Foreign capital stocks are increasing their positions in China!
Recently, capital group, an American asset management institution with assets under management of about US $2.6 trillion, increased its positions in Chinese stocks. Within more than 10 trading days, the number of holdings of Kweichow Moutai Co.Ltd(600519) by one of its ETFs has doubled.
Among the 56 Chinese exchange traded index funds (ETFs) listed in the United States, three have attracted a net inflow of more than US $1 billion this year, of which kweb has the largest net inflow, with a net inflow of US $1.413 billion (about 9 billion yuan), with a total scale of us $6.48 billion, and has returned to the throne of the largest overseas Chinese stock ETF.
In addition, Goldman Sachs, Morgan Stanley and other foreign-funded institutions have expressed their optimism about the value of China’s asset allocation.
overweight Chinese stocks, targeting Kweichow Moutai Co.Ltd(600519)
It is reported that capital group is one of the three major mutual fund management companies in the United States and one of the most respected investment management companies in the world. It is good at active stock selection, long-term investment and multi fund manager joint management system. In the past 10 years, 20 years, 50 years and even longer, the investment performance of capital groups has been praised.
In late February this year, the capital group entered the ETF field for the first time and launched six actively managed ETFs, two of which mainly invested in the global market, including the Chinese market. As of March 11, the positions of these two ETFs included the shares of many Chinese companies. Recently, the two ETFs have fully increased their positions in Chinese stocks.
According to the statistics of Chinese reporters of securities companies, as of March 28, ETF with code of cgxu increased its holdings of YaoMing biology, Wuxi Apptec Co.Ltd(603259) , ENN energy, Shenzhen Inovance Technology Co.Ltd(300124) , Kweichow Moutai Co.Ltd(600519) , 28500 shares, 9200 shares, 23200 shares, 9500 shares and 1600 shares respectively, while clearing its positions in meituan code cggo’s ETF increased its holdings of Kweichow Moutai Co.Ltd(600519) and Ping An Insurance (Group) Company Of China Ltd(601318) 1400 shares and 18000 shares respectively in the same time period, and 29155 shares were newly entered into lufax, while clearing its position in country garden. However, at present, the scale of the two ETFs is only tens of millions of dollars, and the number of positions in Chinese stocks is still small as a whole.
It is particularly noteworthy that the two ETFs have increased their holdings of Kweichow Moutai Co.Ltd(600519) by a large margin, and the number of cgxu’s holdings has doubled. It is reported that the main line of capital group’s allocation of Chinese assets focuses on the fields of digitization, health care and consumption upgrading. By the end of 2021, eight funds under the capital group (the same fund sold in different markets is counted separately) held Kweichow Moutai Co.Ltd(600519) , and the European The Pacific Securities Co.Ltd(601099) growth fund with the highest market value held Kweichow Moutai Co.Ltd(600519) with a market value of about US $1.755 billion.
overseas China ETFs continue to attract gold
According to ETF website (ETF. Com.) According to statistics, among the 56 Chinese exchange traded index funds (ETFs) listed in the United States, as of March 28, the three ETFs that have achieved the largest net capital inflow this year are kweb (tracking China Internet Index), mchi (tracking MSCI China Index) and FXI (tracking China market index), attracting net capital inflows of US $1.413 billion, US $1.397 billion and US $1.157 billion respectively.
it is worth noting that the latest data show that kweb has returned to the throne of the largest Chinese stock ETF overseas, with a total scale of US $6.48 billion, and the latest scale of mchi, the second largest, is US $6.33 billion
foreign funded institutions are optimistic about the value of China’s asset allocation
Recently, a number of foreign-funded institutions have issued views that they will still focus on emerging markets, including the Chinese market, in the allocation of major global assets.
Goldman Sachs released a report that based on good growth targets, loose policies, extremely low valuation and low investor positions, it still maintains “over matching the Chinese market”. Goldman Sachs reported that the current Chinese market is oversold, and MSCI China‘s fair P / E ratio should be 12.5 times, rather than the current 9.9 times, which is the lowest in six years. Promising sectors include: themes supported by Chinese policies, such as new infrastructure and social equity, individual stocks repurchased, and some sectors with deep discounts in valuation.
Morgan Stanley currently maintains the standard configuration of China’s stock market, and believes that if there are further trends in covid-19 policy adjustment, improvement of global geopolitical situation, more stable real estate market, more coordinated implementation of policies by different government functions and revitalization of offshore IPO market, the stock market rebound may be more sustained.
Allianz investment believes that China’s fiscal and monetary policies have turned to steady growth, “China has taken measures to increase government expenditure, and the government has repeatedly stressed the importance of maintaining stability this year.” Considering that the financial environment may tend to be loose and the valuation may decline, China’s stock market will usher in a more favorable environment this year.
head Lu Wenjie, investment director of foreign capital public offering BlackRock fund, also said recently that Hong Kong stocks cover many high-quality Chinese private enterprises, especially highly innovative companies, whose fundamentals have benefited from the take-off of China’s economic development for a long time. Therefore, the future investment direction of Hong Kong stocks and A-Shares mainly depends on the changes of economic fundamentals and industry fundamentals. Will focus on four aspects:
First, the relevant sections of the “steady growth” policy, including bank stocks, upstream energy and raw materials stocks, etc;
Second, consumer stocks. The impact of the epidemic has the greatest impact on consumer stocks, and the current valuation of such stocks is very low, so the rebound potential of consumer stocks is huge;
Third, stocks dominated by technology, e-commerce and the Internet. There are many good companies like Hong Kong stocks, but their valuations have been greatly reduced due to the impact of some previous industry regulatory policies. Therefore, these stocks also belong to those with strong rebound elasticity after the return of risk appetite;
Fourth, the stocks of some companies that embody the advanced manufacturing industry in China. In this category, the valuations are not very low, but there are still some parts that can be tapped when the overall valuation of the Hong Kong stock market is low.
