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Since 2024, the overseas market has continued to ferment. Under the expectation of loose liquidity, QDII funds have attracted the attention of many investors. What is the investment potential of overseas markets? How can ordinary investors achieve diversified global asset allocation?

This issue of "Investment Hotspots" invites Qu Shaojie, assistant general manager of the international business department of Great Wall Fund and fund manager, to talk about US stock allocation strategies.

(Click on the picture to view the live broadcast)

Interview Quotes

Qu Shaojie: If this round of interest rate cuts begins, it will boost overall consumption and investment, and the resilience of US economic growth may be further enhanced.There is a high probability that a "soft landing" will occur.

Qu Shaojie: In the long run, US technology stocks have the momentum to continue to rise, and this momentum will last for a long time. We believe that the development of artificial intelligence is a long-term process.

Qu Shaojie: The output value of the automobile industry has become an important pillar industry in China. Its industrial scale is particularly large, and its products will undergo epoch-making subversive updates. Therefore, the investment opportunities it generates are also very good.

Qu Shaojie: When investing overseas, we should stick to the perspective of institutional investors. From the perspective of institutions, we value the potential for performance growth of listed companies more.

Transcript

Host: Talk to investment experts and grasp the market pulse. Welcome to the high-end interview program Dialogue created exclusively by China Fund News. I am the host Wen Jin. He is the romantic science and engineering man behind 1024. He is the Shanghai son-in-law who jokes that he dares not go to his mother-in-law's house for dinner because of the decline. Some people jokingly call him a quantitative magician, while others think he is a powerful index enhancement expert. Today, we will get to know Sheng Fengyan, the quantitative investment director of Western Profit, and open the quantitative black box to talk to him about quantitative investment. Mr. Sheng,

Moderator: Mr. Qu, when talking about the mutual fund industry this year, there is a very eye-catching topic, which isPerformance of QDII funds. Since the beginning of this year, QDII funds have performed very well overall. In terms of scale, the recently disclosed second quarter report of public funds also shows that the total scale of QDII funds has approached 500 billion yuan, and more than 60% of the products in the market are subject to purchase restrictions, which shows the popularity of this type of fund. As one of the QDII fund managers, how do you view the performance of this type of product in the first half of the year?

Qu Shaojie:Overall, the performance of QDII funds in the first half of the year was very impressive, and investors achieved good returns. There are many categories of QDII funds with a scale of 500 billion yuan. For example, from the country level, there are markets such as India, Vietnam, and the United States; in addition, there are passive and active QDII products. In the first half of the year, the returns of gold-themed, resource-themed, US Nasdaq passive index, and US technology active management funds were very obvious.

However, QDII funds have a characteristic, that is, they need to have an overseas investment quota, and each fund company has a different QDII quota for overseas investment. At present, most QDII funds on the market are in a state of limiting subscription or limiting large-scale subscription. If investors are interested in QDII products and want to invest, they should also check their subscription and redemption status.

Host: Thank you Mr. Qu for your answer.QDII products are mainly invested in overseas markets, so the performance of overseas underlying markets is behind its brilliant performance. So could you please briefly review the overall performance of the global macro-economy and capital markets in the first half of this year?

Qu Shaojie:The global macro market is a relatively large topic, which is divided into Europe and the United States, Japan and South Korea, developed markets, etc., and there is also differentiation among these markets.

The United States has relatively strong economic fundamentals. The United States is still in a high interest rate environment, and high interest rates mean that its economy is slightly overheated. Its employment is very full, and the inflation level is relatively high. Entering 2024, the inflation level in the United States, especially the core CPI, has declined, giving the Federal Reserve some room to cut interest rates, which is a good thing for the US economy and the global economy. Europe has also maintained good economic resilience, with relatively good wage levels, unemployment rates and consumption levels.

Host: BecauseThe main allocation market for QDII products is the U.S. stock market. The U.S. stock market performed well in the first half of this year. What are the main reasons behind this?

Qu Shaojie:In the first half of the year, the S&P and Nasdaq indices performed relatively well in the United States. The main reason was that the seven major technology giants in the U.S. stock market had a very significant increase, especially one of the chip giants, which even became the world's largest market value. Because artificial intelligence and big models are developing rapidly, chip companies have benefited particularly.

