China Fund Zhong Shuai: still have confidence in the market, new energy or usher in the middle of the bottom

2022-07-28 0 By

The investment road in 2022 is a little difficult to go, especially after the Spring Festival market continued adjustment so that many people feel confused, last year’s brilliant record of the fund and fund managers also ushered in a test, whether to continue brilliant or better control the retreat in the fall, has become the most concerned topic of investors.However, there are also some funds against the current, in the adjustment to show the strength of not common, such as China industry boom, this last year partial shares mixed fund performance runner-up after experiencing market adjustment, counterattack into nearly a year partial shares fund (partial shares mixed + common stock) performance champion.The following is according to the Chinese industry boom fund manager Zhong Shuai recent live content sorted out points of view.Perhaps we can find the secret to the fund’s excellent performance.In the view of Zhong Shuai, from the end of last year to the beginning of this year the overall market adjustment range, speed, there are some beyond expectations.He believes that looking back on the a-share market for nearly five years, this is A relatively large wave of adjustment.As for the reasons for the adjustment, Zhong Shuai believes that one of the main reasons is that the surplus liquidity of the market has periodically appeared problems.”Rights and interests of market liquidity, more emphasis is actually a surplus liquidity, the concept of the surplus liquidity problems occurred in the macro overall liquidity is relatively abundant, the process of the central bank to cut interest rates, influence factors may be – to fake money, north of quantitative trading regulation, and since the beginning of public funds distribution situation is not optimistic, and so on.In the case of relatively better macro liquidity, the residual liquidity of the equity market is a problem. As a result, the market needs to find a new price balance point under the new liquidity environment and the new trading volume level, and adjustment will naturally occur.”Looking afternoon, Zhong Shuai to the rights and interests class market is still full of confidence, he believes, “volatility is part of the market, as the overall volume of the steady, you will find a new start trading price, combined with the current market valuation levels, and in the Chinese market long-term interest rate cut in the process, falling interest rates, we have confidence to the market,However, it remains to be seen how long it will take for the surplus liquidity to recover or whether it will return to the previous level.Zhong shuai also warned investors not to be too obsessed with “can copy to the bottom”.”Such a long time to see, can you copy by the end of the so-called minimum, in many cases are really luck, for us, but it is not particularly concerned about ChaoMei copied exactly, and more importantly, you should think of what you are going to buy stocks, behind the whole level of market reversal or really big rebound came, it can achieve a substantial gains.Look for a good stock, even if copy in the middle of the mountain also doesn’t matter, short-term boil once, carry once on the past.The point is that it will go up when the market is good, which is more important.”Wind data shows that in 2021, the annual rate of return of The Chinese industry is 84.11%, which is comparable to 1530 partial stocks mixed fund performance runner-up.In 2021, the style of the A-share market quickly switched, putting forward A huge test for equity fund management, and the performance difference of the partial stock hybrid fund from the beginning to the end was more than 100 percentage points.Whether it can keep up with the hot spot of the industry in time because of the key to the fund performance, and zhong Shuai’s management of the Chinese industry boom undoubtedly handed in a satisfactory answer.Zhong Shuai admits that he is a relatively high turnover rate of fund managers.”My top 10 heavy positions actually change a lot from quarter to quarter, often making some adjustments dynamically.”The fund’s quarterly report shows that the Chinese industry boom mix top ten heavy positions at the end of the third quarter of 2021 compared with the end of the second quarter change 6, the end of the fourth quarter compared with the end of the third quarter change 5.Referring to the reasons for the shareholding adjustment, Zhong Shuai said that it is mainly from the plate and stock two levels to consider.”For example, in terms of big sectors, in the fourth quarter of last year, we reduced our holdings of some new energy and bought some media and medicine. At the beginning of this year, the initial performance of media and medicine was ok, but recently, with the continuous decline of the market, these strong sectors in the early stage also appeared to make up for the decline.”At the individual stock level, I’m mainly looking at changes in the performance of these companies and whether the overall market’s perception of them has changed.”As a partial stock hybrid fund with excellent performance last year, new energy occupies an important position in the holding of the boom of