In the Hong Kong stock market in recent times, everyone must have felt that from April 22 to May 6, the Hang Seng Index achieved "ten consecutive rises", and then, although there is a certain adjustment, it is still up more and down less.
Overall, most of the Hang Seng Composite Industry Index has risen this year. (Source: Wind, as of May 16)
Moreover, this wave of Hong Kong stocks is leading the world. Wind data shows that as of May 16, the Hang Seng Index is up 17.56% since April 22, while the Nasdaq is up 9.56%, the South Korean Kospi is up 5.34%, and the Nikkei 225 is up 2.32% over the same period.
So, how did Hong Kong stock funds perform in this wave of rebound? From April 22 to May 16, the Hong Kong Stock Connect Fund Index (Yangtze River) rose by 14.59%, and the QDII equity fund rose by 10.48%.
In fact, after this wave of rebound, Hong Kong stock funds, whether QDII or Hong Kong stock-related index ETF products, have also led the yield in the past 1 year compared with other types of fund products.
Note: The data is from Galaxy Securities, as of May 10, 2024.
According to the data of Galaxy Securities, as of May 10, according to the secondary classification of Galaxy Securities, among the top five fund types with the growth rate in the past one year, QDII funds occupied the top three, and the Hong Kong Stock Connect Standard Index Equity Fund and Hong Kong Stock Connect Enhanced Index Stock Fund ranked fourth and fifth respectively.
The recent rise in Hong Kong stocks is indeed cheering. But in terms of allocation, is the guest officer also guilty of "difficulty in choosing" like Fu Er, and there are so many fund products related to Hong Kong stocks? How to choose?
QDII？ Hong Kong Stock Connect Funds? Hong Kong stock index funds? Actively manage Hong Kong stock funds, etc., so many categories to choose from. How to choose to invest in Hong Kong stocks?
QDII Fund
Qualified domestic institutional investors can invest in overseas markets, including Hong Kong stocks.
QDII quota restrictions may apply.
Hong Kong Stock Connect Fund
Direct investment in the Hong Kong stock market through the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect channels is suitable for investors who have a certain understanding of the Hong Kong stock market and want to directly participate in Hong Kong stock trading.
It is not limited by QDII quota and has good liquidity.
Hong Kong Stock Index Fund (ETF)
Tracks specific Hong Kong stock indexes, such as Hang Seng Index, CSI Hong Kong Stock Connect Internet Index, Hang Seng Stock Connect Hong Kong High Dividend Low Volatility Index, Hang Seng China Enterprises Index, etc., which is suitable for investors who want to diversify their risk.
The trading method is flexible and supports T+0 transactions.
Only when you see it clearly can you see it more accurately.
Up to now, Hong Kong stocks have risen a wave, whether to continue to invest, we need to understand more clearly, what changes have occurred in Hong Kong stocks in this wave of trend?
Hong Kong stocks are not generally rising, and various industries are up and down
According to the Hang Seng comprehensive industry classification, the best raw materials that have risen this year have risen by more than 43%; followed by energy and information technology-related industries, with increases of 36% and 23% respectively. On the other hand, the three leading industries are the information technology industry, which rose by 25%; This was followed by the healthcare sector, which rose by more than 20%.
Note: Data from Wind, as of May 16, 2024.
So at different stages, the performance of the industry is mixed. Among them, the health care industry fell first and then rose, and the short-term rebound was larger; In addition, the real estate construction industry also showed a strong rebound; In addition, the two major industries of raw materials and energy, before April 22, rebounded strongly, but in the recent wave of rising market, the performance was relatively flat, and the rebound weakened.
It can be seen that the recent performance of Hong Kong stocks in the Internet, technology, health care and other sectors has been stronger.
Market capitalization is differentiated, and large market capitalization leaders are more favored
Wind data shows that as of May 16, among the top 10 companies in the net purchase volume of southbound funds in the past 20 days, 6 Hong Kong stocks have a market value of more than 1 trillion yuan. Among the 21 Hong Kong stocks with a net purchase of more than 1 billion yuan in the past 20 days, 20 stocks have a market value of more than 100 billion yuan, and the average market value reaches 870 billion yuan.
