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Blue Whale News July 17 (Reporter Ao Yulian)Is there a risk of dividends being grouped together? Since the beginning of the year, this topic has been raised frequently, and there have been frequent disagreements. Fu Pengbo and Zhao Feng of Ruiyuan Fund gave their personal opinions in the second quarter report: there is a trend of grouping together.

On July 17, Ruiyuan Fund disclosed the second quarter report of the products managed by Fu Pengbo and Zhao Feng: the interval returns were positive and outperformed the benchmark, but all shares showed net redemption.

In terms of stock adjustment, Fu Pengbo's Ruiyuan Growth Value and Zhao Feng's Ruiyuan Balanced Value both slightly reduced their stock positions by about 2%, while increasing their Hong Kong stock positions. In terms of specific sectors, both believe that the current dividend and banking sectors are crowded and group-holding risks. Zhao Feng believes that in the long run, blue chip leading stocks may have better investment opportunities.

Fu Pengbo: Adding to Hong Kong stocks, warning of the risk of dividend grouping

In the second quarter, the net value of Ruiyuan Growth Value managed by Fu Pengbo rose by 1.66%, outperforming the benchmark of 0.00%. During the same period, the number of shares redeemed slightly, from 17.341 billion to 16.944 billion.

In terms of asset allocation, the stock position of Ruiyuan Growth Value fell slightly by 2.42% in the second quarter, and the stock position was 87.83% at the end of the quarter. However, the Hong Kong stock position increased from 20.11% to 23.63%. Fu Pengbo mentioned in the second quarter report that the stock asset allocation of Ruiyuan Growth Value was slightly reduced in stages, but the position was still not low, and the overall contribution of Hong Kong stock holdings was relatively obvious.

In terms of specific stock adjustments, the top four holdings of Ruiyuan Growth Value remained unchanged, the same as in the first quarter: China Mobile, CATL, Luxshare Precision, and Tencent Holdings. Except for CATL, which increased its holdings by 0.15%, the other three stocks all saw a slight reduction in holdings, with little overall change.

Two new stocks entered the top ten: Giant Star Technology (the seventh largest holding, accounting for 4.45% of net value) and Hyjia Medical (the tenth largest holding, accounting for 1.96% of net value). Oriental Yuhong and Tongwei Co., Ltd. dropped out of the top ten.

Fu Pengbo said that he increased holdings of mechanical equipment, power equipment and energy industry stocks, reduced holdings of telecom operators but the change was limited, and the holdings of other key companies remained almost unchanged. However, there were relatively more changes in holdings after the top ten holdings, and companies with fundamental pressure and mismatched valuation and growth were reduced.

Fu Pengbo also expressed his personal opinion on the hot dividends. He believes that in the second quarter, credit data was weaker than expected and long-term government bond yields continued to decline, and market funds tended to allocate "safe" assets with high dividend yields and good liquidity. In the past three years, funds have been crowded in the food and new energy sectors, and the risk-return ratio has continued to decline. Recently, similar phenomena have occurred in the dividend and banking sectors.

Zhao Feng: Newly entered China Pacific Insurance, blue-chip leading stocks with higher dividends have more long-term opportunities

Zhao Feng, another ace of Ruiyuan, manages Ruiyuan Balanced Value, which also saw an increase in net value and a decrease in share.

In the second quarter, the net value of Ruiyuan Balanced Value managed by Zhao Feng increased by 4.12%, outperforming the benchmark by 0.69%. During the same period, the number of shares redeemed slightly, from 10.324 billion to 9.986 billion.

In terms of asset allocation, Ruiyuan Balanced Value's stock position in the second quarter was 87.21%, a slight decrease from 89.85% at the end of the first quarter. At the same time, the Hong Kong stock position was increased from 39.39% to 43.48%.

In terms of stock adjustments, China Pacific Insurance entered the top ten (the seventh largest holding, accounting for 3.20% of the net value). Apart from this, there were not many stock increases, with the increase being within 2.1%. The reduction in holdings was much more drastic, with China Resources Beer withdrawing from the top ten, Siyuan Electric cutting its holdings by nearly half, with a 49.28% drop in holdings, and Meituan-W also reducing its holdings by 20.93%.

Zhao Feng concluded, "In the second quarter, we continued to adjust our holdings structure, reducing holdings of targets with slowing growth, high valuations, and weak free cash flow, and also reducing holdings of resource companies with high market expectations and large stock price increases, and increasing holdings of targets with low valuations, excellent free cash flow, and stable business prospects."

Regarding the popular high dividend stocks, Zhao Feng also expressed his personal sober thinking: there is some trend of dividends forming a group, and the leading blue-chip stocks have a better implied long-term return rate.

"As stock prices rise, the implied returns of large state-owned banks, energy companies such as electricity, coal, and oil, and telecom operators continue to decline. Investors seem to care less about the business models of related companies and the stability of their profits, and pay great attention to short-term cash returns." Zhao Feng believes that if the company's profit quality and long-term space are combined, the current pursuit of high-dividend companies seems to have some trend implications, rather than being entirely based on value.

Zhao Feng believes that at this point in time, better investment opportunities may be in leading blue-chip stocks. He wrote in the second quarter report that the dividend yields of some leading blue-chip companies in some industries are close to or even higher than the risk-free rate. These companies have growth potential and excellent business models, and the implied long-term return level may be significantly higher than some high-dividend companies currently sought after by the market.

"Due to concerns about the uncertainty of the future, the market is currently extremely averse to risk and growth. But in the long run, companies that are truly globally competitive are very likely to be able to cope with the challenges of the future operating environment, navigate cycles and continue to create value," said Zhao Feng.