China’s industry. Since this year, the new energy sector has continued to adjust, but in Zhong Shuai’s opinion, the adjusted new energy investment value is actually improving: “I am still optimistic about the whole new energy industry chain.Before everyone’s most concerned about the problem is that after the sharp rise in the past two years, the valuation of many companies in the new energy sector is relatively high, and the transaction is relatively crowded, and a large number of public fund positions in the whole market are clustered in this industry, so when the market volatility, it is also very severe downward.But these days, in fact, many new energy companies have gradually started to buy back. We think that after adjustment, the valuation of new energy, especially the new energy automobile industry chain, has actually reached a relatively reasonable and comfortable position. Now it should be at least a relatively mid-term bottom.But we are not particularly in a hurry to buy all of them.Such a wave down, it is difficult to immediately achieve a V-shaped reversal, it takes time to bottom, estimated at least a quarter of the time, but we will gradually increase the configuration of new energy, specific direction, we pay more attention to the upstream lithium.”On the recent hot discussion of the new energy vehicle subsidy regression may cause the impact of the plate, Zhong Shuai also said: “With the development of the new energy vehicle industry, the subsidy regression is a natural, in the expected phenomenon, the uncertainty is only the rhythm and speed of the problem.If an industry continues to rely on subsidies to maintain the growth of penetration rate, relying on continuous subsidies to support sales, the industry is actually not promising, and it is not worth investing in.We invest in the new energy vehicle industry is more to see that at least at this point in time, its industrialization and technology have achieved a similar or even very close state with fuel vehicles.But also can see behind the continuous technological progress, for example in the year to basically range of 1000 km of new energy vehicles will be able to come out, in addition, the height of the vehicle intelligent also made rapid progress, the domestic new energy products really let everyone see, feel towards more do more good state of development, these are what we are concerned about.In fact, many growth industries have encountered similar experience, such as photovoltaic.The rollback of subsidies affects share prices in the short run, but it does not affect things much in the long run.What we need to pay more attention to is what kind of penetration level of new energy vehicles in China or the world at present. Is there still a huge space for it?Is the level of permeability upward?This curve does it change smoothly or does it go up quickly?When you have more confidence in the big picture of an industry, everything else is a short-term disturbance.”In addition to bright performance, another factor that attracts investors is that its retracement control performance is good.According to Wind data, since Zhong shuai began to manage China’s industrial economy on July 28, 2020, the maximum fund withdrawal during his term was 11.84% by the end of last year. After adjustment since the beginning of the year, the maximum fund withdrawal during his term was 14.23% by February 22 this year, while Zhong shuai’s return during the same period was 118.81%.As for the secret of retracting control, Zhong shuai believes that the key is not position but holding and structure.”As for the mixed products of Huaxia Industry, which is based on equity assets, it is of little significance to withdraw control only from position control, mainly from shareholding and structure.Compared with the short-term fluctuations of a stock, I care more about its long-term investment value. For example, if you hold a stock with a heavy position and it retracts 10% or more, do you dare to continue to add after the company falls, or do you feel panic and want to chop it back?This is important because I tend to buy more companies with good long-term prospects and low valuations that have a margin of safety. In plain English, I want to own those companies — even if it is a 10-20 point pullback, I would be willing to add, rather than continue to reduce the stock.”Zhong also said he prefers to invest in companies that feel secure when buying.This steadfastness is inseparable from his frequent research on the company.According to zhong shuai’s previous interviews, his research framework is based on the industrial chain, and his research frequency is very high.In order to keep sensitive to the changes of the industrial chain, except every Monday in the company, From Tuesday to Friday and even weekends, he basically investigates the upstream and downstream of the industrial chain in different places.When I investigate a company in the industrial chain, I will also investigate other companies around the company that may have opportunities. Even if the company has no opportunities at present, I can timely find signs of changes in the industrial chain through such high-intensity research, so as to find investment opportunities earlier.When it comes to their stock selection structure, Zhong shuai