris (now Shenwan Lingxin) Fund Company as a fund manager; In 2009, he joined Guohai Franklin Fund Co., Ltd. and successively served as general manager of the research department, fund manager, investment director, deputy general manager and general manager of the company.
In the public fund industry, there are not many general managers from fund managers, and there are only a handful of people who still insist on serving as fund managers after serving as general managers, and Xu Lirong is one of them. On the one hand, he wants to lead the company to take a unique road of joint venture public fund that integrates the advantages of local and foreign-funded institutions. On the other hand, he has also achieved excellent medium to long-term investment performance, such as the longest-running Guofu China Income Fund, which is a balanced hybrid fund with a long-term equity position of around 60%. Wind data shows that as of April 30, the fund has returned 182.07% since Xu Lirong managed it on September 30, 2010, with an annualized return of 7.93%.
Xu Lirong has been deeply involved in public fund companies for many years, in his opinion, what kind of challenges will public funds face in the future? As the general manager of the company, what is his plan for the Guohai Franklin Fund, and where will he take the company? Will he continue to manage products in the future? A few days ago, a reporter from Securities Times and Brokerage China interviewed Xu Lirong and had a frank and in-depth exchange on related topics.
The following is a transcript of the interview:
More Chinese than global investors and more international than local investors
Brokerage China Reporter: Please tell us about your early experience and what impact did it have on your investment philosophy and approach?
Xu Lirong: My first job after graduating from school was to invest in the finance department of China National Technology Import and Export Corporation, mostly in the primary market, and a small part in the secondary market. In the early days, the secondary market was not very mature, the stock market was rampant, there was no sense of professional achievement, I wanted to be an investment bank, and in 1999 I also obtained a lawyer's qualification, and then slowly began to feel that investment is a very market-oriented industry, very attractive, and there is a lot of fun, so I decided to take the investment direction, because the work is more serious and positive, and was promoted to the deputy general manager of the financial department.
In 1998, China's public fund came out, is the most market-oriented, the most professional investment institutions, I yearn for, in 2001 Rongtong Fund was established, I submitted a resume, was hired, to the company management research, and later began to do investment. At that time, the market was in the midst of a 4-year bear market, and I had a lot of confusion in terms of investment, always thinking, how should I manage my money, and what is my competitive advantage? I began to pay attention to the practice of foreign asset management companies, in 2004 because of family reasons, I came to Shanghai, just Shenwan Paris (now Shenwan Lingxin) was recruiting, I was more interested in joint venture funds, and after talking with the general manager sent by the foreign party, I felt very good, so I decided to go over, the company asked me to be in charge of the research team, and later began to manage the fund.
During this period, I spent two years taking the CFA exam, and the main goal was not to get a certificate, but to systematically learn Western theories, CFA is not purely theoretical, but a combination of theory and practice, which touched me a lot. In addition, I have dealt with foreign shareholders a lot in those years, which makes my understanding of investment clearer, and I hope that I can concentrate on the strengths of foreign institutional investors, and compare with global investors, who are Chinese investment experts, and compared with domestic investors, I have a more global investment vision.
Brokerage China Reporter: You joined Guohai Franklin in 2008, why?
Xu Lirong: Franklin has a well-established approach to overseas investment, and has been successful in the past, and their approach can be simply summarized as establishing a local investment team to invest in the local market, which requires the team to have both local expertise and a global vision, and the money may come from local or foreign sources. It was a good fit with my idea, so I decided to join Franklin.
Brokerage China Reporter: In Guohai Franklin, what changes have you made in your investment thinking?
Lirong Xu: We have been in close contact with Franklin's various investment teams, and through continuous thinking, it has basically become clear that our direction is to emphasize dislocation competition, and that investing in China is definitely our strength compared to foreign investors, and that we have an advantage over domestic investors in global investment, more global standards and portfolio management. After more than 10 years of investment practice, we have gradually matured in the integration of Chinese and foreign countries, and compared with international investors, we have a better understanding of the local market, local culture, social changes, industrial changes, corporate governance structure and potential investment opportunities. Compared with domestic investors, we have a more international perspective, and at the stock selection level, we pay more attention to the valuation comparison with similar companies in other emerging and mature markets, and pay more attention to risk-adjusted returns at the portfolio level, not only to see the comparison of returns, but also to see how much risk is taken, whether the volatility is very large, and whether it deviates too much from the performance benchmark.