In general, about 70% of the increase in the US index was driven by US technology stocks. US technology is entering a process that can improve the productivity of the entire society, which is very beneficial to US technology companies and has been reflected in relatively bright performance. Although these large technology companies and cloud vendors have relatively large capital expenditures, their performance has continued to exceed market expectations, so their stocks have performed relatively well.

In addition, the US macro-economy is in a relatively high interest rate environment.The CPI level will be overheated in 2023 and will cool down in 2024, but it can be reflected that the stickiness of consumption is very good, and the wealth in the hands of residents will also produce a relatively good wealth effect with the rise of the stock market.At the same time, the US housing market is rising, the hourly wages of US workers are also rising, and the unemployment rate is relatively low. Therefore, from the perspectives of consumption, employment, investment, and technological development, the US may be in a good upward channel.

Host: You have been investing in overseas markets and U.S. stocks for more than a decade, and have witnessed the long bull run of U.S. stocks. Compared with previous waves of technology, are there any changes in the catalysts, duration, and overall rhythm of this wave of technology?

Qu Shaojie:These technology stocks in the US stock market have led the entire US technology industry into an innovative environment of artificial intelligence revolution or reform. In fact, there are some doubts in the market about this round of artificial intelligence development, such as whether the development of artificial intelligence in the United States, especially large models, and the investment of technology companies can continue? Is there a very bright artificial intelligence application that everyone likes? Can artificial intelligence be truly applied in our lives and production?

I think this round of AI revolution has spread from the United States to the world. China's AI development is also very rapid. Many large-scale model R&D companies have also emerged in Europe, but the main source and development battlefield is mainly in the United States. Looking forward, I think the depth and breadth of AI development this time is expected to exceed everyone's expectations.

The AI ​​big model now has Wenshengwen, which means you give it a paragraph of text and it can write a novel for you; Wenshengtu, which means you give it a description and it will draw a very high-definition poster or picture; Wenshengvideo, which means you tell it the general plot of a story and it will generate a video. At the same time, it can also have good applications in intelligent driving and real physical life scenes, such as robots and intelligent driving cars. I believe its breadth will continue to expand, such as in more fields such as medicine.

In terms of depth, if we judge AI at the level of the industrial revolution, it may take decades for AI to develop. This round of AI has only been developed for two or three years and is still in a very early stage. In this process, large models are developing, but popular applications have not yet been fully launched. This is in line with the law of development of things. It is impossible to have a good popular application immediately after making a large model.

The development of artificial intelligence may have a huge impact on our future lives. Just like we were not particularly used to smartphones 20 years ago, but now we are very used to the convenience that smartphones bring to our lives. Many years later, we can also expect artificial intelligence to have a very large application in our lives.

Smartphones have laid a very good foundation, and technology companies are more aggressive in developing large model programs than they were 20 years ago. Now we see that these technology companies and cloud vendors are engaged in an "arms race" for the evolution of large AI models, and this process may be faster than expected. From my point of view, I think the development of things should be a gradual process, and of course it may exceed my judgment and expectations.

Host: Thank you Mr. Qu for your summary.AI, high interest rates, and rising hourly wages are quietly changing and reshaping the global capital market. At present, everyone is paying close attention to the Fed's interest rate cuts, especially as some traders have high expectations for a rate cut in September. What do you think the rising expectations for a rate cut will have on global investment?

Qu Shaojie:The United States has been suffering from a high interest rate environment for a long time, but has never found an opportunity to cut interest rates. Now the market's expectations for a rate cut in September continue to rise. If the United States enters a new round of rate cuts, it will have a relatively large impact on the global economy.

The first thing that will be affected is the US bond market. After the Federal Reserve rate is lowered, the interest rate level of US Treasury bonds, especially long-term Treasury bonds, will fall, and the attractiveness of Treasury bonds and bond assets will decline. Some funds may be withdrawn from the US bond market and invested in the equity market, some may be transferred to growth stocks, and some may look for high-dividend assets. This is the impact of the interest rate cut on the equity market.

