Introduction
On the whole, in terms of the equity market, the first half of the year was still in a state of bottom range shock, and structural differentiation continued. As the cycle lengthens, the equity market may already be at the bottom of the long cycle, and in the future, it may be able to grasp more investment opportunities with a positive attitude. In terms of the bond market, the overall easing of funds after the cross-quarter period is still strong, and the two important meetings to be held in July may also affect the expectations of the bond market, and there are still more structural opportunities worth tapping. Looking ahead, what are the investment opportunities in active equity, fixed income, quantitative indices and multi-asset sectors that are worth paying attention to and grasping? Let's listen to the in-depth views and investment research judgments of Penghua's fundamental investment experts.
Yan Siqian
General Manager/Investment Director of Equity Investment Department III of Penghua Fund
There may be a shift in market style after August, and there may be opportunities for technology and growth stocks. In the medium and long term, science and technology will still be the key direction of economic transformation, and policies will continue to be introduced. In the medium and long term, new energy and new power systems are the general trend of global development, and the leaders of the main new energy industry chain will usher in the bottom opportunity.
The yield of 10-year treasury bonds hit a new low, further reflecting the downward expectation of the return on long-term assets of the whole society, and the short-term policy continued to exert force, but the results were good, and the value of high-dividend asset allocation continued to be highlighted. In terms of policy, it will continue to support, the purchase restrictions in many places of real estate continue to be relaxed, and the Third Plenum is expected to make efforts in the direction of taxation and electricity reform, which is good for the direction of pro-cyclical and policy support. However, external uncertainties, such as the US election and Indonesia's introduction of 200% tariffs, have further increased concerns about overseas tariffs and exports. Incremental funds in the broader market are limited, and value stocks are expected to continue to dominate in July. In July, we began to enter the semi-annual report performance period, focusing on stocks with low valuation performance exceeding expectations. During the interim reporting period, it is expected that some central state-owned enterprises will carry out secondary dividends, which is also worth paying attention to. In our view, there may be a shift in market style after August, and there may be opportunities for technology and growth stocks. In the medium and long term, science and technology will still be the key direction of economic transformation, and policies will continue to be introduced. The world is also in the technology cycle, with the proportion of global technology market capitalization/revenue led by AI rising, and the global technology cycle is also at the bottom of the inventory cycle, and the fundamentals of the mature technology field are also showing an inflection point. China is in a transition period when new quality productivity has become the engine of economic growth, and the growth direction continues to be optimistic about AI and technology-related opportunities, such as AI computing power, semiconductors, Apple industry chain, ARVR, new energy and new technologies, unmanned driving, humanoid robots, satellite Internet, low-altitude economy, etc. The main industrial chain of new energy is affected by overcapacity and trade frictions in the export chain, and there is still uncertainty in the fundamentals, and the stock price has been falling for 2 years or more. In the medium and long term, new energy and new power systems are the general trend of global development, and the leader of the main industrial chain of new energy may usher in the bottom opportunity.
Jin Xiaofei
Deputy General Manager of Equity Investment Department II of Penghua Fund
Structurally, we are optimistic about the sectors in the compound, such as traditional Chinese medicine, blood products, generic drugs, innovative drugs, devices, etc.; At present, our position is still concentrated in innovative drugs, which is the most optimistic sector in the new pharmaceutical cycle in the future, and is currently constrained by the sluggish risk appetite of the industry and its performance is weak. The pharmaceutical sector has experienced a long-term sharp decline, especially in the second quarter, the institutions in the market have significantly reduced their positions, the chips have been further cleared, and the follow-up sector is expected to gradually stabilize, and we are still optimistic about the development of the innovative drug industry and the elasticity of stock prices.
Pharmaceuticals fluctuated and fell throughout the second quarter, and there were not many opportunities in the sector. Structurally, we are optimistic about the sectors in the compound, such as traditional Chinese medicine, blood products, generic drugs, innovative drugs, devices, etc.; At present, our position is still concentrated in innovative drugs, which is the most optimistic sector in the new pharmaceutical cycle in the future, and is currently constrained by the sluggish risk appetite of the industry and its performance is weak. The pharmaceutical sector has experienced a long-term sharp decline, especially in the second quarter, the institutions in the market are significantly reducing their positions, the chips are further cleared, and the follow-up sector is expected to gradually stabilize, we are still optimistic about the industrial development and stock price elasticity of innovative drugs.
