In the first quarter, the storm in the A-share market intensified, which is undoubtedly a great test for the “fixed income +” products that rely on equity assets to enhance portfolio income in the past year.
According to the latest quarterly report, some “fixed income +” funds adopted the strategy of reducing their positions, and some funds actively adjusted their position structure in the first quarter, increased the proportion of Pro cyclical industries such as finance and real estate, and achieved positive returns against the trend.
In the face of the stock market with increased volatility, the position building speed of the sub new “fixed income +” fund established in the last half of the year is obviously differentiated. The equity position of some funds has increased to 45% after about four months of establishment, and some funds still maintain zero equity position operation.
Looking forward to the future at the current time point, many fund managers believe that the opportunity of interest rate debt is still relatively limited. In contrast, the current A-share policy bottom and emotional bottom basically appear, and the equity risk premium has been in the historical 90% quantile, so we should not be overly pessimistic about the equity market.
Blue Chip Fund increased its holdings of Pro cyclical assets such as energy and finance in the first quarter
some “fixed income +” funds reduce positions and avoid risks
In the first quarter, A-Shares fell sharply. Among the main stock indexes, the CSI 300 index fell 14.53%, and the gem index fell 19.96%. The bond market also suffered twists and turns. The yield of ten-year Treasury bonds fluctuated and leveled. The convertible bond index fell 8.36% in a single quarter due to the sharp adjustment of the stock market.
The sudden changes in the market tested the asset allocation ability of “fixed income +” fund managers. From the performance of the first quarter, among the partial debt hybrid and secondary bond funds established for three months, nearly 70 products maintained positive returns. Among them, the net value of Anxin people increased steadily by 6.12% in the first quarter, and Anxin held steadily for one year, Anxin balanced increased profits, Jingshun Great Wall Anxin returns The first quarter earnings of four funds of China Merchants Ruiyi also exceeded 3%. The first quarterly report also revealed the investment operation of these “fixed income +” blue chip funds.
Zhang Yifei, manager of Anxin minwen steady growth fund, recalled in the first quarterly report that in terms of pure debt, the duration strategy has always maintained the allocation of medium and short duration, and is still cautious about the interest rate direction in the later stage. In terms of credit strategy, we always adhere to the strategy of high grade and high liquidity. In terms of convertible bonds, in the early quarter of the first quarter, with the rise of the market, it reduced its holdings of some overvalued varieties and appropriately turned to some partial debt varieties. At the end of the first quarter, the convertible bond market was also affected by the significant decline, but the impact was relatively controllable. Equity positions are mainly in energy, real estate, finance, household appliance consumption, building materials, chemical manufacturing and other sectors. During this period, there was a large retreat, but on the whole, the trend in the first quarter is good.
According to the first quarterly report, Anxin’s steady growth reduced its holdings of Shaanxi Coal Industry Company Limited(601225) , China Shenhua Energy Company Limited(601088) and other coal stocks in the first quarter. Among the top ten heavy warehouse stocks, new infrastructure and household appliance stocks such as Anhui Conch Cement Company Limited(600585) , Midea Group Co.Ltd(000333) were added.
Zhang Qinghua, manager of yifangda Yuexing one-year holding hybrid fund, also said in the quarterly report that the stock portfolio maintained neutral and high position operation in the first quarter, and the position changed little, but the position structure was adjusted, which reduced the proportion of photovoltaic, pharmaceutical, food and beverage industries, increased the proportion of Finance and other pro cyclical industries, and the configuration was more balanced.
In the first quarterly report of Dacheng exclusive 18 month fixed fund, it was mentioned that in the first quarter, it increased its positions in coal, banks, real estate and shipping in terms of equity investment and reduced its positions related to new energy.
In addition, fund managers tended to reduce positions and avoid risks in the first quarter. China Merchants Ruize’s one-year holding position in hybrid fund stocks decreased from 12.95% at the end of the fourth quarter to 3.63% at the end of the first quarter. In this regard, the fund explained in the quarterly report, “In the first quarter of this year, the macro environment deteriorated further, the international Russian Ukrainian conflict and the Chinese epidemic raged, and the stock market fluctuated sharply, especially the growth stocks fell greatly. Our portfolio also suffered a relatively large impact. In order to control the risk and retreat, we reduced the equity risk exposure and optimized the varieties.”
times of new fund position building rhythm differentiation
equity positions differ by 45 percentage points from beginning to end
In the face of the complex and changeable market, some sub new funds focus on medium and long-term investment opportunities and “buy more and more when the market falls”, while some sub new funds adhere to the principle of “stability first”, maintain low positions and continue to wait for the opportunity to build positions.
