Huatai Barry Fund Li Qian: Dividend investment coincides with opportunities | Dialogue fund manager dividend ETF strong "out of the circle" Smart Beta or to meet the development of pro-cyclical market is expected to continue

In the fiercely competitive ETF market, there is such a product, which does not have the popular "track" halo blessing, nor is it a well-known wide-base ETF, but with the characteristics of both attack and defense, it has captured the "heart" of many holders. As of the end of the first half of 2021, the number of share holders of Huatai Berry SSE Dividend ETF (hereinafter referred to as "Dividend ETF") reached 773,500 (data source: Product 2021 Interim Report), ranking first in the ETF market and leading the second place with more than 200,000 households.

This year's market volatility intensified, the market was extremely differentiated, cyclical and growth stocks became the protagonists, and consumer stocks performed sluggishly. According to the data, as of October 22, the Shanghai Composite Index rose by 3.15% during the year, the CSI 300 Index rose by -4.83% during the year, while the Shanghai Dividend All-Return Index rose by more than 17% during the year, and the ChiNext Index and the CSI 500 Index rose by 10.74% and 10.35% respectively during the year.

According to exchange data, as of October 22, the latest share of dividend ETFs exceeded 5.3 billion shares, according to the latest net value, the scale has reached nearly 16 billion yuan, how "fragrant" is the dividend investment? Recently, Li Qian, fund manager of Huatai Barry, said in an exclusive interview with the "International Finance News" reporter that dividend investment has both offensive and defensive attributes, which is relatively more in line with the current changeable market style.

<h1 class="pgc-h-arrow-right" data-track="5" > dividend ETF strong "out of the loop"</h1>

Li Qian joined Huatai Barry Fund in 2015 and currently manages a number of popular products such as dividend ETFs and Hong Kong Stock Connect 50 ETFs.

One of the most "out of the loop" is the dividend ETF. According to the data, this product was established in 2006, tracking the Shanghai Dividend Index, with the decline in risk-free interest rates and the advent of the era of wealth management net worth, the ETF has become one of the "top" ETFs in the market with the characteristics of high dividends, low valuation and pro-cyclical characteristics of the index. According to the fund's regular report data, in the middle of last year, the size of dividend ETFs was only 4.5 billion yuan. A year later, its scale has reached 15.6 billion yuan, with more than 770,000 holders, and it is the only ETF in the market with more than 700,000 holders.

Li Qian concluded that dividend ETFs have two major attributes:

According to Wind's data as of October 22, the dividend yield of the Shanghai Dividend Index (in the past year) is 5.86%, which is not only higher than that of similar dividend indexes, but also higher than the main broad-based indexes of A-shares.

The second is the pro-cyclical industry attribute, among the constituent stocks contained in the dividend index, the distribution of the middle and upstream resource products industry is relatively high, and the market style of this year reflects a certain offensive attribute.

For the performance of the dividend index this year, Li Qian believes that it is mainly due to the rise in the stock price of middle and upper reaches of resource products, especially cyclical stocks, which are even higher than the price of commodities, and the root cause is the market's expectations for medium- and long-term supply contraction. This portion of the gains provided higher gains.

In fact, dividend investment overseas is not a new word, it is one of the foundations of the US stock market to maintain a long bull, Li Qian said: "In the past 30 years, the S&P 500 full-yield index has risen twice as much as the price index, dividends and dividend reinvestment have contributed half of the income, compared with A shares, there is still a large room for catch-up." ”

In addition, the bonus factor also has a defensive attribute. The data shows that the current dividend index price-to-earnings ratio is 5.5 times, and the historical quantile level is about 1%, which is in a very low position. Li Qian believes that from the current valuation level, the dividend index has obvious investment value. Since October 25, the linked fund of the dividend ETF has been issued, opening up a convenient channel for investors without stock accounts to make a fixed investment or long-term holding.

<h1 class="pgc-h-arrow-right" data-track="14" > Smart Beta or boom</h1>

At present, the ETF market is hotter than the industry theme fund, Li Qian bluntly said that with the accelerated withdrawal of graded funds, since the opening of the science and technology innovation board in 2019, the differentiation of the structural market has accelerated the development of theme ETFs.

Since managing ETFs, Li Qian has deeply felt that the Matthew effect and first-mover advantage of the industry are also very obvious. Since 2018, the concentration of fund company management scale has begun to rise continuously, the scale effect is very obvious, the head ETF manager occupies a large amount of scale, and the industry competition has become very fierce.

"If the fund company issues related theme products at the same time, the impact on the market is also diversified, on the one hand, it enhances the popularity of the entire market and the popularity of the product, but on the other hand, it also intensifies the fierce competition, prompting the manager to take the initiative to strengthen its core business and service capabilities." Li Qian said.

As the market's first Smart Beta ETF, the dividend ETF firmly occupies most of this niche market with a scale of nearly 16 billion yuan. But for the Smart Beta strategy, Li Qian believes that the current Smart Beta ETF accounted for a small share of the equity ETF market share, in addition to the dividend factor, the development of other Smart Beta strategy ETFs is slow, and the current stage of investor recognition of such products comes from its dividend attributes or the investment logic of the pro-cyclical industry. From the experience of the US market, with the market becoming more and more mature and professional institutional investors joining, the products of the Smart Beta strategy are expected to gain more recognition from the market, and the future scale development will also enter the fast lane.

<h1 class="pgc-h-arrow-right" data-track="19" > procyclical market is expected to continue</h1>

Li Qian believes that from a macroeconomic point of view, the recurrence of the new crown epidemic has a restraining effect on the consumption of domestic residents, and the consumption data is currently neutral. In the context of the double carbon target, commodity prices are still volatile at a high level. Overall, the economy is still under pressure, but liquidity is relatively abundant, giving a neutral cautious optimism to the stock market.

For this kind of structural market this year, Li Qian believes that the current market style switch is faster, the funds are greatly affected by the emotional side, and in the specific allocation, a defensive offensive strategy can be adopted, and it is recommended to combine growth and value for asset allocation.

"In the process of economic recovery, it is expected to be positive for the pro-cyclical plate." Li Qian believes that the pro-cyclical plate market has not come to an end, but it may be difficult for the plate to have a sharp rise in the market before.

Reporter Xia Yuechao