Brokerage China Reporter: Please compare the strengths and weaknesses of local institutions and overseas institutions.
Xu Lirong: Our local investors have their own advantages and strengths, such as the understanding of information and the depth of tracking are stronger than those of foreign institutions, and our shortcomings and weaknesses are that it is easy to be short-sighted, become trend investors, chase up and down, and trade too frequently.
The advantage of international investors is that the cycle is long, and some funds hold a stock basically for 5 years, so that the investment will be more cautious, and the probability of stepping on the thunder is relatively low. However, overseas institutions also have disadvantages, one is that the response to information is relatively lagging behind, and the understanding of the domestic market is a bit of a remote view, and they are not particularly able to understand the real motivation for enterprise growth; Second, there are often more countries and regions in which foreign institutions invest, and some new opportunities are ripe when they find them, forming de facto laziness. For example, some of China's leading Internet stocks have risen a lot and accounted for a relatively high proportion of the index, and only then began to slowly enter the top ten holdings of emerging market funds and overseas Chinese funds, because overseas fund managers mainly make allocations based on performance benchmarks, resulting in them naturally choosing large stocks with a higher proportion in the index, the advantage is that the probability of making mistakes is relatively low, and the disadvantage is that there is a lot less excess returns.
To the extreme, around 2010, I saw a portfolio of international funds holding a stock, assuming that no more than 20% of the daily turnover of the stock was sold, and the number of days to cash out would be more than 10 years. I was very surprised at the time, which also triggered me to realize that foreign asset management has its good side and is very mature, but it also has its shortcomings or shortcomings.
Brokerage China Reporter: What do you do in investment?
Xu Lirong: We hope to adhere to the advantages of domestic institutions, and at the same time learn from the mature concepts and methods of foreign-funded institutions to form our own characteristics. For example, foreign active funds are mainly allocated according to performance benchmarks, and the tracking error is generally very small, and the volatility of the portfolio is very similar to the volatility of the performance benchmark, but the excess return is very small; In China, the requirements for tracking error can be relaxed, but it is necessary to know the difference between your portfolio and the performance benchmark, and hope that this difference will bring excess returns.
Overall, the turnover rate, volatility and tracking error of our portfolio are relatively low, and of course they may be higher than those of foreign Chinese funds. Looking at it a little longer, our Sharpe ratio (excess return divided by portfolio volatility) and information ratio (excess return divided by the difference between index volatility and portfolio volatility) have certain advantages over foreign investors, and compared with domestic investors, our absolute return is not necessarily higher, but the risk-adjusted return is not bad.
Part of the reason for the formation of our style is that we began to manage the money of international investors more than ten years ago, and the current management scale is relatively high among domestic public fund companies, and our domestic customers are mainly institutional investors, and the demands of institutions are clearer, which prompts us to be more international in some management methods.
Contrarian investing is an effective strategy, but it often involves enduring long periods of pain
Brokerage China Reporter: Please tell us about your personal investment style.
Xu Lirong: My style is reversed, which has something to do with my thinking and personality. For example, when the core assets reached a high level in the first two years, I thought it was too expensive, and they were basically sold, but the market was more sought after; Now that the market has a lot of doubts about the core assets of the year, the stock price has fallen, the valuation is reasonable, it is cheap, and I may start to buy them back again.
Brokerage China Reporter: Contrarian investors often need to be patient for a long time, please tell us how you feel.
Xu Lirong: In the domestic market environment, contrarian investment is sometimes very uncomfortable, because it will be bought on the left side, and the asset may overshoot when it is unpopular, and the time and magnitude of the decline will exceed expectations. The advantage is that you can buy good and very cheap chips in unpopular assets, and you can sell them at a good price when you are particularly crazy.
Another problem with contrarian investment is that due to the relative caution of valuation, there is a high probability that it will be sold on the left side, and it may not be able to eat the most lucrative period, which is a problem that contrarian investors will inevitably face. Over the years, we have also tried to adjust as much as possible, and move the sell to the right as much as possible, but there is a high probability that there will still be a problem of selling on the left.
Brokerage China Reporter: In your opinion, is contrarian investment suitable for the Chinese market?
