When can A-shares stop falling and stabilize? What investment strategy should be used to operate at present? The paper.cn reporter after the closing of the collection of ten fund views found that the fund will adjust the main reasons down to two, one is the policy tightening concerns, the second is the high valuation of stocks have not fallen to a reasonable valuation range.
“The main reason for the sharp correction in the market is the rise in the risk-free rate in the US and the initial disintegration of the bond. The rise in risk-free interest rates in the US has the market anticipating a global liquidity tightening.” Chen Ping, a planned fund manager at HSBC Jinxin Innovation Pioneer Fund, said the collapse of the group created a negative feedback mechanism, the opposite of the previous group rally.
Agricultural Bank of China Fund believes that the outflow of capital, core assets continued to pull back, causing a sharp adjustment in the market. However, the appreciation of the dollar against the RMB is limited, and the valuation of blue-chip leading stocks is relatively reasonable, so there is no need to be pessimistic in general.
Referred to the historical experience since 2010, Bo Shi Fund chief macro strategy analyst Wei Fengchun believes that the rapid rise in US bond interest rates brought by the developed and emerging market stock market correction is still not over, and the domestic tight credit expectations are not yet in A share prices, A shares on high position reduction judgment unchanged.
Structurally, Wei Fengchun said, from the market to medium and small market capitalization style rebalancing process can last at least 1-2 quarters, procyclical non-ferrous metals, chemicals, banks are still above the trend, interest rate sensitive insurance also continue to be optimistic.
On the afternoon, in general, most funds believe that the shock consolidation will still be the main tone of the short-term market, can pay attention to the annual report and quarterly report after the disclosure of quality stock investment opportunities.
First, CaiTong Fund: A – share market in the pattern of shock
One reason for the market’s volatility is that rising Treasury yields and expectations of rising inflation expectations have raised fears of policy tightening. Abroad, the US 10-year Treasury yield rose to 1.56%, the US 5/10 breakeven inflation rate rose to its highest since 2008, and domestically, year-on-year PPI growth turned positive in January.
Second, high stocks continue to adjust the valuation. Since the Spring Festival, the food and beverage, leisure services, electrical equipment, medicine and biology, home appliances, automobile industry indexes have fallen by more than 10%, the institutional heavy position plate and some stocks have sharply killed the valuation, the market risk appetite has been reduced, at the same time, the slowdown of the scale of new funds has also led to the stock market incremental capital inflows slowed down.
A – share market in A volatile pattern. The sharp decline of A-shares is essentially the digestion of high valuation. The trend of global economic recovery and A-share corporate earnings recovery in the second quarter remains unchanged. The statement of the government work report is generally in line with market expectations, and fiscal and monetary policies will not make sudden changes. Short-term market risk appetite is under pressure, with the disclosure of annual and quarterly results, high quality stocks are expected to further digest the valuation through earnings growth.
Allocation concerns: 1. Low valuation sectors: banks, insurance, etc.; 2. Chemical sector benefiting from PPI rebound, global economic recovery and improvement of industry competition pattern; 3. Theme investment: carbon neutrality, etc.
Two, Bo when the fund: cut positions on the high
US stocks and US bond interest rate fluctuations on the global stock index impact in the second half, and domestic tight credit expectations have not yet price in A share prices, A shares on the high cut position judgment unchanged. Structurally, from the market to medium and small market capitalization style rebalancing process can last at least 1-2 quarters, procyclical non-ferrous metals, chemicals, banks are still above the trend, interest rate sensitive insurance is also continued to be optimistic, liquor buying machine.
III. ABC Fund: There is no need to be pessimistic in general
The short-term market sharp drop is mainly due to the market expectation moving too fast under the background of global liquidity drive. The real economy is subject to the epidemic situation, and the fundamentals are far behind the asset prices, and the asset prices move too far ahead of the real economy. We believe that the current market concerns are short-term influence factors, do not have to be too pessimistic about the current A share market. Based on the current short-term liquidity tight balance, inflation gradually become the focus of the market background, it is suggested that investors can pay attention to three main line equilibrium allocation. First is the banking, insurance and other low-valuation financial sector. Second benefit from the global production cycle of raw materials and components. The third is a reasonably valued public company on a quality track.
