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The second quarter reports of public funds have been disclosed one after another, and the portfolio adjustments of well-known fund managers have also been exposed.

Even in a volatile market, most active equity fund products still maintain a relatively high equity asset allocation ratio. Yicai.com sorted out the quarterly reports and found that some products that achieved great results last year have seen a turnaround in performance this year, while some have achieved sustained growth in performance by adjusting their positions in a timely manner.

At the same time, the semi-annual performance forecasts of A-share listed companies continue to be unveiled. Among the stocks with outstanding performance, most are from industries such as electronics, mechanical equipment, and automobiles. Some of the high-performing companies among these companies have already been "lurking" in advance by institutional investors.

At this point in time, some fund managers are optimistic and believe that the A-share market is still expected to rebound after the bottoming out. For example, Zhang Kun, a star fund manager, said that he does not agree with the market's pessimistic expectations, "The most important thing at this moment is patience, and the long-term return expectations of high-quality companies are very impressive."

How to adjust positions to maintain performance

Since the beginning of this year, the A-share market has continued to fluctuate after a "V"-shaped reversal, and the performance trends of the products that led the gains last year have also diverged. Wind data shows that as of July 17, among the top 20 active equity fund products (including ordinary stock funds, equity-oriented hybrid funds, balanced hybrid funds, and flexible allocation funds, only counting initial funds, the same below) that ranked in performance last year, only two products had positive returns this year, and the remaining 18 products fell between 4% and 37%.

Soochow Mobile Internet A and Soochow New Trend Value Line, managed by fund manager Liu Yuanhai, have continued their good performance, with cumulative returns of 27.62% and 27.18% respectively so far this year; the two ranked third and fourth last year with annual returns of 44.93% and 41.99% respectively.

As public funds enter the intensive disclosure period of the second quarter reports, the adjustment ideas of these two products have also surfaced. Taking Dongwu Mobile Internet A as an example, in the first quarter of this year, the allocation ideas of the fund were roughly the same as at the end of last year, and the holding strength increased, mainly in the three major directions of AI computing power and applications, electronic semiconductors, and automotive intelligence.

In the second quarter, Soochow Mobile Internet A increased its allocation to electronic semiconductors related to AI, and replaced four of the top ten holdings. Among them, Desay SV and Kingsoft Office in the computer sector, Tianfu Communication in the communication sector, and Top Group in the automobile sector were eliminated, and replaced by stocks in the electronic sector such as GigaDevice, Goertek, Pengding Holdings, and Foxconn Industrial Internet.

Liu Yuanhai also increased his holdings in the individual stocks he continued to hold, such as significantly increasing his holdings of Luxshare Precision, the A-share leader in the Apple supply chain, by 40.77%, making the stock his largest holding. In addition, he also significantly increased his holdings in Weilan Technology, Zhongji Xuchuan, Shanghai Electric Co., Ltd. and Crystal Optech, with the increases in the second quarter all exceeding 47%, and the increase in Zhongji Xuchuan even reaching 76%.

Currently, among the top ten holdings of Dongwu Mobile Internet A, there are 8 stocks in the electronics sector, and 2 stocks in the communications sector, such as Zhongji Xuchuan and Xinyi Sheng. Since June, A-share electronic semiconductors and AI computing power in the second quarter have performed relatively well, which is also an important reason for the fund to achieve an interval return of 11.41%.

Liu Yuanhai also explained the reason for the adjustment in the quarterly report: "In the first quarter report, the share prices of A-share electronic semiconductor companies fell sharply, and the share prices are at a relatively low level in history. We believe that A-share electronic semiconductors may be at a triple bottom: earnings bottom, valuation bottom and position bottom, and medium- and long-term investment opportunities in electronic semiconductors may be coming."

From the perspective of positions, Dongwu Mobile Internet A increased its aggressiveness in the second quarter, with its equity position increasing by 0.48% to 93.72%. The reporter noticed that there were quite a few products that maintained high positions in the second quarter. As of July 18, among the 1,887 active equity fund products with data, about 40% of the fund products had stock positions of more than 90%, and more than 30% of the products had positions between 80% and 90%, accounting for more than 75% in total.

First layout of blue chip stocks

At the same time, the semi-annual performance forecasts of A-share listed companies have also been disclosed one after another, and some high-performing companies have received early layout by public offerings. Wind data shows that as of July 18, more than 1,600 listed companies have disclosed performance forecasts. After excluding loss-making companies, about 697 companies have predicted year-on-year growth in net profit, accounting for 43.43%.