In addition, the downward trend in interest rates will lead to an increase in valuations. The denominator of stock valuations is actually the interest rate. The lower the interest rate, the higher the stock valuation may be, and the corporate financing interest rate level will also be lower, making it cheaper to borrow money.Since the market started trading on the expectation of rate cuts, US biotech companies have performed well, and in fact, technology companies should also benefit from the increase in valuations. However, the growth of technology companies in the past two years has been relatively high, and it is trading on another logic, which is the development logic of artificial intelligence that we just mentioned.

In addition, the impact of interest rate cuts on the US society and economy may also be far-reaching. The actual interest rate in the US housing market may reach around 7%. Most Americans buy cars and houses through loans, so Americans are very sensitive to interest rates. High interest rates will reduce consumption, while low interest rates will promote consumption.If this round of interest rate cuts begins, it will boost overall social consumption and investment, and the resilience of U.S. economic growth may be further enhanced.There is a high probability that a "soft landing" will occur.

Host: Yes, you just mentioned that the expectations of interest rate cuts are heating up. One impact of the rising expectations of interest rate cuts is that funds may flow from the high-tech sector to some high-dividend sectors. Can this also explain the recent signs of a pick-up in the US cyclical sectors?

Qu Shaojie:Yes, the US interest rate cut can stimulate economic growth first. Because the purpose of the interest rate cut is to promote economic growth, of course it also reflects the level of inflation. Economic growth will inevitably lead to an increase in demand for resources (such as oil and gas resources, metals). The order of benefit may be different, but overall it will provide some support for resource and commodity prices. If house and car sales increase, upstream resources such as lithium ore, aluminum, iron, copper, etc. will also benefit from it.

Moderator: We just focused on some policy aspects, such as interest rates and elections. From the perspective of market dynamics,The most watched issue since July has been the adjustment of large US technology stocks. Is the so-called US technology bubble about to burst? What do you think?

Qu Shaojie:The collective rise of US technology stocks is actually a very complex issue, and it has a very solid foundation behind it. The development of artificial intelligence is driven by these US technology companies. They are the ones who developed it. It is not that the US has an industrial policy to develop artificial intelligence, but that technology companies have developed artificial intelligence. Moreover, technology companies are competing to develop more advanced large models, and their chip companies will benefit. In fact, it is a spontaneous process.

There is a clear Matthew effect in this process. The bigger the technology company, the more cash it has and the more net profit it makes each year. Therefore, these technology companies can spend 50 billion yuan or more each year on capital expenditures, research and development, large-scale models, and chip purchases. The market also has consistent expectations for the outlook of these technology companies, resulting in a more obvious increase in the prices of these technology companies. Because of the consistent expectations, everyone thinks it is good and is reluctant to sell, so the technology stocks have been rising all the way.

Of course, there has been a pullback in technology stocks recently, which I think is actually relatively healthy. In the past, some analysts felt that the valuations of US technology companies were relatively high. At the previous high point of the stock price, the valuations of US technology leaders were generally around 30 times the price-to-earnings ratio, and their performance growth rate was actually almost able to match the valuation. From the perspective of the average price-to-earnings ratio in the past, the price-to-earnings ratio at the previous high point has exceeded the average price-to-earnings ratio, reaching 0.7 times the standard deviation, which is slightly overvalued.

Currently, there has been some correction in US technology stocks, and the P/E valuation has returned to an average of about 25 times. 25 times is a relatively common valuation situation. It has returned to 0.5 times the standard deviation of the average P/E ratio, which is actually a relatively healthy situation.

In the long run, US technology stocks have the momentum to continue to rise, and this momentum may last for a long time. We believe that the development of artificial intelligence is a long-term process.For investors, this opportunity to get on board during a pullback may be of greater significance.

Host: Overall, the performance growth rate and valuation are still in a matched state?

Qu Shaojie:Basically yes.

Host: You just said that although the U.S. stock market has been rising, our domestic investors are still relatively unfamiliar with the U.S. stock market. Have you analyzed the reasons behind this?

Qu Shaojie:I did a lot of grassroots research and found that many professional people did not invest in US stocks. I summarized this as behavioral finance. Because I felt it was unfamiliar, I was unwilling to take the first step to buy US stock funds.

