Gu Ailing’s victory can’t dilute her sadness.
Not only US Xiaobai, but also the global giants failed to withstand the big wave of A-Shares in 2022.
Let’s start with two quantitative giants.
Morningstar data show that man numeric China a Equity Fund Class I USD, an A-share Fund issued by Eastman, the world’s largest listed hedge fund, could not escape the disaster. As of January 31, the net value of the fund’s main share lost 7.5%.
Eastman is the world’s largest listed hedge fund. By the end of September 2021, its total management scale was $139.5 billion. Man numeric is the quantitative investment department of Ensman, which specializes in institutional investors. This department is headquartered in Boston, London. Numeric’s investment method is based on the combination of fundamentals and data. Instead of superstitious statistical laws, numeric makes investment decisions in combination with data laws and underlying economic principles.
At present, the scale of this Chinese fund is still relatively small, only US $30.97 million.
If you look at it for a long time, the performance of this fund is still good. For example, in 2020, the yield of the main share was 33.6%, and in 2021, the yield of the main share was 15%. Although it is not amazing to look at the earnings in 2020 or 2021 alone, it is rare to maintain such earnings in two years, because the style of A-Shares has changed significantly in 2020 and 2021.
Even so, the market will not let it go in 2022.
The same is true of China’s A-share fund under AQR, another quantitative giant.
AQR is a hedge fund co founded by cliff Asness and others. Unlike other institutions, AQR has both public funds (public funds using hedging instruments) and private funds. Because cliff Asness believes in value investment, AQR was very difficult in previous years. After large redemption, several funds were closed. However, in 2021, value stocks returned in the United States, and his company gradually improved.
However, entering 2022 brings challenges to the Chinese market.
The main share of AQR China’s A-share fund had a net loss of 5.5% by the end of January 2022. The return rate of the fund is 10.2% in 2021 and 29.3% in 2020. AQR also uses a combination of quantitative and fundamental investments.
The losses of the two quantitative giants are not the most serious among Chinese funds issued overseas.
Since 2022, all the top five overseas Chinese equity funds have suffered losses.
the top five overseas Chinese equity funds were destroyed
Let’s look at them one by one.
The largest overseas Chinese equity fund is Allianz China A-share fund.
As of February 7, 2021, the net value of Allianz China A-shares – Pt – USD, the share of Allianz China A-shares fund, lost 7.84%, and the benchmark MSCI China A-share onshore index lost 7.30% in the same period.
This fund is not only the largest overseas but also the largest Chinese Equity Fund in the world.
Data from Bloomberg show that as of December 31, 2021, the largest Chinese equity fund, the largest A fund in China, was 12 billion 248 million 900 thousand USD, which was equivalent to 78 billion 95 million yuan in the exchange rate of RMB to the US dollar (RMB 1 in December 31, 2021, 6.3757 yuan in the interbank currencies market), and surpassed the Baijiu liquor index A. Become the world’s largest Chinese Equity Fund.
The positions of Allianz Shenzhou A-share fund are relatively balanced, and the top ten heavy stock portfolios account for about one third. Even so, it suffered a loss of 7.8%.
Among them, the number one heavyweight stock Contemporary Amperex Technology Co.Limited(300750) fell 7.25% in 2022 as of February 9.
China stock market news, the second largest heavyweight stock, fell more than 10% over the same period.
The second largest overseas Chinese equity fund is “Morgan Fund – China A-share Opportunity Fund”. The main share of this fund had a net loss of 9.3% by the end of January 2022. The latest scale of the fund is about 47 billion yuan.
The fund suffered a slight loss last year, with a loss of more than 20% in 2018. It achieved good returns in 2019 and 2020.
By the end of 2021, the largest heavy position stock of the fund is Contemporary Amperex Technology Co.Limited(300750) , which is the same as Allianz Shenzhou A-share fund. The second largest heavyweight stock Wuliangye Yibin Co.Ltd(000858) , fell 13.09% as of February 9, 2022. The top ten heavyweight stock portfolios account for 28%, which also belong to those with scattered positions.
The third largest Chinese equity fund overseas is UBS (Luxembourg) China selected equity fund, with the latest scale of US $7.6 billion. The net loss of the fund’s main share in 2021 exceeded 25%. However, since 2022, although still trapped in losses, the loss range was only 2.6% by the end of January, which was the lowest among the five major overseas Chinese equity funds.
The largest heavy position stock of the fund is Tencent holdings. Tencent Holdings’ share price rose 12.18% as of February 9 this year.
The second largest heavyweight stock is Kweichow Moutai Co.Ltd(600519) , and the share price fell 8.63% as of February 9, 2022.
UBS’s position in this fund is more concentrated than that of the first two funds, and the portfolio of the top ten heavy positions accounts for more than 50%.
The fourth largest overseas Chinese equity fund still comes from Morgan asset management, which is Morgan China Fund. As of the end of January 2022, the net value of the fund’s main shares has decreased by 6.0%, and the latest scale of the fund is about US $6.5 billion. The net value of the fund also fell by nearly 20% last year.
The fund’s first heavyweight stock is Tencent, the second heavyweight stock is meituan, and the third heavyweight stock is Alibaba. Meituan’s share price rose 4.96% as of February 9 this year. Alibaba (Hong Kong stock) shares have also risen by about 8% as of February 9 this year.
The fifth largest Chinese equity fund overseas is Schroder international selection fund China a, an international select fund under Schroder, with a latest scale of US $5.281 billion. As of January 31, the net value of the fund’s main shares has fallen by 10.7% since 2022. The fund’s main share recorded a positive return of 6% in 2021.
The top three heavy positions of this fund are Ping An Insurance (Group) Company Of China Ltd(601318) , China Merchants Bank Co.Ltd(600036) , Oppein Home Group Inc(603833) . Among them, Ping An Insurance (Group) Company Of China Ltd(601318) shares rose by more than 5.22% as of February 9, 2022, China Merchants Bank Co.Ltd(600036) shares also rose by 6.43% as of February 9, 2022, Oppein Home Group Inc(603833) shares fell by more than 6% in the same period. The performance of these stocks is not too bad. Why did the net value of the fund fall by 10% in January. Combined with other heavy positions of the fund, the fund Jun found that the drag of pharmaceutical stocks in the portfolio may be a major reason. For example, since Jiangsu Hengrui Medicine Co.Ltd(600276) 2022, the share price of the fund has fallen by 16% as of February 9.
Why did the top five overseas Chinese equity funds collapse in 2022.
First, the market environment is complex, and stocks with various industry themes fell together.
In addition, another important reason is that in recent years, the main ideas of foreign capital distribution in China tend to be the same. Consumption upgrading, scientific and technological development, transformation of old and new energy and medical health are the ideas of most foreign capital distribution. In addition, there are many restrictions on the investment of large funds themselves. Foreign investors are optimistic about the same track. On the same track, they tend to choose industry leaders. In this way, it is inevitable that there will be some overlap in the combination.
Congestion is bound to bring fluctuations. In 2021, similar to China’s top class public funds, large-scale overseas Chinese equity funds also suffered losses together. This shows that for nuggets A shares, foreign institutions need to enhance their ability to tap stocks, and large stocks and well-known stocks with peer funds have become dangerous.