Yang Fei
Deputy Director of Equity Investment Department 1 of Penghua Fund
Optimistic about the overall performance of the market in July, in which the technology sector will have significant excess returns. domestic industrial policies support the digital economy led by artificial intelligence; Overseas artificial intelligence technology leads the world, and AI technology continues to iterate rapidly; Artificial intelligence is also an area where a large amount of global capital continues to gather, so we are firmly optimistic about the continued investment opportunities in the AI-led technology sector.
Optimistic about the overall performance of the market in July, in which the technology sector may have significant excess returns. The domestic and foreign capital markets will continue to maintain a high risk appetite due to the slow recovery of the domestic and foreign macroeconomy, the liquidity remains abundant, especially the market expectation of the U.S. economy is stable before the U.S. election. domestic industrial policies support the digital economy led by artificial intelligence; Overseas artificial intelligence technology leads the world, and AI technology continues to iterate rapidly; Artificial intelligence is also an area where a large amount of global capital continues to gather, so we are firmly optimistic about the continued investment opportunities in the AI-led technology sector. In the field of artificial intelligence, computing power is led by NVIDIA, C-end applications are led by Apple, and B-end applications are led by Microsoft. In the medium and long term, only leading companies with core competitiveness within technology stocks will have the opportunity to share this technology feast, and we believe that the leading companies must have the characteristics of being far ahead in China and strong competitiveness overseas. At present, the main line of global technology investment is basically focused on the field of artificial intelligence, and in addition to artificial intelligence, there is also a main line of domestic substitution investment in China, so we are most optimistic about artificial intelligence and domestic substitution. Artificial intelligence consists of two main lines: one is the NVIDIA industry chain, which is mainly AI computing power; The other is the Apple industry chain, mainly the AI intelligent terminal industry chain, and the main line of domestic substitution is mainly concentrated in semiconductor equipment platform companies and industrial automation platform companies. In terms of industry configuration, we are optimistic about electronics (Apple industry chain, semiconductors, AI servers, PCB, etc.); communication (optical module, etc.); Computers (industrial automation, such as large PLCs and industrial robots, etc.).
Zhang Huaen
Fund Manager of Penghua Fund Research Department
There is no doubt that the current equity market is already in the bottom range of the long cycle, although the time to grind the bottom will be longer, but in terms of investment, we still hope to be able to respond with a positive attitude, to find companies that can accumulate strength at the bottom and are expected to continue to hit new highs in the future profit center to layout.
In the first half of the year, the equity market was still in a state of bottom range shock, and structural differentiation continued. One of the key changes in the market this year has been the gradual return to pricing effectiveness, with earnings growth and high-quality factor-driven excess returns increasing in addition to dividend assets, making active investing more proactive. At the macro level, although the large beta is still weak, some positive changes in the structural direction are still valuable, whether it is following the growth of overseas demand, or the release of the industry's own stock renewal demand after long-term adjustment, many areas have begun to show more bottom characteristics.
From an investment perspective, there is no doubt that the current equity market is already in the bottom range of the long cycle, although the grinding time will be longer, but in terms of investment, we still hope to be able to respond with a positive attitude, to find companies that can accumulate strength at the bottom and are expected to continue to hit new highs in the future profit center to layout. In terms of direction, we will focus on the following areas: first, in the consumption and manufacturing industry, there is really an opportunity to go out in the direction of going overseas, although there are external uncertainties such as trade frictions, but in the long run, it is still an important source of increment; Second, the industry pattern in some areas of the traditional industry is in a state of further optimization, and the leading companies with strong product potential and operational capabilities have more obvious advantages, and there is a possibility of further improvement in share and profitability; The third is the release of the renewal demand of part of the stock equipment market, the last round of domestic capital goods investment peak in 2016-2020, the current many equipment have entered a conventional new cycle, government policy promotion and market spontaneous update demand resonance, will also bring potential investment opportunities in the field of stock. At the same time, we are also actively concerned about the new changes in science and technology that may bring more than expected at the level of smart hardware.
Liu tao
General Manager of Bond Investment Department II of Penghua Fund
Looking ahead, the overall easing of funds after the cross-quarter period and the allocation force are still strong, and the central bank's intervention in the market may be the core influencing factor for the short-term bond market. The two important meetings to be held in July may also affect bond market expectations, and bond market volatility may increase. In terms of coping strategies, it is necessary to respect both the central bank and the market, and there are still many structural opportunities in the bond market that can be tapped.