The operation of buying a US stock fund is basically the same as that of buying other funds. Of course, its subscription and redemption period may be longer, and it also faces special risks such as exchange rate risk that are faced by overseas securities market investments.

Another very important reason is that the US stock market has been rising in the past, so we may worry about whether we will buy at a high point. Therefore, a pullback is beneficial and may also be a time to buy.

Moderator: You are a senior expert in overseas market investment research. I would like to talk about your methodology and experience in overseas market investment to see if you can bring some inspiration to investors. First of all, can you introduce your investment philosophy in overseas market investment?

Qu Shaojie: When investing overseas, we should stick to the perspective of institutional investors, because the US market is still dominated by institutional investors, and retail investors account for a relatively low proportion. From an institutional perspective, we value the certainty of listed companies more, that is, the certainty of future performance growth, rather than the possibility of high growth.There is a big difference between the two. I am sure that it can grow over a relatively long period of time. Even if the growth rate is not particularly high, it is in line with our investment philosophy. If the short-term performance explodes, there may be losses in the next year, and the uncertainty will be great. So I have very high requirements for long-term certainty.

In addition, high gross profit, high net profit, and high return on net assets (ROE), cash flow, and operating profit must all be able to match. I have very high requirements for these.We also need to look at financial statements to make investment decisions. In U.S. stock investment, I tend to adhere to the concept of long-term investment and focus on choosing a good company. The criteria for judging a good company are very good long-term certainty and very good financial performance. After choosing a good company, we tend to hold it for a long time and strive to earn the profits brought by performance growth. We will not include valuation fluctuations in the important consideration range, because valuation fluctuations are beyond our control. However, whether a company is a good company can be analyzed through financial data, which is the concept of long-term holding.

In addition, we also pay more attention to its position in the industry, which is reflected in whether it has high gross profit, which is also very important to Buffett. Only companies with moats or relatively high barriers to entry can have high gross profit.

These are our basic ideas. We like certainty, really good performance, and real money back, not just money back in the account. In addition, after finding a good company, we hold it for a long time.

Moderator: You just mentioned that there is a word in the investment framework——Moat, should the research on moat be focused on the research on the business model of the enterprise, or somewhere else? In what aspects does the moat manifest itself?

Qu Shaojie:We all say to look for companies with moats, but what are moats? In my personal investment experience, moats come from a good management team. For example, its business model is better, or it is more outstanding in this industry, which is all managed by people. Why do some companies have deeper moats or higher barriers to entry? This reflects the management level of the company.

For example, the investment team formed by Buffett and Munger is actually an excellent team. If we want to learn from Buffett, we must first learn how he manages the team. The team's management reflects that their business model is very good. It is because of their team's continuous polishing that such a business logic or business model is formed. Only after having a good business model can good operating results be reflected. Financial performance is actually the result of cause and effect. It is just a display of the performance results of this team operating on this business model.

At this stage, a good team and a good business philosophy are crucial issues, and they are the most core moat.

Moderator: I see. Stock selection is a combination of qualitative and quantitative methods. Quantitative financial data and financial statements are public and visible to us. Qualitative is people, the core of a company. You just mentioned that you value gross profit margin very much. Why?

Qu Shaojie:From Buffett's speech, we can know that gross profit margin is a core criterion for judging whether a company is excellent, and I agree with it. The simple definition of gross profit margin is that if the product or service is produced and the price sold is higher than the cost, it is a profitable business.

According to Buffett, investment is to invest in a good business and to truly treat this business as your own. From this perspective, if we want to invest in a very good business, the key factor is that it has a good gross profit and can make money. It is not difficult to have a high gross profit in the current period, but it is difficult to have a high gross profit in the long term. This is because the market is full of competition. If your business has a high gross profit margin, competitors will see it and enter the market. Under the influence of competition, everyone's gross profit may decline.

Host: Relatively reduced.

Qu Shaojie:Yes, it has decreased relatively. So high gross profit will be impacted and verified. If a company has been operating for 30 years or even longer, it can maintain a very high gross profit. This is what we call a good business model with a very strong management team behind it.