Xu Lirong: Overall, in China and even in the global capital market, the law of mean reversion is at work, and there is room for contrarian investment methods. In the past few years, when liquor, new energy, and TMT were feverish, I didn't have any positions, but we got okay returns through stock selection in other assets, and the risk-adjusted returns were about the same as we expected.
Brokerage China Reporter: How do you choose a company?
Xu Lirong: Contrarian investment requires a certain cycle, 3 to 5 years is a reasonable cycle, and my stock selection is basically considered from the dimension of 3 years.
The first thing I look for when choosing a company is the management and the founders, I hope that their interests are consistent with the interests of the circulating shareholders, and focus on the development of one area, do not do anything to make money, and the management should be more credible, and the management can tolerate mistakes, but be honest and credible, and do not fool investors. Second, we value the company's growth space, no matter which industry it is in, I hope that the company has enough growth space. Third, look at the risk-return ratio, I can accept that the stock price will fall by 10%-30% after buying, the key is how much room for upside, whether the comparison between return and risk is attractive, if it falls by 30%, but the upside is doubled or doubled, the decline is acceptable.
Brokerage China Reporter: In the past year or two, your portfolio has seen a certain drawdown.
Xu Lirong: I am more optimistic about the market, my portfolio will be slightly more growth, in the past one or two years, the market is more pessimistic, mainly defensive mentality, small tickets, bonus companies perform better, these two types of companies in my portfolio are relatively few, my portfolio performance will be weaker, but a little longer, there is no big problem.
Brokerage China Reporter: You have more than 20 years of investment experience, and have experienced the more extreme bull and bear market in the A-share market.
Xu Lirong: First, the sharp bull and bear transition from 2007 to 2008. At the end of 2007, I was very anxious about the market, thinking that 6,000 points was too expensive, which pushed the stock position of my products relatively low. I came to Franklin in early 2008 and didn't care about money for about a year. I was a little more reversed, in 2008 when the Shanghai Composite Index fell below 3000 points, I began to multiply, but more than a month later the Shanghai Composite Index fell to 1668 points, although I was bearish at 6000 points, but 3000 points must be trapped, if you manage money, the injury will be more serious. So I'm still very lucky, which makes me add some new cognition to the election, I found that the cognition of the "top", common sense can play a great role, but the judgment of the "bottom" is more comprehensive and needs to be more cautious.
There was also the bull-bear transition in 2015, and what impressed me the most was the liquidity issue. We manage open-end funds, and there are many open-end funds abroad that are not subject to daily subscription and redemption and valuation, while domestic public offerings are highly standard daily subscription and valuation at the beginning, and liquidity must be ensured. We have always been more concerned about liquidity, in 2015 when the small stocks continued to fall to the limit, I still have 20% of the position can be realized, can cope with redemption, our company is also in a better state than its peers, but at that time it was still thrilling, worried about liquidity risks, called liquidity squeeze abroad. In the past, I saw in the story, when I experienced it firsthand, I will have a clearer understanding of liquidity, and I will better understand why liquidity should be placed in a very important position in portfolio management. I later reflected that there are still more small stocks in my portfolio, when the small stocks are hot, the daily trading volume is very large, and there seems to be no liquidity problem, but once it falls, the liquidity may be lost in an instant, so I should be more cautious about investing in small and medium-sized stocks.
"I am a weak person and think the market is the best"
Brokerage China Reporter: What characteristics do excellent fund managers need?
Xu Lirong: First, you must have a very strong curiosity, to know what it is and why it is true, curiosity will drive you to do in-depth research and have a keen understanding of many problems; The second is diligence, to do all work, diligence is essential; The third is to have a good attitude and coexist with pressure.
Brokerage China Reporter: How to establish a good attitude?
Xu Lirong: First of all, having an objective and correct understanding of the world and oneself is the key to a good attitude. For example, I am a weak mentality, I think the market is the best, although the market will also make mistakes, but I will respect the market, when I am different from the market, I must be wrong, not the market is wrong. This doesn't mean that I will definitely change, but I want to know that when it is good, it may just be that my style is more suitable for the market, and when it is not good, it may be that my style is not suitable for the market, and poor performance is what it should be. Can you change the style? If you decide not to change, you have to endure a period of sluggish performance, and it is important to have a good mindset by correctly recognizing this. Secondly, to find a balance between excellence and grasping the big and letting go of the small, there is no spirit of excellence to do well, too much excellence may also drill the tip of the horns, balance the two, is also the key to maintaining a good attitude. Third, a lot of our pressure is rolled out, in fact, everyone's style is different, it is normal to have different performances, if you can't accept it, the greater the hope, the greater the disappointment.