The economic data in June continued to be flat, and the PMI data remained below the boom and bust line. In May, real estate easing policies were introduced in various places, and the sales data in June improved month-on-month but remained weak year-on-year. At the end of June, there was a seasonal rise in capital prices, but the adjustment of short-term credit bonds was limited, and the allocation force of the bond market continued to be strong, which may be due to the fact that the rectification of banks' "manual interest supplement" is still continuing. The market has been somewhat blunted by the central bank's risk warning on long-term Treasuries this month, with the 30-year Treasury yield again approaching 2.40% at the end of the month. On July 1, the central bank announced that it intends to carry out securities borrowing operations, and then borrow securities to sell long-term treasury bonds to directly intervene in the market. Looking ahead, the overall easing of funds after the cross-quarter period and the allocation force are still strong, and the central bank's intervention in the market may be the core influencing factor for the short-term bond market. At the same time, the two important meetings to be held in July may also affect bond market expectations, and the bond market volatility may increase. In terms of coping strategies, it is necessary to respect both the central bank and the market, and there are still many structural opportunities in the bond market that can be tapped.
Wang Shiqian
General Manager of the Multi-Asset Investment Department of Penghua Fund
The subsequent performance of the convertible bond market may be similar to that of the stock market, presenting structural opportunities, with better elasticity of equity-to-bond swaps relative to debt-to-debt swaps.
In terms of macroeconomy, recent economic data reflect that domestic demand has weakened, and the contradiction between production and demand has increased, for example, the PMI data in June reflects the slowdown in production and procurement activities driven by the weakening of new orders, but the overall economic apparent data is still relatively stable, and the probability of policy "strong medicine" is still small. In the bond market, the yield of the bond market as a whole still maintains a downward trend while the financing demand is still not in sight to turn around and the demand is still weakening. At present, the overall yield of the bond market is low, the transaction is relatively crowded, and there is a possibility of short-term technical adjustment, but the downward trend of bond market yields may continue if the overall policy tone does not change significantly.
In terms of the stock market, in the context of the overall weakness of social finance and the increase in short-term downward pressure on the economy, the stock market as a whole may still show a volatile pattern, but in the environment of low overall valuation and abundant market liquidity, the stock market may present structural opportunities, the dividend style may still perform steadily, and the advantage of the large-cap style over the small-cap style may also continue. Some subdivisions may also have performance, such as electronics industry-related companies that benefit from the global artificial intelligence industry trend, the shipping industry and shipbuilding industry that are affected by the war and continue to have tight supply, upstream resources such as copper that have been tight for a long time, and power equipment, rail transit equipment and other sectors that benefit from the growth of demand driven by domestic policies.
In terms of the convertible bond market, the convertible bond market began to stabilize after some institutional investors sold low-priced convertible bonds in June, which led to panic selling in the market. Under the downward trend of bond market yields, it is unlikely that the valuation of the convertible bond market will be significantly compressed, and the allocation demand of the convertible bond market is still more, so the short-term valuation compression may have come to an end. The subsequent performance of the convertible bond market may also be similar to that of the stock market, presenting structural opportunities, with better elasticity of equity-based convertible bonds compared with debt-to-debt swaps. Large-cap convertible bonds as a whole benefit from the large-cap style may perform more smoothly, and small-cap convertible bonds have higher odds, but they need to select targets with relatively high-quality fundamentals.
Wang Kun
Deputy General Manager of Mixed Asset Investment Department of Penghua Fund
At present, the economy is in a stage of stable development, but the inflation level and price level have not improved significantly, in this context, the entire interest rate level, especially the short-end interest rate level, is difficult to rise significantly, and the bond market is in a favorable pattern. In the context of concessions to entities, there is still the possibility of easing monetary policy in the future, and the short and medium end can still be, and the follow-up portfolio will maintain steady operation.
At present, the economy is in a stage of stable development, but the inflation level and price level have not improved significantly, in this context, the entire interest rate level, especially the short-end interest rate level, is difficult to rise significantly, and the bond market is in a favorable pattern. In addition, the recent European election has brought great uncertainty, and the U.S. election in the third quarter is also a big change to face, the domestic real estate market is still in the process of recovery, and there is no overheating; Under the background of concessions to entities, there is still the possibility of easing monetary policy in the future, and the short and medium end can still be used, and the follow-up portfolio will maintain steady operation.
