I. recently, public funds have actively self purchased, and the scale of self purchase has been announced to exceed 1.4 billion yuan. Since the beginning of 2022, affected by the hawkish turn of overseas central banks and the spread of mutated viruses, the volatility of global stock markets has intensified, and A-Shares have also undergone periodic adjustments. Especially in the week before the Spring Festival, the stock indexes of A-Shares and two cities accelerated their decline. The Shanghai Composite Index fell below 3400 points and the gem index fell below 3000 points. Despite the recent downturn in market risk appetite, based on confidence in the long-term and stable development of the A-share market, many public funds announced to purchase their funds with their own funds. In the three days from January 26 to January 28 alone, 22 public funds announced self purchase, with a scale of more than 1.4 billion yuan. In addition, recently, several popular fund products of Ruiyuan fund, e fund and Wells Fargo fund have gradually liberalized the purchase restrictions.
II. Is the public offering not far from the bottom of the market? Taking history as a mirror, the self purchase scale of funds at the end of the year is relatively high. For example, the self purchase scale of funds in 2017, 2019, 2020 and December 2021 is the highest in the whole year. In addition, after short-term sharp fluctuations in the market, the self purchase scale of the fund is also easy to be large-scale, such as July 2015, may 2016 and December 2019. The large-scale self purchase of public funds is not equal to the buying signal, but when the market falls to a certain extent or lasts for a period of time, the opening of the self purchase tide of public funds is often one of the signals of building the bottom of the market. For example, from June to August 2014, the public fund made a large net subscription, and the A-share market warmed up in September; From February to April 2020, the public fund made a large net subscription, and the A-share market warmed up in April. The large-scale self purchase of public funds will inject incremental funds into a shares, which also shows the institutional confidence in the long-term healthy and stable development of China's capital market and helps to stabilize market sentiment.
III. investment strategy: the conditions for stabilizing A-Shares may be gradually met. Since the beginning of the year, affected by the policy shift of the Federal Reserve and the effect of China's Spring Festival, the sentiment of A-Shares has tended to be cautious. There is no need to be too pessimistic in the future. A shares fell rapidly in the early stage. Even in the process of adjustment, there will be an "oversold rebound" at a certain stage, and the conditions for A-Shares to stabilize may be gradually met: 1) at present, the market has fully expected the fed to raise interest rates, and the overseas policy shift will not restrict China's monetary policy orientation. In the next 1-2 quarters, The market will still be in the window period of "wide currency"; 2) Popular fund products gradually liberalize subscription restrictions, and residents' funds are expected to continue to enter the market after the Spring Festival; 3) Public offering opens the tide of self purchase, injects incremental funds into a shares, highlights institutional confidence and builds an "emotional bottom" of a shares. In terms of configuration, pay attention to three main lines: 1) related to traditional infrastructure, such as banks and building materials; 2) Real estate and its upstream and downstream industrial chain benefiting from the marginal improvement of real estate policy; 3) Strong themes that benefit from the promotion of policies (support), such as new energy (vehicles), digital economy, etc.
Risk tips:
Repeated outbreaks outside China; Large fluctuations in overseas markets; The profit of the enterprise is less than expected; Overseas Black Swan incident (political risk, sovereign rating downgrade), etc.