Among the 323 listed companies whose net profit margins exceeded RMB 100 million, the electronics industry had the largest number of companies, 54, based on the Shenwan first-level industry, while the number of companies in the machinery and equipment, automobile, basic chemical, pharmaceutical and biological, nonferrous metals and public utilities sectors exceeded 20. These are also the industries favored by institutional investors.

On the other hand, among them, 47 listed companies such as Zijin Mining, Aluminum Corporation of China, Weichai Power, and Luxshare Precision predicted that the lower limit of net profit would be more than 1 billion yuan. Based on the products that have disclosed the second quarter reports of funds, 46 listed companies have been arranged in advance by public funds and have entered the top ten holdings of the products.

For example, Zijin Mining is currently heavily held by 421 funds under at least 40 fund companies, with a total market value of 21.44 billion yuan, including products managed by well-known fund managers. Currently, 162 funds have set it as the top three heavily held stocks, with the largest holdings being broad-based ETF products such as Huaxia SSE 50 ETF, E Fund CSI 300 ETF, and Harvest CSI 300 ETF.

According to statistics from China Business News, among the aforementioned 46 public offerings, 12 stocks are currently held by more than 100 fund products. In addition to Zijin Mining, Luxshare Precision, Zhongji Xuchuan, and North Huachuang are also held by public offerings with a market value of more than 10 billion yuan.

From the perspective of the secondary market, Wind data shows that as of July 18, more than 90% of the above stocks have achieved year-to-date gains, with Yutong Bus, which has the highest increase, rising 84.78% year-to-date. The second quarter report shows that 97 fund products currently hold heavy positions, among which Caitong Value Momentum A has included it in the heavy holdings for the first time, holding 5.6646 million shares.

How do you view future market opportunities?

As the year progresses, fund managers have also elaborated on their views on the market outlook in the latest quarterly reports. In many fund quarterly reports, fund managers are mostly optimistic about the overall market outlook, but there are still some differences in their views on future opportunities.

Star fund manager Zhang Kun once again expressed confidence in the quarterly report. In his view, judging from the valuation of government bonds and domestic demand-related stocks, the market's pessimistic expectations may be based on concerns about stagnation, "We strongly disagree with this pessimistic expectation."

Zhang Kun believes that considering the proportion of household consumption in the economy, economic development has brought about a better standard of living for the people, and the investment opportunities that have been brought about are still one of the most promising gold mines in the stock market in the long run. Due to pessimistic expectations in the current market, some high-quality companies have been traded at valuations (price-earnings ratio, market value/free cash flow) levels that can be clearly accounted for even if they are privatized.

"The most important thing at this moment is patience. The long-term return expectations of high-quality companies are very considerable." In his view, stock investors have unique advantages and an important source of higher returns. The continuous development of the economy is the soil for the long-term growth of enterprises. In this regard, the domestic economy is still fertile ground.

Feng Hanjie, manager of GF Theme Leading Fund, analyzed that although the mainstream index of the A-share market performed stably in the second quarter, the market still showed certain fragile characteristics, mainly manifested in frequent rotation and lack of money-making effect. The reason is that the combination of fundamentals and valuations cannot give relatively clear directional guidance.

In summary, Feng Hanjie believes that the fundamental trend is still unclear. Combined with the overall market, the market median is still at a neutral valuation level, so he tends to remain patient with the A-share market as a whole.

He also mentioned that the large fluctuations in a certain type of asset perceived by investors in the short term are not necessarily related to long-term performance. The long-term returns of excellent low-valuation assets and excellent growth assets are actually comparable, and the latter may even be better. However, the risk-return characteristics of the two are indeed significantly different, and they are suitable for different types of investors.

At the current point in time, Wu Yijing, manager of CITIC Prudential Deep Value Fund, believes that the domestic economy is in the process of structural transformation and is expected to show a bottoming out throughout the year. The market's attention to the quality of corporate profits is increasing, and listed companies with stable profits, abundant cash flow and good dividend levels may still be favored by the market.

Based on this, she said that in terms of operations, on the one hand, the pricing of individual stocks within dividend assets should be done well, focusing on some varieties with higher absolute returns; on the other hand, in the subdivided industries, look for some industries where supply and demand are gradually approaching inflection points, to provide support for the stability of future profitability.