High gross profit is definitely not a very simple thing. High gross profit in the short term is relatively simple, but if you look at it from a long-term perspective, it is possible that others will compete with you. If you can maintain high gross profit for a long time under competition, it means that you have a very strong moat and others cannot lower your high gross profit.

Host: Mr. Qu, you are more concerned about the new energy vehicle industry as a whole. When did you start researching and paying attention to this industry?

Qu Shaojie:I started researching the automotive industry 10 years ago. New energy vehicles were relatively new 10 years ago. In the past five years, the penetration rate of new energy vehicles in China has been increasing, from single digits to more than 45% today. So we started paying attention to new energy vehicles relatively early.

Host: Why did you pay attention to this industry at that time and think it represents the direction of future innovation?

Qu Shaojie:The first person to develop and sell new energy vehicles, especially electric vehicles, was Musk from the United States. After he launched the Model S, I became particularly fascinated by this product, and I also found that this product could be part of a huge industrial innovation.

We quickly went to the first Tesla sales store in Shenzhen to experience it. More than a decade ago, a pure electric car could accelerate from 0 to 100 km/h in 3 seconds. In addition, it already had very basic intelligent driving, could follow the car, and had the function of "moving when the car in front moves and stopping when the car in front brakes". I was still very shocked at the time. So we judged that new energy vehicles may become the main force of passenger car sales, and we think it has great investment opportunities.

In addition, new energy vehicles are not just a car in the strict sense, they also have entertainment functions and intelligent driving functions.

The scenario is very large and the output value of this industry is also very large.The output value of the automobile industry has become an important pillar industry in China. Its industry scale is particularly large, and its products will undergo epoch-making subversive updates. Therefore, the investment opportunities it generates are also very good. This track is relatively "long slope and thick snow".

Moderator: It is a track with abundant investment opportunities. So looking back, what are the key nodes that new energy vehicles have experienced in recent years?

Qu Shaojie:First of all, China's new energy vehicles have surpassed the rest of the world. Now China is the world's largest producer and seller of new energy vehicles, and also the world's largest exporter of automobiles. This is a very impressive achievement.

In addition, the penetration rate in China has increased very rapidly, exceeding many people's expectations. People originally had some doubts about the charging and driving range of new energy vehicles, and even their performance in low temperature environments. But now most of these doubts have subsided. Our infrastructure construction and battery energy density have now been greatly improved, which is also a very important event.

In addition, intelligent driving has entered the unmanned driving stage. This is also in line with our original judgment.

Host: Carrot, run away?

Qu Shaojie:Yes, intelligent driving can be reflected in the "carrot running fast", and now it has basically entered the very high-level L4 level, that is, the real driverless level, which is far beyond everyone's expectations. In 2023, everyone is still relatively unfamiliar with intelligent driving, but now there are driverless taxis running on the road. In fact, the development of driverless taxis in the United States is also very rapid, especially in San Francisco and Los Angeles, where there are already many driverless taxis.

Host: Why has China's new energy vehicles achieved"Overtaking on a curve"? It is also one of the best in the world. What is the reason behind this?

Qu Shaojie:The most important reason is the human factor. Chinese automotive practitioners worked very hard in this process, even to the point of being quite competitive. This is all because our management team is really very good. Our new power team, for example, Lei Jun went to build cars, and he also took the attitude of starting a business for the last time in his life. You can see that the cars they built are very good, which means that our overall level of new energy vehicles is far beyond many countries.

In addition, China has a relatively complete industrial chain, with strengths in batteries, parts, and assembly. China's auto market is now the world's largest, so the industrial chain is definitely the most complete and the cost is definitely the lowest. Parts made in China are assembled in China and the design is very beautiful. Our overall industrial chain advantage is fully reflected in the new energy vehicle industry, and it is difficult for other countries to compare with us.

Host: Apart from China, looking at other overseas markets, which countries have the fastest increasing penetration rate of new energy vehicles?

Qu Shaojie:An interesting point is that the penetration rate of new energy vehicles in Nordic countries is very high. For example, in Norway, almost all their new cars are electric vehicles, close to 100%.