Wang Kangjia
Assistant Director of Cash Investment Department of Penghua Fund
Looking forward to July, in the first half of the year, pay attention to the changes in capital prices, and it is expected to fall back from the end of the quarter after the cross-quarter, which is beneficial to the short and medium end, and the long end is expected to be affected by the central bank's open market trading of treasury bonds, and is expected to be volatile. In the second half of the year, we will pay attention to the impact of factors such as policy expectations, the acceleration of government bond issuance, and the capital of the July tax period on the bond market.
The official manufacturing PMI in June was 49.5%, unchanged from the previous month; After the 5.17 New Real Estate Deal, the margin of real estate transaction volume has improved, the transaction volume of second-hand houses is better than that of new houses, and the overall economic fundamentals have maintained a moderate recovery trend. The central bank over-injected OMO during the tax period and at the end of the quarter to stabilize fund fluctuations, and the fund price fluctuated in a narrow range throughout the month. The supply of government bonds is slow, the allocation of wealth management products is under great pressure, and the shortage of assets has not been alleviated. Overall, the bond market remains in a favourable environment.
Looking forward to July, in the first half of the year, pay attention to the changes in capital prices, and it is expected to fall back from the end of the quarter after the cross-quarter, which is beneficial to the short and medium end, and the long end is expected to be affected by the central bank's open market trading of treasury bonds, and is expected to be volatile. In the second half of the year, we will pay attention to the impact of factors such as policy expectations, the acceleration of government bond issuance, and the capital of the July tax period on the bond market.
Su Junjie
General Manager of Quantitative and Derivatives Investment Department of Penghua Fund
Judging from the calendar effect, there is a high probability that the market will have an adjusted phased rebound in July. The "Kote Valuation" market is expected to ferment in the divergence, and it will perform under the catalysis of events and performance. Whether it is longitudinal or international comparison, the current valuation level of the science and technology innovation sector is at a low level and has some room for growth.
The market fully priced in a weak recovery, and returned to the cost-effective range again after the risk was released. Since May, with the fluctuation of economic fundamentals and the failure of the policy game, the market has continued to adjust and the net outflow of foreign capital has been renewed, and the risk factors have been fully priced. The market fell back below the key point, and the large net inflow of related ETFs highlighted the recognition of long-term capital for the cost-effectiveness of the current position. From the perspective of the calendar effect, there is a high probability that the market will have an adjusted phased rebound in July.
The "Kote Valuation" market is expected to ferment in the divergence, and it will perform under the catalysis of events and performance. Whether it is longitudinal or international comparison, the current valuation level of the science and technology innovation sector is at a low level and has some room for growth. At present, there is a large divergence in the expected outlook of investors on the technology sector, just like the market divergence when the concept of "medium and special valuation" was proposed, and after a period of divergence and volatility, the consensus is expected to gradually strengthen. At the Third Plenum of the Central Committee of the Communist Party of China held in mid-July, "new quality productivity" may become the focus of policy and form a potential catalyst for the science and technology market. At the same time, with the advent of the earnings season, the clues of performance improvement in the direction of science and technology will also have a positive impact on related stocks.
Luo Yingyu
Fund Manager of Quantitative and Derivatives Investment Department of Penghua Fund
At present, our judgment that the market will remain in a wide range remains unchanged. Since the second quarter, the central government has intensively launched scientific and technological innovation policies, and we expect that the market investment concept will return to equilibrium in the next stage.
