Fund Managers Often Deviate From Fund Contracts And Become "Empty Checks"

On March 4, all kinds of "Mao" with a market value of more than 100 billion yuan in the market continued to plummet. Among them, Longji shares, a leading photovoltaic company, fell by 9.17%, Luzhou Laojiao fell by 7.55%, golden dragon fish "Youmao" fell by 7.44%, and Guizhou Maotai, as a group index stock, also fell by 5%.

At the same time, high-quality stocks in small and medium-sized market value, represented by rare earth and military industry, rose across the board, and the market reappeared the seesaw effect.

According to the statistics of 21st century economic report, some small and medium-sized funds with small market value and good liquidity in A-share market have a good trend in recent months. For example, Jingshun Great Wall medium and small cap rose by 6.37% and Jinying small and medium cap rose by 6.21%. However, there are also small and medium-sized stocks invested in Morgan and e-fund that have a monthly decline of more than 7%.

"Although some high-quality small and medium-sized stocks have performed well in recent years, blue chips such as Guizhou Maotai, Luzhou Laojiao and Gree Electric Appliances account for more than half of the heavy positions of some small and medium-sized funds." Some fund analysts believe that this kind of off topic small and medium-sized growth funds exacerbate the "group effect" of investment, and then increase market volatility.

Small and medium-sized landscape rising

Silent for a long time, small and medium-sized stocks began to perform eye-catching.

As of March 3, the scale of China Southern Securities 1000etf, which represents small market value stocks, has increased by 68% compared with that before the festival, and the scale is close to 700 million; the transaction volume is obviously active, with an average daily turnover of more than 110 million yuan, an increase of 116% compared with the two weeks before the festival.

According to the official website of CSI, the CSI 1000 index is composed of 1000 stocks with small size and good liquidity after excluding the constituent stocks of CSI 800 index, which comprehensively reflects the stock price performance of a group of small market value companies in China's A-share market.

From the market value distribution, the index component stocks are mainly small cap stocks, accounting for 77.13% of the weight. In terms of industry distribution, information technology, industry, materials and health care account for more than 76% of the total weight. The index focuses on the industries with high technology content as a whole, and has growth potential.

On March 4, Huaxia Fund also took advantage of the situation to issue China Securities 1000etf. Huaxia Fund believes that the current valuation of the CSI 1000 index is cost-effective. The current price earnings ratio of the index is about 40 times, and the price to net ratio is 2.58 times, both lower than the historical average and median.

Small and medium-sized stocks are also favored by institutions.

According to choice data, after the Spring Festival, fund companies have 1403 research records involving 110 listed companies.

From the perspective of market value, 110 companies investigated by fund companies after the festival are mainly small and medium-sized stocks. Specifically, there are 95 companies with a market value less than 50 billion, including 85 companies under 30 billion.

In this regard, Guoxin Securities Zhu Chengcheng said that there is a great possibility of style switching in 2021 in the A-share market. "Since 2016, the A-share market is a significant dominant style of large cap stocks. In the case of the current market differentiation to the extreme, there is a strong possibility of style switching in the future market. From the historical experience of stock markets in the world, the style rotation of large and small markets is normal. There are many similarities between the beautiful 50 market of the United States in the 1970s and the current A-share group. In the post beautiful 50 era, US stocks have gone out of the longest and largest round of small cap stocks in history. "

E fund also said that the rapid rise in interest rates has led to a significant shift in the style of equity markets at home and abroad, with small and medium-sized markets and value styles starting to outperform the market and growth style, and the market width is spreading. Some deep value funds with poor performance in the early stage began to move along with the change of stock market style. Looking forward to the future, the macro environment is conducive to the pro cyclical plate and value style. The equity portfolio needs to make a positive response, and the portfolio allocation is more cyclical and value style.

Small and medium sized fund trend divergence

Small and medium-sized stocks rebounded, but the trend of small and medium-sized growth theme funds is not satisfactory.

In the past month, funds such as Jingshun Great Wall medium and small cap, Golden Eagle small and medium cap, HSBC Jinxin small and medium cap, Jingshun Zhongzheng 500 and southern China Securities 500 have performed well, with an increase of more than 6%.

However, the trend of theme funds such as small and medium-sized stocks of Morgan and e-fund is not good, with a week withdrawal of more than 7%.

