Zhao Yuanyuan, Investment Director of Jianhong Times: Create sustainable investment returns with the timing strategy of industry rotation

From the front-line analyst of a large securities company to the fund manager of two public funds, Zhao Yuanyuan, investment director of Jianhong Times, has a wealth of experience in the field of financial investment. Since joining Qianhai Jianhong Times Asset Management Co., Ltd. (hereinafter referred to as Jianhong Times) in 2019, the equity strategic private equity products it manages have also continued the better performance in the public offering industry for more than 5 years. A few days ago, Zhao Yuanyuan said in an exclusive interview with China Securities News that in the short and medium term, the market operation risk will still be relatively limited, and growth stocks in the second half of the year are expected to still have more advantages. For Jianhong Times, the company will continue to select individual stocks in the long-term boom track and superimpose the timing strategy of the industry rotation in order to continue to obtain better investment returns.

Growth stocks will still have more advantages in the second half of the year

For the short-term and medium-term trend of the A-share market, Zhao Yuanyuan said that the domestic monetary policy has just experienced a comprehensive reduction in the RRR, and the probability of interest rate cuts and re-RRR cuts is not large in the case that raw material prices have been controlled and the profit margins of middle and downstream small and micro enterprises will not continue to be compressed. Therefore, the changes in the monetary policy orientation and exchange rate of foreign central banks such as the Federal Reserve, and the resulting northbound capital inflow and outflow, will have a greater impact on the A-share market. Overall, the current foreign epidemic situation is still not optimistic, and the Fed is expected to turn "dove" on the margins. In this context, the downside risk of the overall stock index in the A-share market is limited, but the performance of large-cap stocks may be relatively weak.

At the same time, Zhao Yuanyuan pointed out that in the internal structure of A-shares in the second half of the year, it is expected that growth stocks will have more advantages. On the one hand, in an environment where the monetary environment is slightly looser and inflation expectations are falling month by month, the risk appetite of the A-share market will continue to improve, which is still good for growth stocks. On the other hand, if the overseas epidemic, especially the epidemic in the United States, is controlled, and the speed of inflows of funds from the north to A-shares slows down in stages, foreign funds may also reduce the allocation of large-cap stocks and highlight the relative returns of growth stocks.

In terms of specific strategies, Zhao Yuanyuan said that the long-term optimism of the jianhong era in advanced manufacturing, Huawei ecology and boom upstream semiconductor and other industries are in line with the bottom-up fundamental evaluation system and the risk appetite of the market in the second half of the year, and it is expected that alpha gains will be more likely to be generated in the long term in the future.

Create returns with an industry-based timing strategy

In terms of investment research system and stock selection methods, Zhao Yuanyuan said that she herself emphasizes the combination of top-down and bottom-up, and on the basis of taking into account the bottom-up selection of tracks, she pays more attention to starting from macro and industry meso, and making time-based judgments on positions and industry rotations. In order to avoid the market "beta risk" at the same time, through pragmatic micro-tactics, at each stage to strive to find industries with excess returns and high-quality targets.

In terms of stock position management, it is mainly based on a set of high-frequency macro indicators to track changes in growth expectations at home and abroad, marginal changes in base currencies at home and abroad, and the impact of capital inflow and outflow. In terms of industry rotation, it mainly tracks the market risk appetite characterized by interest rates and spreads, quantitatively measures the impact of institutional behavior on the industry style, the way the industry responds to information, and the "echo intensity" of various sub-industries within the industry.

In addition, the company adheres to bottom-up stock selection, and the research department selects stocks in the long-term prosperity track, and scores according to the industry prosperity, competitiveness in line with industry characteristics, the compatibility of the company's strategy and industry development direction, incentive mechanism and other dimensions. This investment system stems from Zhao Yuanyuan's rich investment and research background accumulated over the past many years. Zhao Yuanyuan has 7 years of experience in macro strategy research in Guotai Junan Securities and other institutions, and has continuously optimized this timing strategy during the 5-year public offering product management of Caitong Fund and China Commercial Fund. Relevant data show that in the whole year of 2020 and the first half of 2021, the equity private equity products managed by it have performed well.

For absolute return investment, Zhao Yuanyuan said that only by "doing the right thing in the right direction" can we truly achieve a truly sustainable and long-term investment return for our customers. Compared with the bottom-up single stock selection strategy, starting from the industrial cycle and macro cycle, long-term industry allocation and medium-term industry rotation will be able to avoid the shortcomings of a large drawdown of an industry affected by the macro and risk preference cycle, and better achieve steady growth of net value.