At present, our judgment that the market will remain in a wide range remains unchanged. The economic situation and macroeconomic policies are in the process of slow change, and from a practical point of view, the recent economic and financial data is still weak overall, although there has been a slight marginal improvement. It remains to be seen how the effect of the policy will appear and verify, especially the macroeconomic improvement brought about by the real estate policy, and the marginal alleviation of the effect of the credit crunch, which is still gradually emerging. From the perspective of expectations, the reform measures that may be promoted by the convening of the blockbuster meeting are conducive to stabilizing market demand and expectations, and the policy rhythm remains determined, and the national leaders have recently stated that the policy tone is clear, that is, after several years of impact of the epidemic, the economic operation seems to be curing from a serious illness, and can not be drastically medicine, China's economy needs to "consolidate the foundation and cultivate the yuan", and when adopting major policies in macroeconomic regulation and control, more emphasis will be placed on the combination of long and short, and both the symptoms and the root causes will be treated, which means that the probability of substantial stimulus policy promotion is reduced. From an external macro point of view, the U.S. stock market will place more emphasis on monetary easing in the second half of the year, which will form a certain constraint on the RMB exchange rate and monetary policy space. From the perspective of allocation strategy, it is still recommended to balance the allocation and appropriately rebalance in the direction of technological growth. Since the beginning of this year, thanks to policy support and the downward push of long-term treasury bond interest rates, dividend and dividend strategies have prevailed, resulting in crowded market transactions in the dividend direction. From last year's encouragement of the market to re-evaluate high-quality central state-owned enterprises such as high dividends and high cash flow, to this year's increase in policy focus on innovative technology enterprises, the China Securities Regulatory Commission issued the "Eight Articles of Science and Technology Innovation" at the Lujiazui Forum, and the intensive introduction of scientific and technological innovation policies at the central level since the second quarter, we expect that the next stage of market investment philosophy will return to equilibrium, supported and guided by industrial policies. The growth direction of science and technology supported by solid fundamentals is expected to attract market attention. In terms of specific varieties, we can pay attention to the low-level layout opportunities in semiconductors, media, intelligent networked vehicles and other sectors.
Zhang Yuxiang
Fund Manager of Quantitative and Derivatives Investment Department of Penghua Fund
The State Council recently issued the "Opinions on Developing the Silver Economy to Improve the Well-being of the Elderly", and the country's top-level strategy has gradually changed from "treatment-centered" to "people's health-centered", and recognized the leading role of traditional Chinese medicine in the prevention of diseases, and the traditional Chinese medicine industry is expected to continue to benefit in the long run.
In order to actively respond to the aging of the population, cultivate new momentum for economic development, and improve the quality of people's lives, the State Council recently issued the "Opinions on the Development of the Silver Economy to Enhance the Well-being of the Elderly", the document focuses on the development of people's livelihood, solves the urgency, expands the supply of products, improves the quality level, focuses on diversified needs, cultivates potential industries and strengthens the guarantee of factors, and optimizes the development environment A total of 26 opinions are put forward. Strengthen the construction of geriatric departments in general hospitals and traditional Chinese medicine hospitals, and speed up the construction of rehabilitation hospitals, nursing homes, and palliative care institutions. Expand the application of traditional Chinese medicine in the field of health care, develop traditional Chinese medicine services such as geriatric diseases and chronic disease prevention and treatment, and promote the research and development of traditional Chinese medicine rehabilitation equipment. In 2023, China's population aged 65 and above will account for 15.4%, an increase of 5.7% compared with 2013; In 2023, per capita health care expenditure will account for 9.2%, an increase of 2.3% compared with 2013. The national top-level strategy has gradually changed from "treatment-centered" to "people's health-centered", and the leading role of traditional Chinese medicine in the prevention of diseases is recognized, and the traditional Chinese medicine industry is expected to continue to benefit in the long run.
Yang Yajie
Deputy General Manager of Stable Income Investment Department of Penghua Fund
In the bond market, after the cross-quarter, the interbank funding side is expected to remain loose, and the logic of asset underallocation of various types of institutions has not yet been reversed. The central bank borrowed bonds to correct the shape of the yield curve, and it is expected that the curve will show a certain steepening, and the relative value of the short and medium end will be better. In terms of equity, it is expected that the dividend style will remain the main line.
The domestic economic fundamentals are still in a slow recovery channel, waiting for the policy signals released by the Third Plenum. After the first round of the presidential debate in the U.S. election, markets began to price in the likelihood of Trump coming to power. Trump's domestic policy has a tendency to be fiscal and monetary easing, and the long-end yield of U.S. bonds has risen significantly. The adoption of an aggressive tariff policy may have an adverse impact on the mainland's export growth.
In the bond market, after the cross-quarter, the interbank funding side is expected to remain loose, and the logic of asset underallocation of various types of institutions has not yet been reversed. The central bank borrowed bonds to correct the shape of the yield curve, and it is expected that the curve will show a certain steepening, and the relative value of the short and medium end will be better. In terms of equity, it is expected that the dividend style will remain the main line.
Hao Lili
Deputy General Manager of the International Business Department of Penghua Fund
In terms of credit bonds, as market risk appetite improved and credit spreads narrowed, Chinese dollar bonds generally showed a higher yield than investment grade this year. We don't think there is much room for further contraction in credit spreads, but due to limited supply, the probability of outperforming the high static yield portfolio is still high, and the convertible bond sector may consider opportunistic allocation.
