You panic, I’m greedy, smart, and the more money goes down, the more money you buy.
On Monday (April 25), all four major indexes of China’s A-Shares fell sharply, of which the Representative Shanghai index fell more than 5%, falling below the 3000 point mark. As a wind vane of institutional investment, the stock exchange open-end Index Fund (ETF) bucked the trend to obtain a net inflow of more than 11 billion funds in a single day, and the bottom reading funds were very turbulent.
In the continuous adjustment of the market since April, off-site funds have entered the market continuously, and it is estimated that nearly 49 billion funds have entered the market through stock ETF. Among them, broad-based ETFs such as CSI 300etf, SSE 50ETF, Kechuang 50ETF and gem have become the objects of active bottom reading. Narrow Based Indexes in some industries, including cycle ETF and chip ETF, are also favored by funds.
The public offering industry said that the influx of bottom reading funds took the opportunity to show the rationality of the low-level layout. In the face of internal and external challenges, it is expected that more powerful policies will be introduced in the future, which will be helpful to boost market confidence. Investors may wish to take the way of entering the market in batches and setting the investment of funds to disperse the timing risk and low-level layout.
single day large-scale net purchase of RMB 11.2 billion
large cap wide base ETF attracts the most gold
A shares fell sharply on Monday, and the enthusiasm of “bottom reading” funds to layout the market through ETF funds was high.
According to the data, as of the closing on April 25, among the 619 stock ETF products in the whole market (statistical stock ETF and cross-border ETF), the net inflow on the first trading day of this week was 11.24 billion yuan. Among them, the wide base has once again become the main force of gold absorption, and some industries such as securities companies and dividends and strategic narrow base indexes are also favored by funds.
Specifically, in the market adjustment on Monday, the CSI 300etf under Huatai Bairui fund became the single product with the largest increase in share in a single day, with a net subscription of 898 million copies on that day.
Based on the average price of 3.9 yuan on April 25, CSI 300 ETF received a net inflow of 3.501 billion yuan in a single trading day, becoming the most turbulent stock ETF against the market On Monday, the ETF fell 4.82% on the floor against the background that the CSI 300 index fell 4.94%.
Similarly, the Shanghai 50 index fell 4.64% on Monday, and the Shanghai 50ETF of Huaxia Fund fell 4.75%. However, the fund followed the Shanghai and Shenzhen 300etf and received 539 million net subscriptions on Monday, with a net inflow of 1.465 billion yuan. By calculation, the ETFs of these two broad-based indexes alone received nearly 5 billion yuan of capital to increase their positions in one day.
Secondly, China Southern Securities 500etf and Huaxia Hushen 300etf are also broad-based leading products favored by funds, with a net inflow of more than 500 million yuan on Monday. In addition, harvest CSI 300etf also received a net subscription of 464 million yuan.
In addition to broad-based ETFs, medium and small cap style ETFs such as gem ETF and Kechuang 50ETF, which have suffered a large decline recently, have also been net bought by funds against the market. For example, the 50 ETF of Huaxia Shanghai Stock Exchange science and technology innovation board received a net inflow of 360 million yuan, and the e-fund gem ETF attracted more than 200 million yuan in a single day.
As for the narrow base index, in the industry index, the ETF of securities companies is sought after. Cathay Pacific China Securities refers to the net inflow of ETF of securities companies of 385 million yuan, and Huabao China Securities refers to the net inflow of ETF of securities companies of 209 million yuan.
In the market adjustment on Monday, the outstanding cyclical ETFs this year also ranked in the forefront of net capital purchase. The net inflow of China Thailand China Securities coal ETF was 200 million yuan, the net inflow of Huabao China Securities bank ETF was 186 million yuan, the net inflow of China Southern Securities all refers to real estate ETF was 834 million yuan, and GF China Securities infrastructure project ETF attracted 139 million yuan per day.
In the strategy index, dividend ETF and growth ETF also received net inflows of funds. Huatai Bairui dividend ETF fell by more than 4% on the floor on Monday, attracting a net purchase of 386 million yuan.
On the other hand, in terms of the net outflow direction of funds, 99 funds encountered net sales, but the sales volume was relatively small. Among them, photovoltaic ETF, new energy vehicle ETF, innovative drug ETF and other industry index products, the net outflow of funds ranked first. GF China Securities Co., Ltd., which has the largest net outflow of funds in a single day, all refers to financial real estate ETFs, and only 162 million yuan was sold, which is relatively at a low level of capital outflow.
For the capital flow of stock ETF on the day of sharp decline, a person from the investment department of a public offering index in Shenzhen said that the application and redemption of ETF is usually regarded as an investment weathervane. The overall flow of funds into stock ETF represents that the funds are optimistic about the future market, or judge that there will be a rise after the release of market risk. The broad-based ETF is mainly held by institutional investors, and its application and redemption trend can better reflect the attitude of institutions.