Combined with the concept sector, the frequency of keywords such as blue chips, core assets, state-owned enterprises, and central enterprises is relatively high, which shows that in this wave of Hong Kong stock market, large blue-chip and industry leading stocks, as well as high-dividend and high-dividend Chinese companies in industries such as telecommunications, energy, utilities and finance, are more favored by funds, while small-capitalization stocks are relatively less attractive.
Compared to Hong Kong local enterprises
Mainland enterprises performed better
In this wave of Hong Kong stock rebound, there is a difference between the performance of Chinese mainland and Hong Kong local enterprises, with mainland corporate stocks benefiting from the mainland's economic recovery and performing more prominently. As of May 16, Wind data shows that the top five Hong Kong stock-related indices that have risen so far this year are all indexes with Chinese prefixes.
Note: Data from Wind, as of May 16, 2024.
Layout of Hong Kong stocks, the first choice is the "E" package
After seeing these structural changes, the client has a clearer goal for the investment choice of Hong Kong stock fund products.
First, focus on sectors with stronger rebound momentum, such as technology, internet, healthcare, and high-dividend assets.
Wells Fargo Fund has ready-made, "hot and hot" "Hong Kong stock ETF package":
Hong Kong Stock Connect Internet ETF (159792) and its feeder funds Class A 014673, Class C 014674
Reason for recommendation: The index constituent stocks are highly concentrated in Internet companies, with high flexibility and low valuation, and are not subject to QDII quotas.
Hang Seng Healthcare ETF (159506) and its feeder funds Class A 020110 and Class C 020111
Reason for recommendation: Innovative drugs account for nearly 70%, including scarce targets in the pharmaceutical sector.
Innovative drug ETF Wells Fargo (159748) and its feeder fund Class A 019897, Class C 019898
Reason for recommendation: Take advantage of the east wind of "innovation + going overseas" to acquire high-quality innovative drug industry assets in A+H.
Hang Seng Dividend ETF (513950) and its feeder fund Class IA 019260, Class C 019261
Recommended reason: high dividends, low volatility, focusing on the "medium and special valuation" opportunities of Hong Kong stocks.
Note: (1) "T0" refers to the support of T+0 transactions; (2) Source: Wind, as of April 25, 2024. Index constituents are subject to change depending on the index methodology.
Blue Chip QDII Best Product Recommendation Ranked No. 1 in the same category in the past 1 year
Second, what is the performance of QDII funds? Fu Er also has QDII good products to recommend. As mentioned earlier, blue chips are the preferred direction for southbound funds.
Wells Fargo Blue Chip Select (RMB share: 007455), ranked first in the same category in the past 1 year.
Ranked first among 33 similar China open-end funds - QDII Greater China stocks; The yield in the past 1 year reached 13.83%, and the benchmark yield for the same period was 1.84%.
Peer rankings are from Morningstar, and performance benchmarks are from Wind, as of May 13. Past performance is not indicative of future performance. MORNINGSTAR'S MATERIALS ARE COPYRIGHTED BY MORNINGSTAR, AND NEITHER MORNINGSTAR NOR ITS CONTENT PROVIDERS ARE RESPONSIBLE FOR ANY TRADING OR INVESTMENT DECISIONS YOU MAKE IN CONNECTION WITH YOUR USE OF ANY RELATED MATERIALS.
Note: Wells Fargo Blue Chip Select (QDII) was established on 2019/08/02, and the performance comparison benchmark is MSCI China Index Yield * 90% + RMB Demand Deposit Interest Rate (after tax) * 10%. The growth rate of the net value of fund shares in the past 4 full years (2020-2023) (and the benchmark rate of return compared to the performance of the same period) are 95.41% (24.68%), -4.60% (-20.53%), -17.94% (-14.15%), -7.74% (-10.45%), respectively, the data are from the fund's regular report, as of 2023/12/31. Changes in fund managers during the period: Zhang Feng (2019/08/02 to present), Ning Jun (2019/08/21 to present). Past performance of the Fund does not constitute a guarantee of future performance.
