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【Introduction】Fund companies make reverse layout, and new equity products are issued intensively

China Fund News reporter Zhang Yanbei

The current stock market continues to fluctuate, but fund companies are issuing new equity products more intensively. Public funds choose to make reverse layouts during the market downturn in the hope of seizing the opportunity to build positions at low levels and bring better mid- and long-term investment experience to holders.

In the industry's view, the current overall market valuation is at a low level and stocks have a high cost-effectiveness ratio, which makes it suitable to gradually start equity investment layout and accumulate chips for the future.

Multiple equity funds issued

Although market sentiment remains poor at this point in time, fund companies are still actively planning new products, and equity products remain the focus of the issuance market.

Wind data shows that there are currently 66 funds being issued (only the main code is counted), of which 42 are equity funds, accounting for 63.6% of the total issuance. Among the 18 funds waiting to be issued, 11 are equity products, accounting for more than 60%.

Specifically, among the equity funds being issued, active equity funds and passive index funds each account for half. According to fund managers, China Universal Asset Management has 4 equity products being issued, two active and two passive. Penghua Fund has 3 equity products being sold, including two active funds and one index product. In addition, GF Fund and Huaan Fund each have two equity funds being issued.

From the perspective of institutional investors, new funds are issued at low levels and positions are established, which makes it easier to accumulate chips for future investment. Li Yiming, senior analyst at Morningstar (China) Fund Research Center, said that judging from the funds currently in the issuance period, a considerable number are indeed active equity funds. Although the market continues to fluctuate, fund companies choose to deploy active equity funds at this point in time, probably due to the following considerations: on the one hand, active management still has the potential to obtain excess returns in the domestic market environment; on the other hand, historically, relatively sluggish market stages are often good opportunities for investment deployment.

A fund evaluation expert pointed out that with the continuous adjustment of the equity market, it is extremely difficult to sell equity funds. At this time, the fund companies' choice of reverse layout is a test of their equity investment capabilities and also reflects their confidence in the long-term stable development of China's capital market.

Actively practice reverse selling

Issuing funds at low levels is a concrete practice for fund managers to implement long-term investment concepts and reverse sales strategies.

So, why is the current time suitable for equity investment? In the view of industry insiders, the hot and cold of the fund issuance market often reflects the heat of the stock market. The cold reception of issuance indicates that the stock market is in a downturn, and this is a good time window to create returns for holders.

On the one hand, the current market valuation is at a historical low. According to Wind data, as of August 16, the rolling P/E ratio of Wind A-shares was 15.60 times, and the rolling P/E ratio of CSI 300 was 11.52 times, both at historical low levels. This means that the overall valuation of the current market is low, and investment has a high cost-effectiveness and safety margin.

On the other hand, the stock market has a relatively high price-performance ratio. The risk premium of the CSI 300 Index is currently at a relatively high level, indicating that market opportunities outweigh risks. From the perspective of major asset allocation, the implied price-performance ratio of stocks is at a relatively high historical level, and there is a large room for recovery in the equity market in the future.

In the past two years, more and more fund companies have begun to try reverse sales strategies, daring to do difficult but correct things. In the volatile market in recent years, the valuations of many industries and individual stocks are at a low level. Once the market shows a restorative trend, these industries and individual stocks are expected to benefit first. Many fund companies are aiming at the long-term implied rate of return and choose to "go against the current". Since the beginning of this year, the number of initiated funds in newly issued active equity products has occupied a large share, which is a concrete manifestation of this strategy.

Regarding the future fund issuance market, Li Yiming believes that whether the issuance of equity funds can really pick up depends largely on the trend of the underlying market. With the increase in investor attention, the issuance of index equity funds has shown an independent trend, which is worthy of attention.

Editor: Captain

Review: Xu Wen

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