Four, the South Fund: will gradually shrink to stabilize and into the shock stage
The recent market correction is large, but the volume has not seen a significant decline, which makes the market volatility will be at a high level. It is empirically necessary to wait until the heat of trading falls to judge the bottom of the market. Considering that the current weight stocks generally appear a large retreat, while the probability of systemic risk is not large, so it is expected that the market will gradually shrink and stabilize in the later stage and into the shock stage.
In the medium term, the high valuation of equity assets has generated some negative feedback. In the macro liquidity margin tightening background, the market risk appetite is expected to be difficult to return to the high. There is a clear preference for assets with high certainty, namely the performance-to-value ratio of performance and valuation. At the same time, given that many economic sectors have not yet recovered to pre-epidemic levels, the probability of comprehensive policy tightening is unlikely, so there is no systemic risk in the equity market. We predict that the index will be wide shocks as the main theme throughout the year, the process does not rule out periodic or structural declines.
Fifty thousand fund: the market downward space has been very limited
The main reasons are as follows: First, since last year, consumption, new energy and other sectors have increased significantly. The cumulative increase of food and beverage, medicine, power equipment and new energy industries has reached 37.7%, 22.1% and 32.6% respectively. Currently, investors differ greatly. Second, the northbound capital substantial net outflow, affecting market confidence.
Overseas, the US non-farm data exceeded expectations, and the 1.9 trillion economic stimulus plan was passed. At home, thanks to the effective management of the government, the use limit of monetary policy has been effectively optimized, and the economic recovery is expected to be strong. So far, the downward space of this round of market adjustment has been very limited, so there is no need to panic excessively.
Maintain the market view of shock, optimistic about the banking real estate and other cyclical sectors in the first half of the year, recommend the technology, consumer sectors with better growth, such as the benefit of 5G, new energy vehicles, as well as duty-free, home appliances, food and beverage sectors.
6. HSBC Jinxin Fund: Technology assets are generally in a state of low valuation and good orientation
HSBC Jinxin Innovation Pioneer Fund Fund Manager Chen Ping believes that the current position, A shares of technology assets have been more attractive, Hong Kong stock adjustment also makes it possible to buy the core TMT assets at A relatively reasonable valuation.
Chen Ping said that the recent market adjustment has been more, technology assets also adjusted more. The main reason for the sharp market correction is the rise in the US risk-free rate and the incipient disintegration of the bond. The rise in risk-free interest rates in America has led markets to expect tighter global liquidity. The collapse of the huddle creates a negative feedback mechanism, the opposite of the previous huddle rally.
Current position, we think A – share technology assets have been more attractive. In fact, the correction in tech assets began in the middle of last year and continues to this day. Valuations for many tech assets are already relatively low. At the same time, the fundamentals of technology are generally positive. The technology cycle brought by 5G is still advancing, and we will usher in the era of the popularization of 5G terminals and the outbreak of 5G applications. At the same time, 5G and new energy vehicles also bring up the overall demand for semiconductors. It is expected that our semiconductor market share will increase with certainty in the next few years, and China’s semiconductors are ushered in a strategic opportunity period of deep home-made substitution. Therefore, science and technology assets are generally in a low valuation at the same time basically oriented to a good state.
7. Morgan Stanley Huaxin Fund: The possibility that the market will continue to fall sharply is relatively low
The dollar index has rebounded in recent days as Treasury yields hit new highs, and investor concerns about money flowing back into the U.S. market have also contributed to market volatility. However, compared with the horizontal comparison of other markets, the profits and growth of A-share enterprises are attractive to overseas funds for A long time. Therefore, foreign capital is still expected to continue to allocate A-shares.
Domestically, the import and export data for January-February 2021 released over the weekend greatly exceeded expectations, further confirming the trend of continued improvement in the economic recovery. We believe that the possibility of the market continuing to fall sharply is low, but the subsequent style may be relatively balanced. In the market adjustment, we choose more stocks that match the valuation and performance, focus on the allocation opportunities of the cycle and the financial sector, and avoid the stocks that are reported in the early stage in the short term, but keep close attention to the high-quality companies among them.
Eight, Ping An Fund: A shares have entered the “slow rise trilogy” in the calm period
A shares have entered the “slow rise trilogy” in the calm period, the market has A bottom pressure. Previously, under the impetus of funds, high quality blue chip white horse rose too fast, the market adjustment belongs to the normal phenomenon. So the next step is for investors to be patient and invest in these good assets at better value for money. The essence of blue chips and white horses has not changed, and their operating fundamentals are relatively stable. In the long run, they still have good investment value.