When buying new energy vehicles in Northeast China, people are very anxious about whether the mileage will be shortened in cold weather. However, in Nordic countries, such as Norway and Sweden, it is actually cold, but their penetration rate is currently the highest in the world. Because these countries are very concerned about environmental protection, the charging facilities are also very complete and charging is very convenient. In addition, these countries are also very supportive of energy-saving and environmental protection industries, which has led to the Nordic countries (new energy vehicle penetration rate) developing very well.

According to the latest monthly data, China's new energy penetration rate has reached more than 40%. The United States, as the first country to develop new energy vehicles, has a penetration rate of only 10%, which is still very low.

Host: Is it because the United States as a whole is vast and sparsely populated, and California on the west coast has a higher penetration rate?

Qu Shaojie:Yes, it is mainly concentrated in California, and the penetration rate of new energy in San Francisco is also relatively high. The penetration rate in the central region may be relatively low.

Host: If we further subdivide smart driving, is the chip the core?

Qu Shaojie:Yes, we just discussed one link, which is the moat, and the other link is the high gross profit margin indicator. The new energy vehicle industry chain is very long, from lithium mines, batteries, positive electrodes, negative electrodes, electrolytes, the entire battery pack, to complete vehicles, parts, and die-casting. Its industry chain is very long. There is also intelligent driving, which is the "crown jewel" of electric vehicles, and chips and large models are the "crown jewels" of intelligent driving. Their gross profit is very high, generally more than 50%.

The research and development and manufacturing of chips are particularly difficult. We are already able to put hundreds of millions, billions, or even hundreds of billions of small transistors and small circuits in a very small area of ​​a few square centimeters. The threshold is very high, the moat is relatively deep, and the gross profit is particularly high. In addition, they can provide a wide variety of chips, including smart driving chips, training chips, artificial large model inference chips, as well as mobile phone and computer chips. Their output value is very large, and it is a long slope and thick snow track with great potential and a relatively long cycle.

Host: Let’s go back to the market. In the second half of the year, do you have any promising sub-sectors in the bond market, stock market, commodities, foreign exchange, etc.?

Qu Shaojie:I am more optimistic about the equity market, because although the volatility of the equity market is greater than that of the bond market, its profit space is greater. Take the US stock market as an example. Its average annualized return rate has been more than 10% in the past ten years. If we can hold US equity assets for a long time, the returns should make everyone quite satisfied. I think this trend may continue in the future, because US technology companies are expected to continue to lead the wave of artificial intelligence, so US equity is a direction we are more optimistic about.

For the second half of the year, the market volatility may be greater than that of the first half. The current uncertainty factor is that the US election has not yet ended, and the impact of the new president's industrial policy on the market is also uncertain. Another factor is the actual implementation of the Fed's interest rate cut, because there will be several more Fed meetings, and there will be dovish or hawkish speeches, which will affect the capital market and bond market.

But volatility also brings opportunities. As long as we can persist in long-term investment, buy when others are panicking and falling, and have confidence in American technology companies, we can expect to reap good long-term investment returns if the US economy improves and there is no recession.

Host: Are you still very optimistic about the US stock market and US technology stocks?

Qu Shaojie:Yes.

Host: You experienced intelligent driving some time ago."Carrot Run"? What is its current level?

Qu Shaojie:It is actually at the level of L4 autonomous driving. We placed two orders for "Robot Run" in Nanshan District, Shenzhen. In the rainy weather and congested traffic, the safety officer did not take over the operation throughout the process, and "Robot Run" ran on its own. Overall, I think it can basically reach the level of a human driver with 2 to 3 years of experience. It is not yet very skilled and has not reached the level of a taxi driver, but it may perform better than a human driver who has just obtained a driver's license.

Host: A car that can drive intelligently is a technological product. What core technologies can be used in it?

Qu Shaojie: Mainly chips and models for intelligent driving.According to Musk's mainstream smart driving technology in the United States, the car has more than a dozen cameras to collect image information and visual information on the road. This system is called a pure vision system, and the car camera replaces the human eye.

Host: Do you think this technology will be used first in family cars, or will it be used on a larger scale first by Didi online car-hailing companies and taxis?

Qu Shaojie:First, the use of it in family cars has attracted social attention. In 2023, Musk's company in the United States and China's new forces have launched relatively advanced smart driving.