Despite the more hawkish than expected FOMC meeting in June, the latest data showed a clearer downward trend in inflation, the cooling of the labor market was recognized, and inflation concerns in the market have also dropped sharply, and US Treasury yields have fallen to a higher level, and we expect to enter a continuous cycle of interest rate cuts from the second half of the year. As inflation expectations and the starting point for interest rate cuts become clearer, U.S. Treasuries will form a volatile pattern in a narrower range, and further downside will take longer for data to validate. The European Central Bank and many other central banks have already started the interest rate cut cycle first, although it is unlikely to cut interest rates in July, the US dollar still tends to be strong, which has a suppressive effect on emerging market exchange rates, and with the seasonal factors in June and July also weakening, we expect the RMB exchange rate against the US dollar to be difficult to reverse the trend in the short term.
In terms of credit bonds, as market risk appetite improved and credit spreads narrowed, Chinese dollar bonds generally outperformed investment grade with high yields this year. We don't think there is much room for credit spreads to shrink further, but the probability of a high static yield portfolio outperforming is still high due to limited supply, and the convertible bond sector may consider opportunistic allocations.
Tang Zhiyan
Deputy Director of Stable Income Investment Department of Penghua Fund
At present, the market is pessimistic, and purely from the perspective of asset cost performance, it is inevitable to be more optimistic about the allocation opportunities of equity. After the collapse of liquidity in January and the recent back-and-forth declines in small-cap companies, it may not make much sense to reiterate the risks of small-cap companies, and it is more rewarding to look for opportunities to be wrongly killed, even if they are not cost-effective in the current market environment.
At present, the market is pessimistic, but we put aside the subjective logical narrative and look at it purely from the perspective of asset cost performance, we must be more optimistic about the allocation opportunities of equity at present.
In terms of equity, we saw that the return of equity assets in the first half of the year was basically proportional to the market value of the company, which is a rare situation in the past many years. If the strength of high-dividend stocks in the face of uncertain economic prospects is justified, sectors such as banks and coal where fundamentals diverge from stock price movements are even more puzzling. The last time small-cap stocks significantly underperformed the index was in 2017, when small-cap stocks were in the downturn of the 2014-2015 market bubble and were extremely highly valued. The current rejection of small-cap companies seems to have become a consensus in the market, citing declining shell value, illiquidity, accelerated delisting of listed companies, and unstable profits, which is diametrically opposed to the pursuit of small-cap companies in the previous two years. And we think that after the collapse of liquidity in January and the recent back-and-forth declines in small-cap companies, it may not be as meaningful to emphasize the risks of small-cap companies, and the more valuable work is to look for opportunities to be wrongly killed, even if these jobs are not cost-effective in the current market environment.
Li Jun
Fund Manager of Stable Income Investment Department of Penghua Fund
From the perspective of macro cycle and asset price-performance, we believe that we should be vigilant against bond risks and pay more attention to equity allocation opportunities. At the moment we are still struggling at the bottom of the cycle, but this also provides us with a good allocation opportunity, and our main focus should be on finding certainty as much as possible in the bottom area.
From the perspective of macro cycle and asset price-performance, we believe that we should be vigilant against bond risks and pay more attention to equity allocation opportunities. At the moment we are still struggling at the bottom of the cycle, but this also provides us with a good allocation opportunity, and our main focus should be on finding certainty as much as possible in the bottom area.
Specifically, bonds are not exposed to duration and credit risk as much as possible, and the underlying income is obtained, which serves as a safety cushion and plays a macro hedging role.
In terms of equity, whether from various quantitative statistical indicators or from the perceived temperature, we can clearly perceive that the current equity market is already in the bottom area, and it has picked up recently. At present, we see that the prices and valuations of many industries and individual stocks that represent the direction of future economic development have been lower than in the past, and the fact that they themselves are the driving force of the medium- and long-term development of the economy has not changed, we are still firmly optimistic about the transformation of the country's economic structure, and the resulting investment opportunities, and believe that the source of investment income is fundamentally derived from value creation, so such allocation opportunities are very rare for us. Whether it is the current investment or our macroeconomic and social problems, we must strategically ignore the current difficulties, be cautious and cautious in tactics, and face them with a down-to-earth and realistic attitude, believing that in this way we will be able to go further and more steadily.