said he was concerned about two points.”First, I am a growth stock, so I choose the growth industry with high prosperity, not to mention the track, I require the long-term growth of these companies in the industry should be enough, that is, to be in a relatively prosperous, rapid industrialization, high growth state.The second relatively low valuation or reasonable valuation, is in the high economic growth industry to choose some stocks, its valuation at least in my framework is acceptable, for example, THIS company I think the future will have 40 or 50 times of growth, the current valuation of more than 20 times, this is ok.If it is possible to double the growth every year in the future, the valuation of 50 or 60 times can also be.But you can’t say you’re on a special growth track, but maybe 20 or 30 times growth in the future, and then you give me 40 or 50 times, and I’m probably done.In general, I just look for some relatively low valuations in the high growth track to invest.”Zhong also said he pays more attention to long-term value when picking stocks.”I think if some companies can see it a little bit longer, I am willing to buy, but with the logic of the growth of the buying cycle is the same, is I need you to give me a reason, or let I have enough confidence, let I can see a long, such as to see the next three years or five years, but in the process, if you happen to have an overlay with short cycle,I would love to buy it, but if something doesn’t grow and just says tell me it’s going to be good for the next two quarters, it’s going to be good for the next three quarters, and I don’t know what next year is going to be like, it’s not worth it.”In addition to excellent performance, another reason for Huaxia’s industry boom to gain market attention lies in its rapid scale growth in 2021.Fund regular report shows that the business scale of Huaxia industry increased from 90 million yuan at the end of the first quarter of last year to 12.298 billion yuan at the end of the year, and the scale of the three quarters increased by more than 135 times.Specifically, in the second quarter of 2021, the business scale of Huaxia industry increased from 90 million yuan to 770 million yuan, an increase of 7.5 times.At the end of the third quarter, it increased to 7.26 billion yuan, and its scale increased by 8.4 times.In the face of the rapid growth of the scale, the products began to limit the purchase, China Amc announced that starting from July 27, 2021, China AMC will restrict the subscription, regular subscription and conversion to business, and the cumulative one-day subscription amount of a single investor will not exceed 500,000 YUAN.In this regard, Zhong shuai said: “We carried out a large purchase limit last year in the hope that the scale of The Chinese industry to achieve a relatively stable state.For individual fund managers, there is bound to be an upper limit to the scale each person can manage, which requires fund managers to choose a balance point.Managing a very small fund, no matter how well it performs, makes little sense because it does not make money for more people.Not only do individuals need to find a balance that they are comfortable with, but they also need to get the scale and business model right to make money for as many holders as possible.And as the fund gets bigger and you can invest in different volumes, there are more things that interest you.”The rapid growth of the scale comes from investors’ recognition of the fund performance and the fund manager’s investment ability. However, when China Huaxia industry grows into an active management fund of over ten billion yuan, some people worry whether Zhong Shuai’s ability can cope with the impact of the scale growth.Zhong Shuai have their own thinking about it, also give the honest answer: “my original investment style is partial small and medium-sized market growth, when increasing the scale, I actually faced with two choices, first, abandoned the original style, to buy some big stock, buy, buy partial baima company, so can maintain combination in stock number remains the same.Second, try to maintain the same style, but increase the number of shares significantly.As for the influence of scale on performance, IN fact, I have thought about it a lot. I think the source of performance, in the final analysis, should come back to your own investment framework, which supports you to do well in the past, and supports you to achieve good performance and low retracement.So we see the latest disclosure of the Chinese industry boom quarterly report will find that I actually tend to use the second way, is to try to maintain their own investment style, or partial small market value growth.But this process will definitely be more tiring. For example, in terms of numbers, it used to be possible to do in-depth research on a dozen companies, but now it is more than 40 companies, and maybe more in the future.But I prefer not to let the growth of my fund affect my investment style, and to increase the number of stocks to cope with the expansion.Of course, this balance point is also a dynamic search process.I think the current scale is ok, not completely uncontrollable or difficult to control, or a relatively adaptable state.”This article is from the financial community