In the context of Inflation Hedging, a number of unpopular funds have become the most profitable fund products this year, and the three-month earnings of the best performing funds have killed the performance of the past three years.
The anti inflation theme products in public funds are receiving continued attention from funds. While the prices of crude oil, gold, soybeans and other related products continue to rise, the performance of relevant fund products continues to lead the market. At the same time, they are also sought after by funds in the difficult stage of fund issuance. Some newly issued Yellow Gold theme funds quickly enter the market with the attitude of ending the raising in advance. Correspondingly, The position of the world’s largest gold ETF fund is also increasing rapidly.
The data show that the top three in the whole market are all covered by anti inflation theme funds. Among them, Cathay Pacific commodity QDII fund, which has the best performance in the whole market, has achieved a cumulative return of more than 40% in the three months since the beginning of the year, killing the performance of the fund in the past three years.
unpopular funds earn money for three years in three months
in the context of the continuous rise of commodity prices, unpopular funds immediately became popular
According to the data, as of March 8, Cathay Pacific commodity QDII fund under Cathay Pacific Fund has had a cumulative yield of more than 40% year to date, and its amazing high yield has ranked the champion of fund performance in the year. Followed by Fidelity global commodity QDII, which has a yield of about 38% this year. Yinhua anti inflation theme fund, which ranks third, is also a QDII selected to track the comprehensive commodity index around the world, and its return this year is also close to 30%.
It is noteworthy that the high returns of some funds were created in less than three months, which also killed the cumulative returns of relevant funds in the past three years. Take Cathay Pacific commodities QDII fund, which gained the most in the year, as an example. The cumulative return of the fund in the past five years was 3.37%, and the cumulative return in the past three years was about 0%. Among the eight complete annual returns of the fund, the return in seven years did not outperform the performance in the last three months.
The background of the above-mentioned funds lies in the continuous rise of oil prices. Since the covid-19 epidemic, under the conditions of low investment, low production capacity and low inventory, the crude oil price has been rising all the way since it fell below US $20 / barrel from the lowest value. Although some institutions previously expected that the crude oil price might fall down in the near future at the beginning of this year, the Russian Ukrainian conflict has further amplified the market demand expectation for crude oil, Crude oil prices exceeded market expectations. Up to now, the price of Brent crude oil has remained around $130, which is an amazing price, but many investors and institutions believe that the price of crude oil may continue to rise, at least for a long time.
In this regard, the International Department of noan Fund pointed out that Russia and Ukraine are important exporters of global oil, natural gas, grains, metals, fertilizers, rare gases and other commodities, as well as the most important import source of these commodities in Europe. The conflict between Russia and Ukraine and the sanctions imposed by the United States and Europe on Russia will significantly reduce Russian commodity exports, thus pushing up relevant commodity prices.
The IEA also tends to believe that oil prices may rise further. The International Energy Agency said that the agency is discussing ways to increase supply with oil producing countries and ways to control demand with consumer countries. The situation in Russia and Ukraine may further push up oil prices. The agency expects that there is a huge oil supply gap in the global market, including European diesel. The IEA is “disappointed” with the response of oil producing countries so far, and believes that there is idle capacity available, and will recommend Member States to reduce oil demand.
Ping An Fund believes that the third round of negotiations between Russia and Ukraine has not made substantive progress, leading to the continuous high rise of global commodity prices. At present, some investors believe that the possibility of the end of the Russian Ukrainian conflict in the short term is gradually narrowing, and the resulting shortage of crude oil, some industrial metals and food crops cannot be solved in the short term. The world may continue to suffer from high inflation caused by high commodity prices.
funds continue to flow into the anti inflation Fund
While crude oil rose, the imported inflation caused by the conflict also aroused the concerns of fund companies, but on the other hand, it also provided a “gold absorption advantage” for anti inflation theme funds.
“At present, soybean prices have risen to near the historical high in 2012, and China’s imported inflation is under overall pressure.” Relevant people of Ping An fund stressed that although China’s PPI has declined, it still has a year-on-year growth rate of 9.10%. The absolute value of upstream product prices is still high, which continues to squeeze the profits of middle and downstream enterprises. It is not only dependent on crude oil, but also economic crops such as soybeans with high import dependence in China.
The continued rise in soybean prices is also reflected in the anti inflation theme fund products since this year. The Chinese reporter of the securities firm noted that the net value of Huaxia feed soybean meal futures ETF fund has increased by more than 26% this year, which makes this unpopular fund with soybean theme quickly shortlisted as the top ten funds with the strongest increase this year because of its anti inflation advantages and performance flexibility.