Fan Jingwei
Fund Manager of Stable Income Investment Department of Penghua Fund
In the first half of the year, mutual funds performed better than the broad-based index and better than the median change, largely because the earnings quality factor was very effective this year. We believe that this trend force will continue, and it may be easier to bring alpha returns by downplaying the impact of the index and focusing on the earnings sustainability and stability of sectors and individual stocks.
Since July, the economy and geopolitics have become much more complex than in the first half of the year. There is a high probability that the fundamentals will continue to run weakly, and the overall framework has not been shaken by the marginal weakening of the fundamentals. In addition, due to a number of underlying factors, the potential space and strength of fiscal and monetary policies are lower than ideal. Such a combination of fundamentals and policies, coupled with a complex external environment, makes it difficult to see the strength supporting the upward movement of the index. In the first half of the year, only 750 stocks rose in the two cities, accounting for less than 15%, but from the performance of public funds, it was better than the broad-based index and better than the median of the rise and fall. We believe that this trend force will continue, and it may be easier to bring alpha returns by downplaying the impact of the index and focusing on the earnings sustainability and stability of sectors and individual stocks.
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You should fully understand the difference between regular fixed investment and lump sum deposit and withdrawal of funds. Regular investment is a simple and easy investment method to guide investors to make long-term investment and average investment costs, but it cannot avoid the inherent risks of fund investment, cannot guarantee investors to obtain returns, and is not an equivalent financial management method to replace savings. IV. Risk Disclosure of Special Types of Products:1. If the product you purchase is a pension target fund, the name of the product "pension" does not represent income protection or any other form of income commitment, and the product is not principal-protected and may cause losses. Please read the specific risk disclosure carefully to confirm the product features. 2. If the product you purchase is a money market fund, the purchase of a money market fund does not mean that the funds are deposited in a bank or depository financial institution as a deposit, and the fund manager does not guarantee that the fund will be profitable, nor does it guarantee a minimum return. Please read the "Risk Disclosure" section of the fund's prospectus carefully to confirm that you understand the specific risks of money market funds. 3. If the product you purchase is a fund of funds, and the product mainly invests in publicly offered securities investment funds, which has similar risk-return characteristics to the underlying fund, if the product adopts an absolute return strategy and adopts a performance benchmark of absolute return, the performance benchmark of the fund is the return target that the fund strives to achieve, and does not mean that the fund will necessarily achieve the performance benchmark return. Please read the specific risk disclosure carefully to confirm the product features. 4. If the product you purchase is a fund managed by the manager, and the fund manager divides the fund assets into two or more asset units, and entrusts two or more third-party asset management institutions to act as investment advisers to provide investment advice for specific asset units, the investment in the product needs to bear the specific risks brought about by the entrusted investment adviser, such as the risk that the investment adviser does not provide investment advice as agreed, and the risk that the investment adviser no longer meets the employment conditions and needs to be changed. Please read the specific risk disclosure carefully to confirm the product features. 5. If the product you purchase is an index fund and the product passively tracks the underlying index, you need to bear the specific risks of indexed investment, including the risk of deviation between the return of the underlying index and the average return of the stock market, the risk of fluctuation of the underlying index, the risk of deviation between the return of the fund portfolio and the return of the underlying index, and the risk of change in the underlying index. If the index fund you buy is an index-enhanced fund, the fund can implement an index-enhanced investment strategy, that is, optimize and adjust on the basis of passively tracking the index, in order to obtain an investment return that exceeds the index, but there is still some uncertainty in the implementation results of the index enhancement strategy, and its investment return may be higher than the index return but may be lower than the index return. If the product you purchase is an exchange-traded index fund, in addition to the specific risks of the above-mentioned index funds, you may also face the risk of discount and premium of the secondary market trading price of fund shares, the risk of incorrect decision-making and IOPV calculation of fund shares, the risk of fund delisting, the risk of failure of investors' subscription and redemption, the risk of realisation of the redemption consideration of fund shares, and the risk of third-party service providers. Please read the "Risk Disclosure" section of the fund's prospectus carefully to confirm that you understand the specific risks of indexed investments. 