Recently, Fidelity International, UBS asset management, Schroeder and other overseas asset management giants announced the latest position data. Fidelity International is optimistic about its heavy Internet stocks, and jd.com and meituan gained their holdings in February; UBS asset management doubled its holdings of Tencent at the beginning of this year, reduced some positions during March, and some core assets of A-Shares were also reduced.
Many overseas giants are optimistic about the current Chinese stock market. Shi bin, head of China equities at UBS asset management, recently expressed his view that the attractive long-term trend of the Chinese market still exists, and he has confidence in the Chinese stock market, which needs more patience at present.
5 trillion overseas giants add positions to the Internet
China consumer power fund, a China Equity Fund under Wells Fargo international, recently disclosed its position data as of the end of February, and Internet giants such as meituan and jd.com were greatly increased.
According to the data released by Morningstar, during February, China’s consumer power fund increased its holdings of meituan by 24.46%, and the market value of its position at the end of the period reached US $174 million, making it the eighth largest heavy position stock; JD group gained an additional 28.97% of the shares, and the market value of its position at the end of the period reached US $158 million, making it the tenth largest heavy position stock; Netease also gained an additional 11.55% of its shares, with a market value of $162 million at the end of the period, making it the ninth largest heavy position stock.
In addition, Tencent holdings, the largest heavyweight stock of China’s consumer power fund, also increased its holdings by 4.33%, with a market value of $449 million at the end of the period Kweichow Moutai Co.Ltd(600519) , AIA, etc. were also slightly increased by the fund.
Screenshot source: Morningstar official website
According to the official website of Fidelity International, Fidelity International, founded in 1969, is an independent company jointly owned by the founder’s family, management and senior employees. It is one of the trusted global leaders in the investment management industry. As of December 31, 2021, Fidelity International has managed assets of US $812.8 billion (equivalent to RMB 5.17 trillion) for more than 2.7 million customers worldwide.
Fidelity International is one of the largest active asset management institutions in the world. It has more than 20 years of investment experience in China. It is also one of the first foreign-funded institutions to enter the Chinese market. Fidelity International’s investment mainly covers the Internet, medical and consumer industries.
UBS asset management batch reduction of heavy positions
UBS asset management is also one of the first foreign investors to enter China. It has a history of more than 20 years in China, and its investment industries are mainly consumption, Internet, finance and so on.
At the beginning of this year, UBS (Luxembourg) China selected stock fund, a fund under UBS asset management, doubled its holdings of Tencent and expressed its optimism about Internet stocks with practical actions. However, after entering March, the fund reduced some Tencent positions.
Morningstar data show that Kweichow Moutai Co.Ltd(600519) was promoted to the largest heavy position stock of UBS (Luxembourg) China selected stock fund, but it reduced its holdings by 7.98% in March, with a market value of USD 579 million at the end of the period; Tencent holdings, the second largest heavy position stock, was also reduced by 4.78%, with a market value of $571 million at the end of the period.
In addition, Netease, Alibaba, stone Pharmaceutical Group, Ping An Insurance (Group) Company Of China Ltd(601318) H shares and AIA were also reduced, of which AIA was reduced by 13.1%, with the largest reduction.
Screenshot source: Morningstar official website
UBS (Luxemburg), another large-scale Chinese Equity Fund under UBS asset management, also reduced its heavy positions in March, Kweichow Moutai Co.Ltd(600519) , Tencent holdings, Alibaba, stone Pharmaceutical Group, Ping An Insurance (Group) Company Of China Ltd(601318) H shares, among which Ping An Insurance (Group) Company Of China Ltd(601318) H shares were reduced by 21.94%.
Morningstar data show that Kweichow Moutai Co.Ltd(600519) was reduced by 6.06% in the first heavy position stock of the fund, and the market value of the position at the end of the period was US $231 million. Tencent holdings, the second heavy position stock, was reduced by 2.35%, and the market value of the position at the end of the period was US $227 million.
However, during March, the fund increased its positions in some financial stocks. China Merchants Bank Co.Ltd(600036) H shares were increased by 6.86% and HKEx by 3.22%.
Screenshot source: Morningstar official website
According to the data on the official website of UBS asset management, by the end of 2021, the asset management scale of UBS had reached 1.2 trillion Swiss francs, equivalent to about 8.17 trillion yuan.
Schroeder reduces some heavy positions
Schroeder investment group, as an old asset management giant, is also one of the first foreign asset management companies to enter China. However, the latest data show that the Chinese equity fund of the asset management giant has also reduced its holdings of some heavy positions.