According to the public information, as of December 31, 2020, the top ten heavy positions of Shanghai Investment Morgan's medium and small cap stocks were Changchun hi tech, Weiwei Co., Ltd., China Immunity Group Co., Ltd., Yao Ming Kant Co., Ltd., Luzhou Laojiao, Wuliangye, Yiwei lithium energy, Huayou Co., Ltd., and Lixun precision; the top ten heavy positions of e-fund in medium and small cap were Guizhou Maotai, Yanghe shares, Luzhou Laojiao, Wuliangye, Tongce medical and the United States Health, Supor, Shanghai airport, Yutong Bus, Tiantan biology.

In the top ten positions of these two funds, blue chips account for a large proportion. For example, among the top 10 stocks invested in the small and medium-sized stocks of Morgan, except that the total market value of Huayou cobalt is slightly lower, which is 98.6 billion yuan, the rest are large cap stocks with a market value of 100 billion yuan. Among them, the market value of China's CMAC is as high as 600 billion yuan, and the total market value of YaoMing Kant is more than 300 billion yuan.

E fund as a small and medium cap investment direction of the fund, but also the main heavy positions in large cap stocks. The market value of Guizhou Maotai, Yanghe shares, Luzhou Laojiao and Wuliangye accounted for nearly 40% of the net fund value.

After reading the prospectus of e fund's medium and small cap companies, we find that the fund's investment goal is to seek long-term appreciation of fund assets by investing in small and medium-sized stocks with competitive advantages and high growth potential under the premise of effective risk control.

The scope of investment is financial instruments with good liquidity. Stock assets account for 60% - 95% of the fund assets. Bonds, asset-backed securities, warrants, money market instruments and other securities allowed by the CSRC account for 5% - 40% of the fund assets. It is emphasized that the assets of small cap stocks in fund investment shall not be less than 80% of stock assets.

The prospectus also has a clear definition of small and medium-sized stocks. At the end of each quarter, fund managers rank the stocks in China's A-share market from small to large according to the circulating market value. The stocks whose cumulative circulating market value accounts for 2 / 3 of the total circulating market value of a shares are called medium and small cap stocks.

According to the data of the fourth quarter, e-fund holds more than 20% of the large cap stocks in the small and medium cap.

"From the perspective of the past few years, the growth rate or robustness of leading companies is significantly better than that of the same industry, brand premium, industry status or market share have continued to increase, and valuation has also opened a significant gap." Some people in Guangzhou fund companies believe that core assets enjoy a high valuation, which makes the market convergence, the Matthew effect of the industry is obvious, and the investment style of some funds begins to shift.

Frequent occurrence of theme deviation funds

It is not unreasonable for fund managers to pursue excess returns, but the behavior of violating contracts should be paid attention to.

In the small and medium Cap Fund Prospectus of Shanghai Investment Morgan, it clearly puts forward that the fund will invest no less than 80% of the stock assets in the small and medium cap stocks. But in the fourth quarter of the heavy warehouse stocks, Wuliangye, China immune, Yao Ming Kant and other large cap stocks accounted for a large proportion.

Statistics show that by the end of the fourth quarter of 2020, 1322 funds held heavy positions in Maotai, Guizhou, with a market value of 166.2 billion yuan. At the same time, in the fourth quarter of 2020, the fund increased its holdings of Guizhou Maotai by 53.9 billion yuan.

Looking at the institutional investors in Maotai, Guizhou, it is not difficult to find that there are a variety of theme funds heavily invested in Maotai, such as huitianfu mid cap value selection, GF Dongcai big data and Ping An low carbon economy hybrid funds.

However, the recent continuous decline of liquor sector, Guizhou Maotai has fallen by more than 20%, which has also increased the withdrawal of some public funds held by heavy positions. For example, the small and medium cap of e-fund dropped by 10.76% in recent January, ranking lower in similar funds.

"The fund investment style of the whole market is too concentrated. When the market is good, it will rise collectively, but when the market is not good, the style convergence will increase the fluctuation of the market." According to a fund investment director in South China, fund managers who have done better in the industry tend to mine stocks with real performance growth, and it is difficult to distinguish what investment style is. Moreover, different products managed by the same fund manager may be partial to the small and medium-sized market, or to the large market. Therefore, the clarity and refinement of fund contracts may weaken the convergent investment style 。