Three main lines to deal with the risk of global liquidity tightening
The pace and intensity of liquidity tightening in developed economies led by the Federal Reserve in 2022 have an important impact on the global stock market. In the context of declining valuation, screening appropriate investment themes and seizing structural opportunities can hedge the negative impact of rising volatility. The author combed the three main lines of "specialization and innovation", "industrial upgrading" and "ESG" as the context of this year's theme investment.
The first main line: specialization and innovation
The concept of "invisible champion" overseas can be benchmarked to "specialization and innovation". When Germany occupies a small number of global top 500 enterprises, it can still expand the international market with "small and excellent" enterprises. The Chinese market can give full play to the "big and beautiful" advantages of many global top 500 enterprises, combined with many "small and fine" specialized new small giants to deal with the risk of falling export boom. From the perspective of historical performance, the "invisible champion" indexes of Germany and Switzerland took off against the trend during the period of rising real interest rates, and performed better than the market, thanks to their financial self creation and stable profitability. The development and growth of China's "specialized and special new" enterprises can also be used as the target of investment.
The second main line: industrial upgrading
The inertial thinking of "raising interest rates and shrinking the table = collapse of overseas technology stocks" does not seem to stand: the top two contributing to the return of the US stock market in history are profit push and shareholder repurchase, with the lowest contribution to valuation; In the process of interest rate hikes from 2015 to 2018 and the rise of real interest rates at the beginning of the century, the relative performance of the NASDAQ index is better. In a relatively loose liquidity environment, the contribution of total factor productivity to economic output has a greater impact on science and technology stocks. Overall, when the performance of US technology stocks is good, the loose / tight monetary policy basically accounts for half. From the perspective of technology driven, the time point when U.S. technology stocks outperformed the market four times is also when total factor productivity (TFP) contributed the most to total output. The profit advantage of emerging industries under industrial upgrading can hedge the risk of weakening valuation to a certain extent.
The third main line: ESG theme investment
The ESG index has risen significantly relative to the S & P 500 index four times, two of which occurred in the process of rising real interest rates in the United States. From the search volume of the word ESG in google trends, as early as the beginning of 2019, ESG's overseas attention began to rise, and the performance of ESG index began to emerge in the same period. Many institutions incorporated ESG investment philosophy and invested in ESG themed stocks, showing a "blowout" rise. In terms of "e", China's "double carbon" goal and overseas energy revolution have promoted the switching from traditional energy to new energy. From the two dimensions of "corporate governance" and "social responsibility", it can also avoid the reputation risk of invested enterprises. ESG theme investment helps to grasp the opportunities of higher returns and lower volatility above the capital allocation line.
Risk tip: the global supply bottleneck has not been alleviated, and overseas countries have not yet got rid of the impact of the epidemic