According to the data recently released by Morningstar, Schroder China enterprise stock fund under Schroder investment group reduced its holdings of Ping An Insurance (Group) Company Of China Ltd(601318) , Kweichow Moutai Co.Ltd(600519) , China Merchants Bank Co.Ltd(600036) and other heavy stocks in March, Ping An Insurance (Group) Company Of China Ltd(601318) decreased by 10.34%, Kweichow Moutai Co.Ltd(600519) decreased by 9.29%, and China Merchants Bank Co.Ltd(600036) decreased by 12.37%.
In addition, Oppein Home Group Inc(603833) , Midea Group Co.Ltd(000333) , Cha Cha food, Jiangsu Hengrui Medicine Co.Ltd(600276) , Shandong Sinocera Functional Material Co.Ltd(300285) were also reduced, while Iray Technology Company Limited(688301) , Shenzhen Sunlord Electronics Co.Ltd(002138) , etc. were slightly increased.
Screenshot source: Morningstar official website
The management scale of the fund is relatively small, but from its position dynamics, we can see the position views of foreign giants such as Schroeder.
According to the data on Schroder’s official website, as of December 31, 2021, the total asset management scale managed by Schroder group for customers worldwide reached US $999.9 billion, equivalent to about US $6.31 trillion.
Schroeder’s latest view said that the previous supply chain interruption caused by covid-19 pneumonia has plunged the global economy into “stagflation”, and the situation in Russia and Ukraine has exacerbated this trend. In addition to raising inflation expectations, Schroeder also lowered his expectations for global economic growth in 2022. Schroeder expects that the current economic growth may slow down further and inflation may remain high for a long time.
In addition, other risks of the global economy can not be ignored. Schroeder said that the supply bottleneck hinders consumer spending. In many regions, there is a shortage of large commodities such as cars, and residents’ travel is still limited. This may add destabilizing factors to the economic environment, and economic activities may gradually decrease until the supply side can respond accordingly.
overseas giants are optimistic about China’s stock market
Affected by the conflict between Russia and Ukraine, the rise in commodity prices, the delisting risk faced by Chinese companies in the United States, the Federal Reserve began to raise interest rates and other factors, A-Shares and Hong Kong shares have fluctuated greatly recently.
A share and new energy such as track stock and Baijiu continued to fall, affecting market sentiment. Hong Kong stock Hang Seng technology index hit back in mid March, but it was in a downturn.
In this regard, Shi bin, head of UBS asset management China equities, expressed his view that the attractive long-term trend of the Chinese market still exists. He has confidence in the Chinese stock market and needs more patience at present.
Shi Bin said that one of the reasons why he is optimistic about China’s stock market is that the government has strengthened policies and measures to stabilize growth. The GDP growth target for 2022 is 5.5%, higher than market expectations. At present, the valuation of China’s stock market has reached an attractive level, and we will continue to pay attention to the fundamentals, a long-term element of investment.
Shi bin believes that investing in high-quality Chinese companies will bring long-term strong returns to patient investors. Many high-quality companies in China have a good performance of long-term growth, and have proved that they are resilient when the market environment changes. In addition, the long-term trends that make the Chinese market attractive still exist, such as the long-term trends of striving to make the economy follow the service-oriented endogenous growth track, increasing health care expenditure, realizing automation and digitization, and transforming to green energy and clean environment. At the same time, the relatively low investment allocation of international investors to China’s stock market will bring many opportunities for active investors.
Shi Bin said that it is particularly important to identify high-quality companies that can maintain growth for many years, and when the market fluctuates, it also provides an excellent opportunity for investors to buy such high-quality companies. Understanding China’s overall objectives and their potential impact on different industries and companies has also become an increasingly important stock selection factor.
Andrew McCaffery, global chief investment officer of Fidelity International, believes that one of the severe challenges facing the Chinese market recently is the resurgence of covid-19 epidemic and the uncertainty brought by a series of control measures in China. Investors need to consider the impact of these factors.
At the same time, the challenge faced by zhonggai shares is whether these listed companies will eventually choose to delist from the United States and list in Hong Kong. Although this is actually a problem related to liquidity conversion, because it happens to happen in the current highly volatile market situation, the collection of these events has triggered the fermentation of concerns in the market and caused the losses of some investors.
“Despite the changes in the external environment, China still pays more attention to its goal of continuing reform, achieving common prosperity and sustained and steady growth. Even if tail risks occur from time to time, China is still committed to ensuring the stable operation of its capital market and providing a good environment for its economic development.” Andrew McCaffery said.