Many years ago, I read "Rescuing Wall Street", about how the famous long-term capital management company collapsed in the 90s of the last century, and the core reason is greed and too self-confidence. They use a lot of leverage, because they have made a lot of money in the past few years, and almost all the money earned by all employees of the company has been invested in products, and they have also borrowed a lot of money, and there is a partner whose leverage is about a thousand times, if the company's leverage is reduced by about half, the company will survive and continue to make a lot of money.
Brokerage China Reporter: Do you have high requirements for investment ability to resist pressure?
Xu Lirong: Stress is not too much of a problem for me, and I have never lost sleep because of short-term performance. I have never advocated resisting pressure, which means that there will be times when I can't resist it, in this investment industry, I naturally have to accept pressure, and find a way to coexist with pressure, I have a wide range of hobbies, I like to watch miscellaneous books, American dramas, and travel, which are all ways to adjust my mentality.
Brokerage China Reporter: You are one of the few general managers of fund companies who are still managing products, will you insist on managing products in the future?
Xu Lirong: My choice for my career is to make investments, my goal is to manage the products well, and I am most interested in investment, and I will continue to do it.
Brokerage China Reporter: Will it be distracting to be both a general manager and a product manager?
Xu Lirong: My main focus is still on investment, before I had 80% of my energy on investment and 20% on management, now 70% on investment and 30% on management. Guohai Franklin's management is relatively flat, the cooperation of the management team is relatively smooth, the division of labor is relatively clear, the back-office, sales, supervision, and administration have special vice presidents in charge, and the operational obstacles are relatively small and the efficiency is relatively high. The general manager is mainly responsible for making decisions on the direction, and many details are responsible for the vice president, middle-level cadres and key employees, many of whom have worked in the company for more than ten years, and their abilities are very strong, which is the pillar of our company.
Pursue quality growth and make a distinctive public fund
Brokerage China Reporter: When you took over as general manager, what were your plans for the company?
Xu Lirong: My idea is the same as investment, investment is not familiar with it, and the industry that I am good at and understand within my circle of competence is the same.
First, our characteristics are equity-based, institutional investors-based, on the basis of bigger and stronger equity, to promote the stable development of fixed income and other businesses, the company's scale to pursue steady growth, rather than explosive, to have a quality of scale, a good profitability of the scale.
Second, we are a joint venture fund, our goal is to be a distinctive public fund, to bring in, go out, the introduction is mainly to introduce all kinds of foreign funds into the Chinese market, by us on behalf of the investment management, with the support and cooperation of shareholders, we manage the scale and profitability of foreign capital are relatively leading, this is a direction of our advantages, but also our future commitment to the development of more distinctive business; Going out is mainly QDII business, and we have developed relatively fast in the past few years.
3. The biggest asset of an asset management company is its people, and we must form a people-oriented and warm corporate culture. The first is to choose the right people, and the second is to maximize the value of each person, and at the same time, let the capable people form a whole, rather than fighting separately. Franklin is a family-owned, publicly traded company that puts people first, and we're moving in that direction.
In the short term, we will face challenges in the next one or two years, and there may be certain troughs, but in the medium and long term, I am full of confidence in the capital market and the development of the company.
Brokerage China Reporter: How do you define quality growth?
Xu Lirong: Judging from our growth in the past ten years, we mainly rely on holding and operating to do large-scale, and the number of our products is significantly less than that of companies of the same size, adding up to 46 public offerings. In the past, some of our products used to be small and small, but then the scale grew significantly, provided that the long-term performance was relatively good and sustainable. For example, Guofu Global Technology Interconnection (QDII) once fell to only a few million yuan, but now it has grown to a level of hundreds of millions, and hopes to grow even bigger in the future.
Brokerage China Reporter: Please tell us about the characteristics of Guohai Franklin's equity products.
