On March 30, the 4 funds managed by Zhang Kun, a fund manager of “100 Billion Top Stream”, released the 2021 quarterly reports. The “invisible heavy-weight stocks” and the complete adjustment path in their holdings surfaced. At the same time, the fund’s holdings The turnover rate, the position data of professionals such as institutions, managers and employees, and the outlook for the market outlook are also released.
Zhang Kun currently has a fund management scale of 101.9 billion yuan, and has 4 funds under management, including E Fund Blue Chip Select, E Fund Premium Select, E Fund Asia Select, and E Fund Premium Enterprise for three years.
Its representative fund is E Fund Blue Chip Selection, which is the largest fund with a scale of 67.623 billion yuan at the end of last year.
As of the end of 2021, the fund’s stock position was 94.23%, holding a total of 84 stocks. Among them, the top ten heavyweight stocks accounted for 88.2% of the fund’s net value, and the holdings were very concentrated.
From the data point of view, Zhang Kun’s position turnover rate is lower than that of his peers, and it is only 102% in 2021 (it is generally considered that below 200% is low). One share – Meituan was replaced by Yili shares.
Due to Zhang Kun’s low turnover rate, his “invisible heavy-weight stocks” and the direction of position adjustment at the end of 2021 still have certain reference significance for investors.
At the end of 2021, the top 10 stocks of E Fund’s blue-chip selection are Tencent Holdings, Hikvision, Luzhou Laojiao, Kweichow Moutai, China Merchants Bank, Wuliangye, Yanghe Co., Ltd., Hong Kong Exchange, Yili Co., Ltd., and Ping An Bank.
In addition to the above 10 heavyweight stocks, there are 13 “invisible heavyweight stocks” selected by E Fund blue-chip, including Meituan, Bubble Mart, Focus Media, Oriental Fortune, Pien Tze Huang, Aier Ophthalmology, Shanxi Fenjiu, Tiantan Bio, Tongtong Strategy Medical, Mindray Medical, Dongpeng Beverage, Mengniu Dairy, Jinxin Reproductive. They account for 6.35% of the fund’s NAV.
Compared with June 30, 2021, among the above-mentioned 23 heavy-holding stocks selected by E Fund blue-chip, a total of 10 were newly entered and increased, mainly focusing on the new economy, food and beverage, and finance of Hong Kong stocks.
in,The 5 newly entered stocks are Yili, Bubble Mart, Focus Media, Oriental Fortune, and Mengnian Dairy;The 5 stocks that have been increased are Tencent Holdings, Hikvision, China Merchants Bank (Hong Kong stock), Ping An Bank, and Dongpeng Beverage;At the same time, 11 stocks were reduced, and the main ones to lighten up were pharmaceutical biology, liquor, and some Hong Kong stocks.
It is worth mentioning that the data at the end of 2021 shows that in the second half of the year, Zhang Kun almost reduced his holdings in some pharmaceutical stocks. Among them, Aier Ophthalmology, Tiantan Bio, Tongce Medical, and Jinxin Bio have decreased by nine compared to the middle of the year. above. However, the positions of Pien Tze Huang and Mindray Medical remain unchanged, and they are ranked 15th and 20th respectively.
According to public information, Zhang Kun has a postgraduate degree from Tsinghua University, majoring in bioengineering medicine, and medical biology is one of Zhang Kun’s important configuration directions in the past.
Zhang Kun’s other funds’ “stealth stocks” and investment ideas are generally similar to E Fund’s blue-chip selection.
The “invisible heavy-holding stocks” (the top 11-20 heavy-holding stocks) held by E Fund high-quality enterprises for three years are: Meituan, Bubble Mart, Focus Media, Oriental Fortune, Mengniu Dairy, Aier Eye, Times Electric, Tongce Medical, Jinxin Reproductive, Honghua Digital.
Among the two international (QDII) stock funds managed by Zhang Kun, E Fund’s high-quality selection of “hidden stocks” (the top 11-20 stocks with heavy holdings) are: Alibaba, Meituan, NetEase, Bubble Mart, Mengniu Dairy, Yum China, Shanxi Fenjiu, Dongpeng Beverage, Tiantan Bio, and Three Trees.
E Fund Asia’s selected “stealth stocks” (top 11-20 stocks) are: NetEase, Bubble Mart, CNOOC, China Property & Casualty Insurance, Pinduoduo, Yum China, China Shenhua, Jinxin Fertility, Yong He Medical, Sound International, China Animal Health Products.
Year-round adjustment path
Looking back at Zhang Kun’s full-year adjustment path in 2021, we can see his investment ideas for different market styles at various stages.
The following still takes Zhang Kun’s representative fund, E Fund Blue Chip Selection, as an example.
In the first quarter of 2021, A shares rose sharply before the Spring Festival, but there was a major adjustment after the Spring Festival. In the first quarter, A shares were weak and Hong Kong stocks were strong. In the first quarter, the stock market was more differentiated, with steel, public utilities, banking, leisure services and other industries performing better, while defense and military industry, non-bank finance, communications and other industries performed relatively backward.
