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funds are still looking for undervalued sectors in the high dividend and bonus segments.

since july, the power sector stocks have started to fluctuate after hitting new highs, and many stocks in the banking, highway and other sectors have successively followed the market sentiment. however, recently, the share prices of public utilities represented by ninghu expressway, shandong expressway and qingdao port have also started to fluctuate and correct after hitting record highs. on august 30, ninghu expressway fell 1.47% and qingdao port fell 2.47%.

have utility stocks such as highways and ports reached their highs? which funds have captured the recent new highs and what are the investment strategies of fund managers?

"the recent significant adjustments in the highway sector are more the result of short-term capital flows and market games. this phenomenon is called 'high-low cutting' in the market. from a long-term perspective, as the selling pressure is fully released, the highway sector is still expected to bring expected returns to investors." wu zhipeng, fund manager of debang fund, told china securities journal reporters.

funds are heavily invested in these record high stocks

judging from the fund trends in the second quarter, funds are continuing to move toward high-dividend and bonus assets, looking for undervalued stocks in the dividend sector. highway stocks that are heavily held by many fund managers continue to set new highs.

the huatai-prudential dividend etf managed by liu jun and li qian has heavy holdings in several highway stocks that have recently hit new highs, including ningbo-shanghai expressway, shandong expressway, and shenzhen expressway.

among them, the fund holds 27.976 million shares of nanjing-shanghai expressway and 52.2357 million shares of shandong expressway, ranking third among the top ten circulating shareholders of the two companies. in the second quarter of this year, the fund continued to increase its holdings of nanjing-shanghai expressway by 723,600 shares. at the same time, it also holds 31.5095 million shares of shenzhen expressway, ranking fifth among the top ten circulating shares of the company, and continued to increase its holdings by 842,400 shares in the second quarter.

from the top ten holdings of liu jun and li qian, we can see that their positions are mainly in dividend sectors such as banks, railways, highway utilities, ports, and coal. financial industry investment stocks account for 26.55% of the market value, mining industry accounts for 22.83%, manufacturing industry and transportation warehousing and postal industry account for 22.39% and 12.68% respectively.

judging from performance, huatai-pinebridge dividend etf has reaped great rewards in the dividend sector in recent years. as of august 30, the fund's annualized return reached 6.81%, and its total return since its establishment reached 223.16%.

the e fund stable income a managed by hu jian has heavy holdings in china shipbuilding, qingdao port, cosco shipping energy, shanghai international port group and other stocks. it ranks seventh among the top ten circulating stocks of qingdao port. the stock market value of transportation, warehousing and postal industries accounts for 5.82%. the annualized return of the fund reaches 6.16%.

the agricultural bank of china strategic income one-year holding fund managed by zhang feng and yao chenfei gradually sold its moutai positions in the first half of this year and shifted its positions to utility stocks such as datong-qinhuangdao railway, ning-shanghai expressway and china merchants highway, capturing the sector's rising cycle. as of august 30, the fund's performance in the past year increased by 3.30%, but in the long run, the fund lost a lot of money on consumer stocks, and its annualized return was still a loss of 12.07%.

bonus defense strategy bonus trend

china securities journal reporters noticed that some fund managers who have heavy holdings in the dividend sector have relatively cautious holding strategies, and reducing holdings and diversifying investments are one of their main defensive strategies.

in the second quarter, zhang feng and yao chenfei adopted a neutral to low position strategy and reduced their positions slightly. due to good position control and relatively heavy allocation to dividend sectors, the portfolio achieved positive returns in the second quarter. "the portfolio followed the idea of ​​prudent operation in the second quarter, and the volatility of the portfolio was well controlled. in terms of industry, the current portfolio is mainly composed of low-volatility dividend sectors such as electricity, highways, operators, and transportation. at the same time, we also made a small layout of some low-priced high-quality growth stocks." zhang feng and yao chenfei said in the second quarter report.

zhang feng and yao chenfei said that as the semi-annual reports are released one after another, the market situation in the third quarter will gradually revolve around the performance of the semi-annual reports. they will continue to focus on low-volatility dividend sectors, and will also look for investment highlights from the semi-annual reports and high-quality growth stocks with suitable cost performance for allocation.

western profit quantitative value one-year holding and western profit state-owned enterprise dividend index enhanced a, both managed by western profit fund shengfengyan, also newly entered ning-shanghai expressway in the second quarter. among them, western profit state-owned enterprise dividend index enhanced a, which has better performance, achieved an annualized return of 11.57%.

from the perspective of investment strategy, shengfengyan has always maintained a high stock position operation, and at the same time, the stock holdings are diversified to weaken the impact of black swans of individual stocks. in addition to heavy positions in tangshan port, daqin railway and other public utility sectors, bank stocks and coal stocks are also shengfengyan's favorites.

the leading companies have obvious valuation premiums

as for the continuous search for certainty by funds in the dividend sector, with the highway sector taking over from the power and banking sectors and setting new highs, has the long-term valuation been consumed?

wu zhipeng believes that two birds in the forest are worth one bird in the hand. as the economy moves from a high-speed growth stage to a new era of high-quality growth, it is no longer a simple pursuit of economic volume and high growth rate. against the backdrop of this transformation, investors' pursuit of certainty and avoidance of uncertainty are increasing. this trend has been clearly reflected in the equity market. since the beginning of this year, those pan-dividend assets with stable long-term profits and abundant cash flow have performed well. this shows that the market is increasingly inclined to choose assets that can provide sustained returns and lower risks rather than those that may bring high volatility returns. this change in investor preferences reflects the importance of steady growth and value creation under the new normal of the economy.

however, the fund manager believes that the highway sector still has a high investment value, and uses citic's third-level highway industry as a representative of the entire highway sector. from a historical perspective, the industry's price-to-earnings (pe) valuation is about 12 times, which is at the lowest level of about 42% of its entire historical valuation range. the price-to-book (pb) valuation is about 1.2 times, which is at the lowest level of about 46% of its entire historical valuation range. "the pe and pb valuations of the highway sector are close to the median of historical valuations. although it cannot be called an extremely attractive undervaluation, it is far from an extreme level." wu zhipeng said.

jin dalai from the equity research department of golden eagle fund told reporters that the overall valuation level of the current public utilities sector is not high, but some core leaders do have high valuations. specifically, the performance growth rate is about 10%, but the current market gives a pe valuation of nearly 20 times, showing a significant valuation premium. core leading stocks often have obvious benchmark signal effects, and their callbacks will bring about follow-up callbacks of second-tier stocks within the industry. even if their valuations themselves are not too high, this spillover effect may also spread further to other high-dividend industries.