Hong Kong stock active equity class good base recommendation:
Driven by the performance of Shanghai, Hong Kong and Shenzhen, the top 5% of the same category
As mentioned earlier, Hong Kong Stock Connect funds, this type of fund invests in Hong Kong stocks through Hong Kong Stock Connect channels, including passive and active. This type of product can easily participate in the Hong Kong stock market and has good liquidity.
The goal of the rich fargo Shanghai-Hong Kong-Shenzhen performance-driven hybrid (Class A 005847) under the rich two is very clear, and the layout of high-quality targets of Hong Kong stocks:
The Fund will grasp the investment opportunities of the interconnection between the A-share market and the Hong Kong stock market, explore the stocks of listed companies with excellent long-term performance and good quality, and strive to achieve long-term stable appreciation of the Fund's assets through the selection of individual stocks and strict risk control.
According to the fund's regular report data, as of the end of the first quarter of 2024, the performance of Wells Fargo Shanghai-Hong Kong-Shenzhen is driven by the Hong Kong stock assets held through Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, accounting for 58.85% and 13.31% of the fund's net asset value, respectively.
According to Morningstar data, as of May 13, it ranked in the top 5% of its peers in the past 1 year, ranking fourth among 82 similar Chinese open-end funds - Hong Kong stock active allocation funds, with a return of 10.01% in the past 1 year and a benchmark return of 0.62% in the same period.
Wells Fargo's Shanghai-Hong Kong-Shenzhen performance drives excellent performance, what is it mainly doing right?
The fund's portfolio of high-dividend positions has performed well, particularly in upstream sectors such as oil and gas. The portfolio added a part of the over-falling consumer stocks and A-share growth stocks after the Spring Festival. (The view is from the fund's 2024 Q1 report)
Note: The ranking results are based on the comprehensive judgment of the evaluation agency based on the past performance of the manager, and do not constitute future investment advice for the fund manager or a single product. THIS DATA IS COPYRIGHTED BY MORNINGSTAR. Morningstar and its content providers are not responsible for any transaction, investment decision made by you in connection with your use of any related information. Past performance is not indicative of future performance.
Wells Fargo Shanghai-Hong Kong-Shenzhen Performance-Driven Hybrid A was established on 2018/07/27, and the performance comparison benchmark is the yield of the CSI Hong Kong Stock Connect Composite Index * 75% + the bank demand deposit interest rate (after tax) * 25% for the same period. The growth rate of the net value of fund shares in the past 5 full years (2019-2023) (and the benchmark rate of return compared with the performance of the same period) are 29.54% (9.81%), 68.26% (5.02%), -5.67% (-10.88%), -15.31% (-7.12%), -11.87% (-9.50%), respectively, the data comes from the fund's regular report, as of 2023/12/31. Changes in fund managers during the period: Zhang Feng (2018/07/27-2019/11/14), Ning Jun (2018/09/05 to present), Zhang Feng (2021/03/04 to present). Past performance of the Fund does not constitute a guarantee of future performance.
Today, the Hang Seng Index rose 1.59% and the Hang Seng Tech Index rose 0.76%, in addition, real estate, banking, and insurance stocks rose. (Data from Wind)
The market for Hong Kong stocks continues~
The core points of its investment value have not fundamentally changed:
➤ Valuation advantage: The overall valuation level of the Hong Kong stock market is low, Wind data shows that as of May 16, the Hang Seng Index PE was 9.95 times, at a historical position of 47%, providing a good margin of safety and investment opportunities.
➤ Policy support: Recently, a number of policy measures have been introduced for Hong Kong stocks, which has further enhanced the market's confidence in Hong Kong stocks.
➤ Improved liquidity: The acceleration of southbound capital inflows has enhanced the liquidity of the Hong Kong stock market. Wind data shows that as of May 16, southbound funds had a net inflow of 11.6 billion yuan in the past week, 22 billion yuan in the past January, and a net inflow of more than 217 billion yuan since the beginning of this year.
➤ Economic recovery expectations: With the gradual recovery of the domestic economy, the earnings expectations of Hong Kong stocks, especially Chinese companies listed on Hong Kong stocks, have improved.
Layout Hong Kong stocks, "beautiful" to do their best, choose good products, and wait for good results.