6. If the products you purchase invest in overseas securities, in addition to the general investment risks such as market fluctuation risks similar to those of domestic securities investment funds, the funds are also subject to special investment risks faced by overseas securities market investments, such as exchange rate risks. If you purchase a product that invests in stocks in the Hong Kong market through the Mainland-Hong Kong Stock Connect ("Southbound Stock Connect Mechanism"), you will also face the unique risks brought about by the differences in the investment environment, investment targets, market systems and trading rules under the Southbound Stock Connect mechanism, including the risk of large stock price fluctuations in the Hong Kong stock market (the Hong Kong stock market implements T+0 rotation trading, and there is no limit on the rise and fall of individual stocks, which may exacerbate stock price fluctuations), and the risk that may be brought about by the inconsistency of trading days under the Hong Kong Stock Connect mechanism (when the mainland market opens and Hong Kong is closed, Hong Kong stocks cannot be traded normally, and Hong Kong stocks cannot be sold in time, which may bring certain liquidity risks). Please read the "Risk Disclosure" section of the fund's prospectus carefully to confirm that you understand the specific risks associated with investing in overseas securities markets. 7. If the product you purchased operates in a regular open mode, or after a period of closed operation, it becomes an open-ended operation, or the fund contract stipulates a minimum holding period for fund shares, and it is not listed for trading during the closed period or minimum holding period, you will face liquidity constraints due to the inability to redeem, convert or sell fund shares during the closed period or minimum holding period. Please read the "Subscription and Redemption of Fund Shares" and "Risk Disclosure" sections of the prospectus carefully to confirm that you understand the liquidity constraints caused by the operation of the fund. 8. If the product you purchased has an automatic termination clause in the fund contract, if the number of fund unit holders is less than 200 or the net asset value of the fund is less than RMB 50 million for several consecutive working days, the fund manager shall terminate the fund contract without holding a large meeting of fund unit holders, and you may face the risk of automatic termination of the fund contract after you purchase the fund. Please read the "Risk Disclosure" section of the prospectus carefully to confirm that you understand the specific risks associated with the automatic termination of the fund contract. 9. If the product you purchased stipulates the terms of suspension of the operation of the fund, that is, when the fund contract is agreed, the fund manager may decide to suspend the operation of the fund, and during the suspension of the operation of the fund, the fund manager and the fund custodian may decide to terminate the fund contract after consultation between the fund manager and the fund custodian, and report to the China Securities Regulatory Commission for filing and announcement, without the need to convene a general meeting of fund unit holders. After you purchase the fund, you may face the risk that the operation of the fund will be suspended until the termination of the fund contract. Please read the "Effectiveness of the Fund Contract" and "Risk Disclosure" sections of the prospectus carefully to confirm that you understand the specific risks of the suspension of the operation of the fund. 10. If the product you purchased is an initiator fund, if the net asset value of the fund is less than RMB200 million on the three-year corresponding date of the effective date of the fund contract, the fund contract will be automatically terminated, so you may face the risk of automatic termination of the fund contract after you purchase the fund. Initiator fund refers to the fund manager using the company's shareholders' funds, the company's inherent funds, the company's senior management personnel or fund managers' funds to subscribe for the fund in an amount of not less than RMB 10 million, and the holding period is not less than three years. Please carefully read the "Effectiveness of Fund Contract" and "Risk Disclosure" sections of the prospectus to confirm that you understand the specific risks of automatic termination of the fund contract. 5. The fund manager undertakes to manage and use the fund assets in good faith, diligence and responsibility, but does not guarantee that the fund will be profitable, nor does it guarantee the minimum return. Past performance of the Fund and its net worth are not indicative of its future performance, and the performance of other funds managed by the Fund Manager does not constitute a guarantee of the performance of the Fund. The fund manager, Penghua Fund Management Co., Ltd., and the relevant sales agencies of the fund remind you of the principle of "buyer's responsibility" in fund investment, and that after making an investment decision, the investment risks caused by changes in the operation status of the fund and the net value of the fund shall be borne by you. Fund managers, fund custodians, fund distribution agencies and related institutions do not make any promises or guarantees for the investment returns of the fund. 6. The Fund shall be applied for and raised by the fund manager in accordance with relevant laws, regulations and agreements, and shall be licensed and registered by the China Securities Regulatory Commission (hereinafter referred to as the "CSRC"). The Fund's fund contract, fund prospectus and fund product key facts statement have been publicly disclosed through the CSRC's Fund Electronic Disclosure Website (http://eid.csrc.gov.cn/fund) and Fund Manager Website (www.phfund.com). The registration of the Fund by the CSRC does not indicate that it has made a substantive judgment or guarantee on the investment value, market prospects and returns of the Fund, nor does it indicate that there is no risk in investing in the Fund.