According to the data of the first quarterly report, the equity position of Anxin balanced profit increasing fund, which was established on December 10 last year, had reached 45.50% by the end of the first quarter of this year, and the market value of convertible bonds accounted for 32.03% of the net asset value of the fund, while the stock investment proportion agreed in the fund contract was 15% – 65%. It can be said that a high proportion of equity investment has been reached in the first quarter.
At the beginning of December last year, Ruiyuan Wenjin configuration, a “hot money” fund that sold hundreds of billions on a single day, disclosed its quarterly report for the first time. The data showed that the equity position of the fund reached 32.34% at the end of the first quarter, and the convertible bond position also reached 6.34%. Rao Gang, the fund manager, said in the quarterly report that during the reporting period, the fund gradually built positions and maintained relatively high equity positions, and the allocation proportion of Hong Kong stocks was also at a high level within the range agreed in the contract. In terms of position style, value stocks with low valuation and relatively stable competition pattern are mainly configured. The relative return of these positions in the first quarter is obvious and has achieved certain absolute return. However, due to the large short-term withdrawal of some consumption and manufacturing companies, it has a certain drag on the overall portfolio net value; In terms of convertible bonds, with the gradual reduction of the premium rate of convertible bonds caused by the market downturn, the fund gradually built up positions and mainly held undervalued large-scale convertible bonds, and the overall position is still low; In terms of pure debt, interest rate debt and high-grade credit debt are mainly allocated, and the duration remains neutral.
Established at the end of January this year, SDIC UBS Aetna has also been more active in building positions, and its stock position has reached 26.01% in only about two months. “At the beginning of the establishment of the fund, we only had single digit stock positions, but the sharp decline in the market in mid January still damaged the net value. In late January, with the market decline, we gradually increased our stock positions and gradually reduced our stock positions in late February. After the sharp decline in the market in March, we gradually increased our stock positions. Based on our caution about convertible bonds, we did not allocate convertible bonds.” The fund also reviewed the investment operation in detail in the quarterly report.
CAITONG asset management xinjuyi six-month holding hybrid fund was established on December 24 last year. As of the end of the first quarter, the stock position was zero. “In the second quarter, the portfolio will continue to maintain the operation of low equity positions, and strictly control the withdrawal of products during the period of accumulating safety cushion.” Fund managers said they would continue to maintain a slow rate of position building in the coming months.
At present, the stock position of the financing steady profit increasing six-month holding hybrid fund established at the end of January this year is less than 3.5 percentage points. In the quarterly report, the fund manager said that the stock fell sharply at the beginning of the year, and the stop loss operation was carried out accordingly. In the later stage, the fund manager kept a low position and waited for a clearer opportunity.
Haiying fund of Donghai securities, which has been established for more than three months, had an equity position of only 0.31% at the end of the first quarter. The quarterly report of the fund also said that this product completed the position building of bonds, maintained the operation of low stock position, and the allocation direction was mainly white horse large cap stocks.
blue chip equity assets enter the allocation value range
bond market odds are no longer dominant
Turning to the current investment value of various types of assets, many fund managers said that the performance price ratio of the bond market is still insufficient. Relatively speaking, the risk of equity assets has been released to a certain extent, and some blue chip assets have entered a higher allocation value range.