On the sector side, cyclical manufacturing, which benefits from economic recovery and carbon reduction and carbon neutral policies, and optional consumption and services, which benefit from economic recovery and epidemic control, may be better. For example, in the middle and upper reaches of raw materials of non-ferrous metals, chemical industry and steel, in the middle reaches of manufacturing of engineering machinery and electrical equipment, in the financial sector of banking and insurance, in the service industry of transportation, tourism, hotels, etc.
IX. Central Europe Fund: It is expected that the market style will return to equilibrium
At present, the static PE of 16.2 times of CSI 300 is still higher than the average of the past five years (12.9 times). Meanwhile, the valuation dispersion of Shenmillion level-1 industry is also at the level of 2015-2016. Under the background of high valuation and still large inter-industry valuation differences, the market itself has greater vulnerability; Slant retail open – end fund holders structure, easy to have a greater impact on the market capital. Compared with professional institutions, individual investors’ sentiment factor performance is stronger, or increase the frequency of fund subscription redemption, which to some extent contributed to the recent adjustment of heavy institutional stocks.
Institutional investors have gradually matured in the past few years, and the proportion of institutional funds in the market has increased rapidly. The capital scale of most institutional investors (especially the top public and private equity fund companies) has increased significantly. In this context, the investment range of stack investors is relatively narrow, and once the consensus is formed, it will lead to a rapid decline. This also reflects the lack of hedging tools for our investors, when the market style is adverse, most of the way to adjust or reduce positions through intense.
Look from drop, most bibcock company is getting close to the value line that he itself place has gradually. Because many of the big gains of the past year have left them relatively far from their intrinsic value, the current market decline is expected to require some correction, both in terms of time and space.
We believe the market will find its centre of gravity in two ways in the future: one is to find a value line for each company through a rapid decline, and the other is to digest the current valuation level in 2-3 quarters and wait for the value line to move up.
At the present stage, the large financial sector and the low-valuation sector are at a low allocation level among institutional investors. In the process of style switching, part of the funds will be rebalanced in structure, although the proportion is not necessarily high, but when such phenomenon appears in the short term, it will also contribute to the rise and fall.
A – share main index after the Spring Festival since the continuous retreat more reflects the change in the capital side. A further correction in the index could trigger a chain of redemptions by base investors and create additional capital risk in institution-heavy sectors such as consumer, pharmaceuticals and technology. However, high-frequency economic data still show that China’s economic growth momentum is strong, overseas monetary policy is still in the expansionary range, after the cycle and growth of investment style switch, it is expected that the market style will return to equilibrium. We maintain our cautiously optimistic view of the market and recommend that investors remain defensive in their portfolios until capital risks ease, increasing allocations to the banking and insurance sectors with rising interest rates and focusing on the real estate sector with a high margin of valuation safety. In addition, although the institutional heavy warehouse industry will still be disturbed by large volatility in the short term, its long-term growth still exists. Under the background of capital risk, consumption, technology and medicine industry is easy to show medium – and long-term buying, which is recommended to pay attention to.
X. Nuoan Fund: Global equity asset prices are under pressure and risk aversion is spreading
The recent market correction has been driven by a confluence of factors, such as rising long-term interest rates overseas and volatile commodity prices, rather than by changes in fundamentals. Last week, the Federal Reserve Chairman Powell’s latest speech did not try to curb the rise of long-term interest rates, the market has been expecting the rise of Treasury yields to maturity, combined with rising inflation expectations, global equity asset prices under pressure, the spread of risk aversion.
Aftermarket focus on market structural opportunities, 1, reasonable valuation, strong profit certainty of the segmented manufacturing industry leader. Scientific and technological innovation and industrial transformation and upgrading will be an important focus of policy deployment, and will provide a boost to mid-stream and high-end manufacturing. 2, carbon neutral theme, especially environmental protection and other sectors with valuation and cost performance. 3, the market risk aversion continues, pay attention to the previous stagflation, policy marginal changes in the banking and insurance sectors. Looking forward, overseas long-end interest rates remain an important factor affecting equity market movements.