Xu Lirong: Our investment goal is to keep up with the market when it rises, fall a little less when it falls, and look at it for a long time, hoping to outperform the index in 3 years and more in 5 years. We started to put forward in 2022 that we hope to be the "bottom position" portfolio of investors, and our target customers are people who want to get reasonable returns, but do not want too much volatility.
Why are we mainly institutional investors, because institutions will naturally choose some of our style of funds, and the Internet platform has also been institutionalized in recent years, because the risk of the platform is relatively small. So, the rise of internet platforms is also helpful to us. In addition, although the scale is not particularly large, we now have 3 funds with millions of customers. Judging from the results, we have continued to grow steadily on both the institutional side and the Internet platform side, and the traditional channels are also actively laying a solid foundation to further stabilize and expand.
Brokerage China Reporter: Judging from the practice of the past 20 years, most joint ventures have not become bigger, what do you think about this?
Xu Lirong: Personally, I think that joint ventures, including foreign-funded companies, are unlikely to develop into leading fund companies in China, which is determined by the culture and the characteristics of the Chinese market. Public funds to do large-scale, need to be very aggressive at every important point in time, go all out, and the joint venture company does not have such congenital conditions, Franklin as an example, the company's first product has a history of 76 years, they look at the cycle is very long, and put risk control in the first place, and in the short-term development of the company, sometimes the trade-off between risk control and business development is a very critical decision, therefore, from the perspective of innate endowment, the joint venture company is not easy to do the head of the industry. Second, strategically different, China is only one of the markets in which the global asset management giants are investing in one of the markets with growth potential, and they do not want to be too large in the short term. Third, the decision-making chain will be relatively long, and it is easy to miss investment opportunities.
Therefore, joint venture funds should consider differentiated development and become fund companies with their own characteristics. Our goal is to have a better quality of growth, and although we have suffered a little bit in the rankings, this is our strategic choice, and we will stick to it.
Optimistic about the future of public funds, active equity funds will still be the mainstream
Brokerage China Reporter: You just talked about the short-term tendency of domestic public funds, how do you think it was formed?
Xu Lirong: From the beginning of the development of domestic public funds, the competition is very fierce, the advantage is that the best of the best, excellent talents continue to emerge, but excessive competition brings short-sightedness and involution. I remember more than ten years ago, there was a word called "effective position", which refers to how many positions were rising for a period of time. This competitive pattern, atmosphere, and pursuit of short-term returns are a bit like foreign hedge funds, but foreign hedge funds can use a variety of tools to express investment ideas, and domestic public funds do not have so many tools, so they have become a rapid and violent style rotation, such as new energy, when it is hot, it is all the way forward, and when it is cold, it falls sharply, and the time of decline is very long and the amplitude is very large. This is the ecology formed by domestic public offerings.
Brokerage China Reporter: In your opinion, what kind of development process has China's public funds experienced in terms of investment?
Xu Lirong: There are about four stages: the first stage, from 1998 to 2002 is the learning period, the industry has just been born, the fund managers are relatively young, and most of the early closed-end funds are about 2 billion yuan, which is very big money at that time.
The second stage, from 2002 to around 2010 is a period of exploration, everyone is looking for their own methods, there are a variety of routines, but the overall behavior is fundamentally driven, there is a very popular sentence for a while, called "fire prevention and anti-theft fund", some small companies do not welcome fund research, because there is a fund to come in is not good to do the bank. This experienced a bull market in 2007, which had a very large impact on the fund. From January to May of that year, small stocks soared, and I received about four or five letters from retail investors to teach me how to invest, because I felt that the stocks I bought were too bad and did not rise, and after "5 ·30", big stocks began to rise. At that time, the scale of public funds was still very small, except for closed-end funds, the scale of funds was only a few hundred million, more than one billion, but in the bull market in 2007 grew particularly fast, by the middle of the year, the whole market of more than 5 billion yuan of funds abounded, but many fund managers just started to manage money, or just started to manage such a large amount of money, what should be bought? How to buy? It became a problem again, and at that time, there was a grand scene of a very large energy state-owned enterprise with a market value of pulling three price limits after being listed, which was also the process of learning for public funds.
From around 2010 to 2021, it is the third stage of the development of public funds, although we have a variety of different routines and methods, some are biased towards the track, some are biased, but the investment style driven by the fundamentals of public funds has been relatively stable, mature, and has become the mainstream force of the market.