At this time, Zhang Kun reduced the configuration of industries such as food and beverage, and increased the configuration of industries such as banks.
In the second quarter of 2021, the A-share market fluctuated and rose, the Shanghai Composite Index rose 4.34%, and the ChiNext Index rose sharply by 26.05%. Market differentiation in the second quarter, among which new energy, automobile, electronics, medicine and other industries performed better.
Zhang Kun’s stock position decreased slightly in the second quarter, reducing the allocation of industries such as computers and increasing the allocation of industries such as electronics.
In the third quarter of 2021, the A-share market fluctuated and fell, the Shanghai Composite Index fell by 0.64%, and the ChiNext Index fell by 6.69%. Hong Kong stocks fell even more, with the Hang Seng Index down 14.75%. In the third quarter, commodity prices rose significantly. Coal, non-ferrous metals, steel, electricity and other industries performed better, while textile and apparel, home appliances, food and beverage, medicine, consumer services and other industries performed relatively backward.
Zhang Kun slightly increased his stock position in the third quarter, and adjusted the structure, increasing the allocation of food and beverage, banking and other industries, and reducing the allocation of medicine, Internet and other industries.
In the fourth quarter of 2021, the A-share market fluctuated and rose, with the Shanghai Composite Index up 2.01% and the ChiNext Index up 2.40%. Hong Kong stocks were weaker, with the Hang Seng Index down 4.79%. In the fourth quarter, the differentiation was obvious. The media, defense and military industry, communications, light manufacturing, electronics and other industries performed better, while the performance of coal, steel, petroleum and petrochemical industries was relatively backward.
Zhang Kun slightly increased his stock position in the fourth quarter, and adjusted the structure, increasing the allocation of industries such as technology, and reducing the allocation of industries such as finance and medicine.
For the whole year, E Fund’s blue-chip selection yield was -9.89%, a relatively large decline, and did not outperform the benchmark yield of -7.05% over the same period.
On the whole, the stock position of E Fund Blue Chip Select Fund is basically stable in 2021. Zhang Kun adjusted the structure according to the market ups and downs. In terms of industries, the allocation of industries such as finance and consumption has been increased, and the allocation of industries such as medicine has been reduced.
In terms of individual stocks, Zhang Kun said that the investment ratio of individual stocks with distinctive business models, clear long-term logic, and reasonable valuation levels has been increased.
It is worth mentioning that as of March 30, since 2022, the net worth of E Fund Blue Chip Select has dropped by 17.37% again. It may be expected that Zhang Kun has made a certain reduction or adjustment this year.
On March 30, the net worth of E Fund Blue Chip Selection was estimated to be 2.1475, with an estimated net worth rising by 3.48%; the actual unit net worth was 2.1340, up 2.83%. There is a certain deviation between the two, about 0.65%.
It is worth mentioning that in 2021, institutional investors of E Fund Blue Chip Selection will hold 700 million shares, accounting for 2.78%, which is less than 5.5 billion shares in 2020. However, the share held by individual investors has increased.
Look for quality companies that generate “free cash flow”
For the market outlook, Zhang Kun once again mentioned paying attention to “free cash flow” in the 2021 annual report – “the value of an enterprise is the discount of all free cash flow in its life cycle”.
Zhang Kun said that when researching companies, free cash flow is always one of the financial metrics he pays most attention to.
He believes that although there will be fluctuations between years, it is not difficult to distinguish whether a company can generate sufficient free cash flow for shareholders if it is extended to the dimension of 5-10 years.
“Further, from the bottom, how much a company’s products are desired by its customers, whether it has an excellent business model, and whether it has a moat to maintain a good competitive landscape in a long period of time, these are all factors that enable the smooth conversion of revenue. It is an important determinant of net profit and then converted into free cash flow.” Zhang Kun said.
Regarding the market outlook, Zhang Kun said that we will strive to find some high-quality listed companies that can generate sufficient free cash flow, and the free cash flow generated can grow over time.
Zhang Kun’s views in the annual report have been repeatedly mentioned in various periodic reports in 2021. For example, Zhang Kun’s long-term investment and value investment are just different statements.
For example, in the first quarterly report of 2021, Zhang Kun said that it is almost impossible to judge the top and bottom of the cycle, but it is relatively feasible to constantly check whether the long-term ability of the companies in the portfolio to generate free cash flow has been damaged. No, as long as the intrinsic value can steadily increase, it will be a matter of time before the stock price operation center will improve.
In the 2021 mid-year report, Zhang Kun said that he often looks at the portfolio in this way, “If the stock market is closed for 3-5 years, will I still have the confidence to buy the shares of this company.”
In the third quarterly report, Zhang Kun said that a company’s business model, moat and industry prospects jointly determine a company’s pricing power, and pricing power is one of the most lasting determinants of high returns on investment.
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