E fund manager Lin Sen said frankly that from a fundamental point of view, we should not be pessimistic at this time. “Although the scope of the epidemic has exceeded our initial expectations, we believe that the epidemic will eventually be brought under control. Most of the manufacturing enterprises invested in this portfolio will make up for the disturbance of shutdown caused by the short-term epidemic through more active production scheduling. In the long run, neither the epidemic nor geopolitics will change the long-term trend of increasing the proportion of China’s manufacturing industry in the global supply chain. Another factor that suppressed manufacturing enterprises in the first quarter is the cost side A sharp rise. Since March, due to the hawkish monetary policy of the Federal Reserve, the overall price of global commodities has declined to a certain extent. At the same time, a strong dollar is conducive to enhancing the global competitiveness of Chinese manufacturing enterprises. Overall, we believe that the most difficult time for Pan manufacturing is over. “
Rao Gang, manager of Ruiyuan steady progress allocation fund, said that at the top-down level, the Fed’s interest rate hike and the conflict between Russia and Ukraine are still the external sources of market uncertainty in the second quarter. However, with the gradual return of the valuation level of A-share and Hong Kong stock markets to the reasonably low region, the change of good risk may show more characteristics of “self dominated”, and the Chinese factor will be the core contradiction of the Chinese market in the second quarter. Although the short-term “dynamic clearing” epidemic prevention measures will lead to a certain time lag in the implementation effect of some “stable growth” policies, the verification of the effect of stable growth under the bottom line thinking still needs to be patient and confident. He said that the managed funds will strictly abide by the cost performance and gradually layout the varieties with large growth space and reasonable or even undervalued valuation in the next 2-3 years as the underlying assets through cattle and bears.
Huang Xing, manager of Wells Fargo Tianxing fund, said that in the next stage, due to the superposition of foreign factors, the downward pressure on China’s economy is still large. Under the demand of stable growth, it is expected that the broad monetary policy is expected to be further implemented to provide support for interest rate bonds. However, due to the tight overseas monetary environment and the embodiment of the cumulative effect of the broad credit policy of stable growth, the performance space of interest rate bonds will also be relatively limited; The overall interest rate of credit bonds will fluctuate with interest rate bonds, but weak credit bonds still face greater credit risk in the process of economic downturn. At the level of equity assets, after the significant adjustment since this year, the risk of equity assets has been released to a certain extent, and the main indexes and many blue chip assets have entered the high allocation value range. However, it is difficult to accurately predict the trend and sustainable impact due to factors such as geographical situation and epidemic situation. In the case of uncertainty, it is expected that the market risk preference will still operate at a low level to wait for the clarity of the situation. After adjustment, the allocation value of low price and low premium varieties of convertible bonds is higher.
Yin Peijun of Huafu yield enhancement bond pointed out that looking forward to the second quarter, the main central banks will accelerate the tightening of monetary policy, and the increasing sanctions under the conflict between Russia and Ukraine will further disrupt the global financial and trade markets. The global economic recovery will face great difficulties, and the downward pressure on the economy is still great. It is expected that the probability of further interest rate reduction in the second quarter will be greatly affected by the introduction of policies and financial support, and the possibility of further interest rate reduction in the second quarter may still be greatly affected by the impact of the epidemic in China. China’s economy is expected to bottom out and rebound.
In his view, the bond market as a whole still has a good winning rate, but the odds are no longer dominant. In terms of equity and convertible bond market, under the four pressures of stagflation, geopolitical conflict, tightening of overseas currency and China’s epidemic, the risk is gradually in the price in of A-share assets, and the stock odds are gradually optimized. At present, the PE excluding finance, petroleum and petrochemical in the whole a is about 26x, which is in the historical 30% quantile, while the equity risk premium is already in the historical 90% quantile, which is very close to the level under the impact of the epidemic in March 2020, so the downward space is limited. At present, the bottom of A-share policy and mood have basically appeared. With the easing of risk aversion of overseas funds caused by the conflict between Russia and Ukraine and the gradual improvement of China’s epidemic situation, there is a certain room for repair in the equity market. From the second quarter, China’s steady growth policy has been gradually implemented and credit relief has been gradually realized. It is expected that there will be a profit bottom in the market in the second half of the year. As for the convertible bond market, with the adjustment of the equity market, the cost performance has returned to the upper edge of the reasonable range. Under the current environment of low interest rate and fixed income + asset shortage, the convertible bond has gradually entered the acceptable range. However, due to the low valuation cost performance, it is expected to be dominated by structural opportunities in the future. In the future, with the pressure of wide credit on interest rate, it is still necessary to be vigilant against the risk of valuation compression.