Chinese reporters from securities companies found that in addition to the anti inflation main line such as soybeans and crude oil, funds are also continuously flowing into gold theme funds under the anti inflation demand. As of March 7, the gold position of SPDR gold trust, the world’s largest gold ETF fund, was 105428 tons, an increase of 8.42 tons compared with the previous trading day.
Obviously, after US $2000 on the spot gold station, funds are continuously bullish on gold, so gold ETF funds have attracted the attention of hedge funds. According to the latest data from the World Gold Council, the net inflow of global gold ETFs in February was 35.3 tons (about US $2.1 billion). The inflow of funds from North America and Europe was almost equal, continuing the growth momentum since the beginning of the year. The main drivers of net inflows of global gold ETFs are high global inflation and surging geopolitical risks, which also contributed to a significant rise in gold prices.
China Securities Co.Ltd(601066) believes that the expected impact of interest rate hike on gold is gradually decreasing, the risk aversion of geographical pattern continues to ferment, and pricing may gradually start the second downward exploration of the global economy in the future. It is expected that the upward trend in the medium term will remain unchanged and firmly bullish.
In the context of anti inflation, gold theme funds are bringing significant hedging advantages to fund holders. Up to now, the yield of e fund gold theme fund has exceeded 12% this year, the yield of Boshi Gold Fund and Cathay Pacific Gold Fund has been close to 10% this year, and the increase of Hua’an Gold Fund since the beginning of the year has also exceeded 7%.
it is worth mentioning that in the current difficult stage of new fund issuance, the announcement of the early termination of the raising of new fund products itself means that the capital demand and more deterministic expectations provide an opportunity to escort the establishment of relevant products. The Chinese reporter of the brokerage noted that the Southern Shanghai Gold ETF fund is a rare new fund that announced the early termination of the raising this year. The gold fund was officially established on March 3. This means that under the current hedging demand, the new anti inflation fund products have significantly enhanced the issuance advantage.
fund managers expect risk aversion to continue to improve
Inflation has obviously become the key word of current fund investment. Jing Hui, manager of Nord fund, believes that the short-term risk aversion caused by recent geopolitical tensions will not change the expectation that global medium-term inflation may rise. Historical experience shows that the fluctuation level of Shenzhen Agricultural Products Group Co.Ltd(000061) , energy, metals and other commodities may rise at this stage. Yan Anqi, another fund manager of the company, stressed that with the outbreak of the conflict between Russia and Ukraine, other bulk commodities such as aluminum and nickel related to the production of new energy vehicles also increased, and the cost pressure increased sharply. The previous price increase has been partially offset by the rise of raw materials, and even the probability can not be fully covered.
When looking forward to 2022, Li Yixuan, manager of Yinhua anti inflation theme fund, also said that the energy market will continue to be in the process of change this year. The continuous game between the contraction speed of crude oil market supply and the withdrawal speed of crude oil demand will become a factor that needs continuous attention in the process of energy transformation. It does not rule out the situation of phased oversupply or tight supply, The fluctuation of energy prices may increase in the future. The Fed’s monetary policy has turned to curb inflation. The market has predicted that interest rates will be increased three times in 2022. Economic growth is not synchronized with inflation. Excessive interest rate increase may lead the economy into recession; The market’s expectation of the Fed tightening monetary policy has been priced in the previous decline in gold prices. The less than expected pace of reduction and the more than expected decline of the economy will benefit gold in the future.
Jingshun Great Wall stock investment department pointed out that the recent conflict and repeated negotiations between Russia and Ukraine, the rising risk aversion of investors and the sharp rise in commodity prices have also triggered the market’s concerns about upstream resource supply, future price pressure, inflation transmission and even the global financial market. The intertwined influence of the above factors has further promoted the market risk aversion and exacerbated the volatility of the global market.
The above fund company said frankly that the conflict between Russia and Ukraine may still ferment in the short term, and the uncertainty of geopolitical risks may still disturb the market. However, unless the situation further escalates and worsens, with the continuous advancement and interpretation of events, the impact on the A-share market may be passivated step by step, and the long-term trend of the Chinese market will still depend on its own fundamental driving force. After the early correction of the A-share market, the current valuation is at a low level, and there is limited room for further sharp decline. The recent government work report also reflects the reconfirmation of steady growth. It is believed that the follow-up policies will be overweight one after another. Under the background of being friendly to the market at the policy level and liquidity level, the market sentiment is expected to gradually pick up.
