Original title: Zhong Geng Value Pilot Increases Southbound Stock Connect Investment Target Star Fund Manager Qiu Dongrong said that a good opportunity for Hong Kong stocks allocation has arrived
Zhong Geng Value Pilot Fund is the first under-valuation strategy product of Zhong Geng Fund.
Due to the overall weakness of the Hong Kong stock market, Hong Kong stock funds have performed poorly this year. Since the Hang Seng Index broke net in August, Hong Kong stocks have also been in continuous adjustment.
However, recent trends also show that many institutions are paying attention to the current investment opportunities in the Hong Kong stock market.
Recently, China Geng Fund issued the “Announcement of China Geng Fund Management Co., Ltd. on Convening the China Gengzhou Value Pilot Hybrid Securities Investment Fund Unit Holders Meeting by Communication”, and decided to hold the fund unit holders meeting by communication for deliberation. Changes in major matters such as investment objectives, investment strategies, investment restrictions, performance comparison benchmarks, and valuation methods.
Among them, in terms of the scope of investment, Zhong Geng Value Leader will increase the allocation of the underlying stocks of the Southbound Trading on the basis of investing in A-shares. Among them, the proportion of investment in the underlying stocks of the Southbound Trading will account for 0-50% of the stock assets.
The fund manager of Zhong Geng’s value leader is Qiu Dongrong. Qiu Dongrong, represented by his “low valuation” strategy, is highly sought after by institutions.
“Since the beginning of this year, Hong Kong stocks have faced significant adjustments. The current valuation and price levels of Hong Kong stocks are at a historically low level. For value investors, this is a very good investment opportunity to allocate Hong Kong stocks.” Qiu Dongrong said.
Clearly optimistic about Hong Kong stocks
According to the reporter of 21st Century Business Herald, Zhong Geng Value Pilot Fund is the first under-valuation strategy product of Zhong Geng Fund.
Zhong Geng Value Leader was established on December 19, 2018. At the end of the first half of this year, its latest scale was 2.303 billion yuan.
Wind data shows that in 2020, China Geng’s value-leading return is 26.67%, ranking the bottom 10% in its class, and its performance is not outstanding. However, as of this year, as of October 8th, China Geng’s value-leading return has reached 35.29%, ranking in the top 95% of its peers.
Although the market is volatile, Qiu Dongrong has repeatedly publicly expressed his insistence on a low valuation strategy.
In this plan to change the fund’s investment scope, Qiu Dongrong also said that the core investment philosophy and strategy method of the low-valuation value investment strategy adhered to by Zhong Geng Value Pilot Fund will remain unchanged regardless of the past or the future. It is hoped that under the low-valuation value investment strategy system, it will be able to continue to find more companies with low valuation, lower risk and sustainable growth for holders in the long-term.
Qiu Dongrong believes that there are three reasons why Hong Kong stocks and A-shares are included in the subject stocks of Southbound Trading. 2. In the long run, there are opportunities to increase the allocation value of cross-market assets through low-value investment and optimize the risk-return characteristics of the investment portfolio; third, there are many differentiated assets in the underlying stocks of Hong Kong Stock Connect, which can be improved The capacity and liquidity of the entire portfolio.
In fact, Qiu Dongrong’s newly issued Zhong Geng Value-Quality One-Year Holding Period Hybrid Fund in January this year has already included the stocks of the Southbound Stock Connect into its investment scope.
At that time, Qiu Dongrong said in an interview, “Although the market has risen sharply for two years, the huge structural divergence within the market creates excellent investment opportunities for low-valuation strategies. The addition of value stocks in the best Hong Kong stocks gives us the opportunity to build a portfolio, which may have lower fundamental risks and lower valuations (single-digit PE) compared to the past two years or even the past five years. ), even higher ROE (around 15%) level and continuous growth.”
In addition to Zhong Geng Value Leadership and Zhong Geng Value Quality Holding for a year, Qiu Dongrong also manages the Zhong Geng Small Cap Value and Zhong Geng Value Smart Allocation of two funds, which are not yet able to invest in Hong Kong stocks.
“Other products will not be considered for the time being to include the scope of investment into the target of the Hong Kong Stock Connect.” A relevant person from the China Geng Fund told the 21st Century Business Herald reporter.
The data shows that as of the end of June this year, the proportion of individual investors and institutional investors who lead the value of China Geng is 49.88% and 50.12% respectively.
“Convening a general meeting of holders to change the scope of investment requires more than 50% of the holders to vote. It is very difficult to hold a general meeting of holders and successfully vote if the proportion of retail investors is large, but it will be much easier if the proportion of institutional investors is high. “A person from a large public equity fund said frankly.
According to the reporter of 21st Century Business Herald, some public funds spent tens of millions to get the votes of the fund holders’ meeting, and some fund companies had to abandon amendments to the relevant clauses because the votes of the holders’ meeting failed to pass.
Institutional preferences are focused
In fact, in addition to Qiu Dongrong, fund managers such as Zhang Kun and Fan Yan also planned to include the subject of Southbound Stock Connect in the investment scope of their managed funds. Recently, many institutions have also expressed concern about investment opportunities in the Hong Kong stock market.
However, the allocation of fund managers has its own focus.
Qiu Dongrong said that he is more optimistic about the value stocks in Hong Kong stocks among the stocks under the Southbound Stock Connect.
“The value stocks of Hong Kong stocks have the characteristics of less fundamental risk. They are basically leading enterprises or central enterprises. These assets are of very high quality and low risk. For example, leading companies in telecommunications, real estate, banks, insurance, energy, and coal. , Are the best and strongest forces in the Chinese economy. With the easing of the epidemic and the recovery of fundamentals, these assets are showing relatively low-risk characteristics.” Qiu Dongrong believes.
It said that the corresponding value stocks of these companies in A shares are already very cheap, but they are cheaper in Hong Kong stocks, and the corresponding dividend yield has maintained a very high level. Moreover, the risk release in the transaction is relatively sufficient, the overseas funds and the southward funds pay less attention to such companies, and the transactions are not crowded.
Li Yaozhu, head of the International Business Department of GF Fund, is more optimistic about high-quality growth stocks in Hong Kong stocks.
“After adjustments over this period of time, most of the downward momentum of Hong Kong stocks has been effectively released. At the same time, this has also brought the valuation of Hong Kong stocks to historical lows. With the gradual implementation of some industry-related policies recently, the market has not The certainty is further eliminated, and it is expected that the Hong Kong stock market will also show signs of bottoming and stabilization. This is an important bullish factor for the Hong Kong stock market.” Li Yaozhu said.
“The listing of high-quality Chinese technology companies in Hong Kong stocks has also brought a positive impact on the Hong Kong market. These companies have strong evolutionary capabilities and are expected to expand more room for growth in the future. Therefore, I personally think that the current allocation of high-quality growth stocks in Hong Kong stocks Window opportunity.” Li Yaozhu told the 21st Century Business Herald reporter.
The Macro Strategy Department of Boshi Fund pointed out that the most severe and abrupt moment of current policy supervision has basically passed, but the bottom of the policy has not yet appeared. Hang Seng Technology‘s earnings forecast has not yet improved, the valuation is cost-effective, the capital has recovered, and the long-term layout value is prominent.
(Author: Jiang Shiqiang Editor: Zhu Yimin)
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