“With the acceleration of sector rotation, the characteristics of ‘high selling and low absorption’ of funds in the industry themed ETF market are becoming more and more obvious. In the area where the industry index is undervalued, investors generally buy more and more by buying or fixed investment, accumulating chips; and with the rebound and rise of the index, they will gradually cash in their earnings in the process of rising and fall into their pockets.” He said.
since 4 months, 49 billion funds have entered the site through ETF to copy the bottom
“crazy buying” wide base ETF
Since the second quarter, ETF has been actively adjusting the market for a long time. Statistics show that as of April 25, nearly 49 billion funds have net flowed into stock ETFs since April, and the “bottom reading” funds are very turbulent.
Broad based ETFs such as CSI 300etf, SSE 50ETF, Kechuang 50ETF and gem ETF have become the objects of active bottom reading, with a total net inflow of more than 20 billion yuan.
Specific to a single product, 12 ETF funds have received a net inflow of more than 1 billion funds in the accelerated decline of the market since April, including 7 broad-based ETFs.
Huatai Bairui CSI 300 ETF still ranks first in the gold absorption list. Since April, the exchange price of the ETF fund has fallen by more than 10%. During this period, it gained a net purchase of 8.356 billion yuan against the trend. The share of Huaxia Shanghai Stock Exchange 50ETF increased by 1.936 billion in the same period. According to the interval transaction price, there was a net capital inflow of about 5.517 billion yuan. The net inflows of CSI ETF and CSI ETF were 300.6 billion and 50.9 billion respectively.
It is worth mentioning that, compared with the absolute advantage of the broad-based index in the list of net capital inflows on April 25, the trend of net capital inflows of small and medium-sized leading products such as Kechuang 50 and gem has been more obvious since April.
Among them, Huaxia Shanghai Securities technology innovation board 50 ETF received 3.531 billion net subscription funds, which was the stock ETF with the largest net increase in share in the same period With the increase of share, there was a net inflow of about 3.642 billion yuan.
E fund gem ETF received a net purchase of funds, followed by 2.172 billion yuan since the second quarter; Huaan growth enterprise market 50ETF also has no inferior gold absorption capacity, with a positive net inflow of 2.086 billion yuan.
From the perspective of holder structure, the annual report data of the fund in 2021 shows that the proportion of institutional investors in e fund gem ETF and Hua’an gem 50ETF is 65.79% and 44.77% respectively, and their trend represents the views of institutional investors to a certain extent.
In the narrow base index, funds also continued to “buy and buy”. This year, cyclical funds such as infrastructure 50ETF and steel ETF with excellent performance also ranked in the forefront of net capital purchase in the recent A-share adjustment, and received a net subscription of more than 1 billion funds in less than a month. In addition, southern China Securities all refer to real estate ETF and GF China Securities media ETF are also favored by funds.
Industry ETFs that track the relevant indexes of the semiconductor sector have obtained “bottom reading” funds against the trend. For example, the net inflow of Huaxia Guozheng semiconductor chip ETF is 1.109 billion yuan. The net purchase funds of Guolian Anzhong securities all index semiconductor ETF and Cathay Pacific CES semiconductor chip ETF also ranked among the top.
In fact, although the chip and semiconductor sectors have continued to adjust since the beginning of the year, the off-site funds are entering the market continuously. At present, there are 8 ETF tracking chips and semiconductor sectors in the two cities. Since the beginning of the year, the share of 8 ETFs in the market has increased.
Some market analysts said that there are a large number of individual stocks in the chip sector. If investors are not familiar with individual stocks, but are optimistic about the market of the chip sector, they can disperse individual stock risks through ETF.
As a cross-border ETF, GF NASDAQ 100ETF has also become the focus of recent capital layout, with a strong “gold absorption” of more than 1 billion yuan since April.
In terms of net outflow of funds, photovoltaic ETF, new energy vehicle ETF, home appliance ETF, wine ETF and net outflow of funds with large recent decline ranked first. However, since April, only more than 170 of the more than 600 stock ETFs have experienced net sales, and the total sales amount is only about 5 billion yuan, indicating that the general trend of “falling and buying” has not changed.
People in the industry say that ETF has attracted much attention. For the continuous net subscription of ETFs, a public funder in Shanghai said that institutional funds have the characteristics of long-term and large amount of funds. They usually use the wide-based ETFs with good liquidity to copy the bottom, while investors tend to make strategic allocation in the layout of wide-based ETFs as an important way of long-term layout.
“buy lower, buy more lower”
below 3000 points is the suitable time for fixed investment
Historical cases show that most of the successful investors have strong reverse thinking ability. When the market fell below 3000 points, a number of institutions and public funders also said that it was a rare layout opportunity for Jimin.
Participating in fund investment through fixed investment at the relative bottom of the market and buying positions in batches can disperse the holding cost and help investors accumulate more cheap chips at the relative bottom of the market.
JPMorgan Fund said that looking forward to the future, the time for the market to grind the bottom may be longer than expected, but historical experience shows that once the risk sentiment is repaired, there will often be a certain rebound opportunity. There is no lack of targets wrongly killed due to sentiment in the general decline, which may be the first to recover.
