Over the past decade, the Shanghai stock index has increased almost zero, but from the perspective of splitting its structure, the differentiation between industry and company performance is very significant. A large number of bull stocks have emerged in industries such as large consumption, medicine and scientific and technological innovation, with excellent performance; Many industries related to the cycle are bland.
At the same time, within each industry, those excellent head companies that have long-term competitiveness and can continuously create value also show obvious excess returns compared with other peers. Behind this industry and company stratification phenomenon is the structural transformation of China's economy, which is a reflection of excellent companies relying on technological innovation and entrepreneurship to continuously build competitive barriers and continuously create value. This differentiation will continue in the foreseeable future.
With the development and gradual improvement of derivatives, especially stock index futures market, the significant industry and company stratification of A-Shares provides investors with an opportunity to obtain more stable alpha income. Based on in-depth fundamental research, build a portfolio of high-quality companies in the buying potential industry, and peel off the systematic risk of the portfolio with tools such as stock index futures, so as to obtain relatively stable alpha income that is basically irrelevant to the rise and fall of the market. Huitianfu fund has relatively mature investment practice in this strategy. huitianfu absolute return strategy fund, established in March 2017, is the only public fund product in China that clearly adopts the basic face-to-face strategy.
According to the data, as of September 25, 2019, the cumulative income of huitianfu absolute income fund since its establishment was 25.40%, and positive income was obtained in each of the four closed periods since its establishment and the fifth closed period in operation. From the perspective of volatility, under the background of large amplitude of A-share market this year, the maximum withdrawal control of the fund is very low. Practice has proved that using the basic face-to-face investment strategy can not only share the capital market dividend moderately, but also avoid the market fluctuation risk to a great extent. It is an investment strategy that can effectively obtain a more stable and sustainable return in the A-share market.
So how does huitianfu absolute return fund realize such investment return? Because the return of the basic hedging strategy is the alpha return of its stock portfolio outperforming the hedging tool index, fund managers must have very excellent active stock selection ability in order to effectively build a stock portfolio with excess return. Strong active stock selection ability is the core advantage of huitianfu fund.
From the performance attribution analysis, most of the alpha income of huitianfu absolute income fund also comes from bottom-up fundamental stock selection. Adhering to the investment philosophy of huitianfu fund management company and with the support of the company's strong investment research team, the fund manager selects the best companies in various industries in the A-share market to build the stock portfolio based on in-depth analysis of business model, competition pattern and governance structure. Most of these companies significantly outperformed their respective industry indexes and pushed the overall stock portfolio to outperform the main market index as a hedging tool, thus enabling the fund to achieve stable alpha returns.
In addition, the current structure of the main indexes in the A-share market is unreasonable, and the industry weight related to the traditional economic growth model is still high. With the economic transformation, the industry stratification continues. Huitianfu absolute return fund will also make some industry deviations in a relatively small range based on in-depth fundamental research, which also contributes to some alpha income.
Considering that the market style will change in stages, alpha, which is basically facing the hedging strategy, will also fluctuate to a certain extent. Both industry deviation alpha and stock selection alpha will increase the fluctuation of portfolio alpha when the market style changes in stages. Since the control of industry deviation is intuitive and simple, it is a strategy to balance the alpha and volatility of the portfolio by controlling industry deviation. In investment practice, by strengthening the control of industry deviation and focusing on stock selection alpha, we have indeed significantly reduced the volatility of the portfolio and achieved a better ratio of alpha and volatility.
In the long run, the long-term outperformance index of high-quality companies selected in the fundamental research has a strong certainty of contributing alpha earnings. Based on in-depth, forward-looking and timely fundamental research, the ability to obtain alpha is more certain than other hedging strategies that rely on synchronous or lagging indicators.
(Daily Economic News)