From 2021 to the present, including the next one or two years, is the fourth stage, the investment of public funds has entered a new run-in period, and the biggest feature is that public funds have begun to outperform the index, so passive funds represented by ETFs are popular. In which direction will the future develop, there are still big differences, there is a faction that we are close to the United States, passive will occupy the mainstream of the market; Another school of thought is that China has not yet reached the stage of the United States, and there will be great development of active rights and interests, and it will still be the mainstream of the market. Personally, I agree with the second view, that in the next 5 to 10 years, there will be great development in active equity, and it is still expected to obtain significant excess returns. Public offerings now account for just over 10% of the A-share market, and when the public offering market accounts for 20%-30%, to some extent, you are the market, and it may be difficult to beat the index.
Brokerage China Reporter: What do you think about the future of China's public funds?
Xu Lirong: In terms of scale, public funds are not sluggish at all, and the scale of management continues to hit new highs. I am personally very optimistic about the development of the public fund industry in the next ten years, one is to find a place to go, it is currently estimated that Chinese residents in the real estate money is hundreds of trillions of magnitude, the stock market is tens of trillions of magnitude, public funds and bank wealth management each have more than 20 trillion orders of magnitude, real estate money will fall part, and then a part, even if only 10%, the concept of doubling the asset management industry. Money will eventually find an outlet, and this export is likely to be invested in the stock market and bond market through the asset management industry, so I am quite optimistic about the direction, but there may be some pressure in the past year or two.
Development is the last word, and we are generally optimistic about China's economy and the A-share market
Brokerage China reporter: There are some views on the economy and the market, what do you think?
Xu Lirong: We are facing extremely strong competitors, a very complex and volatile international political and economic landscape, and three years of the pandemic, so everyone has some worries about the future. At this point in time, I think the pessimism has been exaggerated, and from the perspective of historical experience, it will pass, but it will take some time. The pessimism of the present is a clear inverted "V" with the optimism of 2021, which was a bit overly optimistic then, and is now overly pessimistic.
Although I invest from the bottom up, the perspective of thinking and understanding of human nature are also very important factors.
Brokerage China Reporter: What do you think about the future of China's economy and the A-share market?
Xu Lirong: Looking at the next three or five years, I am generally optimistic about China's economy and the A-share market. There are several prerequisites for judging the economy:
First, our geopolitical environment will most likely remain like this for a period of time in the future, and it is difficult to suddenly change for the better or worse;
Second, our worries about China's economy are more medium- and long-term, population, debt, etc. are medium- and long-term structural problems, and there is a clear answer in the past 40 years of reform and opening up - to solve problems in the course of development, as long as a certain speed of development is maintained, these problems will be solved;
Third, development is the last word, China's economy has been in the process of gradual recovery, in the next few years the economy is expected to maintain stable and good growth, many high-quality listed companies in the next 3-5 years earnings growth continues to exceed the probability of expectations is very large, and the current valuation is very low compared with historical valuation.
In addition, liquidity is also relatively sufficient, the real estate market money in the future or will be transferred to the stock market, last year was a bear market, active funds are net redemptions, but passive funds increased by 400 billion, which shows that money is still on the way to the stock market. Moreover, international institutions are seriously underweight the Chinese market, China's total economic output accounts for about 18% of the world economy, and many international funds are now only four or five points in China's allocation, and it is possible to see a return to the normal level of more than 10 points in the future. All things considered, I am still relatively optimistic.
Brokerage China Reporter: Structurally, what industry or field are you optimistic about?
Xu Lirong: I am more optimistic about consumer and cyclical growth companies, including traditional cyclical companies, and TMT is also cyclical growth. In addition, looking at the dimension of 3 years, photovoltaics, new energy vehicles, and batteries in the field of new energy are also in a relatively low position, and they are relatively optimistic.
AI is a greater industrial revolution than the industrial revolution, the direction is very optimistic, but A-shares are currently more thematic investment, it is difficult to find a target with high visibility, in AI investment, if the risk tolerance matches, our Guofu Global Technology Interconnection (QDII) is a good choice.
Editor-in-charge: Wang Yunpeng
Proofreader: Liu Rongzhi