Ni Quansheng, fund manager of Shanghai Investment Morgan fund, pointed out that “from the perspective of the whole market, the standard deviation of the current quantile (the ratio of the index to the risk-free interest rate) is less than twice. The last time this extreme value occurred was at the bottom of the market in 2018.”
He said that from the perspective of cycle theory, when the market valuation, liquidity and sentiment are at the freezing point, it is often a more suitable time point to increase the holdings of funds. Of course, if investors still have concerns, they might as well adopt the way of fixed investment of the fund.
China Europe Fund said that if it starts from falling below 3000 points and waits for the next rise back to 3000 points, it may just be a “perfect fixed investment smile curve”.
Note: the smile curve is formed only under the specific market conditions of falling first and rising later. The picture is for reference only and does not predict future performance.
The China Europe Fund makes the fixed investment calculation based on the above four times of falling below 3000 points – returning to 3000 points:
(data source: wind, the fixed bid is the Shanghai stock index, the fixed bid adopts the monthly fixed bid method, and the starting date is the first fixed investment deduction date. Fixed investment yield = [sum (fixed investment amount of each period / net value of each period) (net value at the end of the period – net value at the beginning of each period)] / (fixed investment amount of each period number of investment periods). The above fixed investment calculation is only an example, and the simulation data does not represent the actual income. The above compound annual average rate of return is: 31.64%, 11.32%, 7.50% and 16.88%)
Two points can be found:
First, even under the seemingly bad 3000 point fixed investment, if investors can overcome their fear during the market decline and persist until the market returns to 3000 point, the total return of fixed investment is higher than that of one-time investment.
Second, compared with one-time investment, those who adhere to fixed investment have a faster return time.
Looking back on history, we only need to slightly lengthen the investment time to know that there is no absolute positive correlation between the market position and the fund return. As long as we lengthen the holding time, even if there is a decline or bear market during the period, good funds still have the opportunity to obtain good returns.
Huaxia Fund also said that fixed investment can effectively deal with shocks and falling prices, and it is necessary to adhere to fixed investment below 3000 points. Fixed investment is not afraid of falling, but can effectively deal with the falling market.
Because in principle, fixed investment income = (current price – average cost of position) holding fund shares. If you can insist on buying in the process of decline, you can collect cheaper chips and continuously reduce your position cost. When the market improves and the net value of the fund rises to more than our cost, you can turn losses into profits.
A very important point is that because our cost is continuously reduced due to the low fixed investment, we don’t need the market to rise to the original initial position to make a profit.
For example, Huaxia Fund said that if Jimin a fixed investment of 100 yuan x fund per month, as a result, X fund withdrew rapidly, and the net value fell from 1 yuan to 0.6 yuan in three months. However, due to his insistence on fixed investment, the current breakeven point has reached 0.77 yuan. If you want to recover the capital, you don’t need to repair the net value of the fund to 1 yuan. If the net value of the fund rises back to 1 yuan, its fixed investment yield can reach 1 / 0.77-1 = 29.9%.
Source: Huaxia Fund
What if we practice “buy more at a lower price and buy more at a lower price”? Because the fixed investment is increased at the low level, the cost of Jimin A’s position can be diluted lower, and the net value of the fund can turn loss into profit by returning to 0.69 yuan. If the net value of the fund rises back to 1 yuan, the fixed investment yield of the mining base can reach 1 / 0.69-1 = 44.9%.
financial market fluctuations
central bank’s latest voice
On April 26, the relevant person in charge of the people’s Bank of China was interviewed by the financial times on the current financial market situation
Q: there have been fluctuations in the financial market recently. What’s your comment?
A: we are concerned about some recent fluctuations in the financial market, which are mainly affected by investors’ expectations and emotions. At present, China’s economic fundamentals are sound, the potential for endogenous economic growth is huge, and substantial progress has been made in preventing and resolving financial risks. The financial system implements the decisions and arrangements of the CPC Central Committee and the State Council, coordinates the epidemic prevention and control and economic and social development, supports smooth logistics and promotes the stability of the industrial chain and supply chain, and minimizes the impact of the epidemic on economic and social development. In accordance with the principles of marketization, legalization and internationalization, we will steadily promote and complete the rectification of large platform companies as soon as possible, so as to promote the healthy development of platform economy. The people’s Bank of China will strengthen the support of prudent monetary policies to the real economy, especially support industries seriously affected by the epidemic, small, medium-sized and micro enterprises and individual industrial and commercial households, support agricultural production and energy supply and increase supply, launch scientific and technological innovation refinancing and special refinancing for inclusive elderly care, increase RMB 100 billion refinancing, support the development and use of coal and enhance energy storage, and increase small refinancing for agriculture and special refinancing for civil aviation, Maintain reasonable and sufficient liquidity, promote the healthy and stable development of the financial market, and create a good monetary and financial environment.
Today, A-Shares and Hong Kong shares opened, with the main indexes red. Among them, Hong Kong stocks rebounded significantly, Hang Seng technology index rose 3.4%, and technology stocks such as jd.com and meituan rebounded sharply.