The latest round of hot topics is the driverless taxi "Robot Run", which has attracted everyone's attention. I think "Robot Run" has made society realize that intelligent driving has developed to a high level of driverless driving. Since "Robot Run" can be driverless, then the cars you buy in the future can also be driverless, and driving will become very easy, which will change everyone's concept of driverless driving. It will help driverless driving enter thousands of households and is conducive to the popularization of driverless driving. The ultimate popularization will still be in the field of home applications. In the field of taxis or Didi, I think it should help drivers reduce their workload and make their work easier, reflecting its greater value in such a good ecosystem.

Host: In your opinion, will the future investment opportunities in new energy vehicles still focus on driverless vehicles? And on semiconductor companies that have mastered core technologies?

Qu Shaojie:Yes. The penetration rate of new energy vehicles will continue to increase around the world. The US may increase from 10% to 30% and 50%. Europe also pays great attention to the research and development of new energy vehicles, so the penetration of new energy vehicles is a global event. We are all very concerned about climate change and hope to save energy, reduce emissions and live a low-carbon life. When more and more cars are sold, the next step is the rapid popularization and application of intelligent driving and unmanned driving around the world.

In addition, the number of chips in an electric car may exceed everyone's imagination. There are dozens of categories, and there are nearly a thousand different chips. In addition to chips, we are also very optimistic about smart driving software. These software mainly rely on the research and development of human algorithms, without physical production costs, and the gross profit margin of software companies may be higher because its value is very high.

We can also find that the research and development of intelligent driving systems is very difficult. We have seen that some traditional car companies in Europe still have great difficulty in developing intelligent driving systems and models, which proves that in the future, with more and more new energy vehicles in the world, companies with intelligent driving models will have good returns.

Moderator: I would like to ask a few more questions aboutQDII product allocation: We just talked about how domestic investors are still relatively unfamiliar with QDII products, especially those that invest in the United States. With the rise of U.S. stocks and the rise of QDII products this year, how should ordinary investors view the role of QDII products in the overall asset allocation? How can they use such products to build their own investment portfolios?

Qu Shaojie:From the traditional investment theory, it is not to put all your eggs in one basket, which is also very applicable to investing in overseas assets. In the past, we invested relatively few QDII funds overseas, and actually missed many opportunities. The markets including India, Japan, and Europe have performed very well in recent years, and some overseas gold products have also performed well recently.

How do we see it? You need to broaden your investment horizons, even if you just buy a little and take the first step.

We will strive to choose a product that we think is the most logical in the U.S. stock market or other overseas markets in the future, and then make overseas investments. For individual investors, there was not much experience in overseas investments in the past, so we should first cultivate our own overseas investment experience. After we have experience, we will gradually become familiar with it. I think there will be more and more good QDII funds in the market in the future.

Host: Yes, in fact, in addition to our Great Wall Global New Energy Vehicle Fund, which mainly invests in new energy vehicles, there are also some active and passive commodity funds, as well as those that invest in U.S. bonds. In fact, you can pay attention to them, which can diversify the income sources and risks of the entire portfolio.

Qu Shaojie:Yes, diversify your investments, don't put all your eggs in one basket, and reduce the correlation of your assets. This may be more theoretical. Some assets rise, some fall. After combining them into a personal investment portfolio, you don't have to worry too much when a certain type of asset falls a lot, because there are other assets that are rising. This is a relatively healthy, comprehensive, and diversified investment portfolio, and everyone's investment portfolio may be more stable.

Moderator: In fact, I believe that as fund managersThe promotion of QDII products, investment education, and investors' demand and awareness of global asset allocation are constantly improving. In the future, people may have a more comprehensive and rational understanding of overseas asset allocation and QDII investment, and will make more attempts, so the development prospects of QDII products should also be very broad.

Qu Shaojie:Yes, in fact, from the perspective of the past five or ten years, the development of domestic QDII funds has been very good, and the overall management scale has reached 500 billion yuan. Especially now there are many young people, and their understanding of the global economy, stock market or bond market is becoming more and more professional. Young people are brave enough to try and invest in new markets. Overseas markets are expected to become an increasingly mainstream investment market.

（CIS）

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