returned from "vacation", A shares had a good start in the first week of May, and then started a tug-of-war again at 3,000 points. With the release of positive signals from the Politburo meeting before the holiday, the implementation of the Federal Reserve's interest rate hike, and the gradual improvement of the domestic COVID-19 epidemic, many institutions are optimistic about the recovery of the market outlook, believing that the value of A-share allocation is becoming prominent, and the market can be expected in May. .
Under the volatile market, the continuous fluctuations also give investors the opportunity to "adversely increase their positions" and accumulate high-quality chips. Wind data shows that as of May 6, the cumulative share of MSCI China A50 ETF (560050) is nearly 13 billion, and the fund size exceeds 10 billion yuan. It has become the largest index fund product currently tracking the MSCI China A50 Interconnect Index. (Data source: Wind)
A-share valuations have reached historical lows, and allocation values have highlighted
Since the beginning of this year, affected by multiple factors such as domestic and foreign economies, geopolitics, and the epidemic, the A-share market has continued to adjust. As of the end of April, the major stock indexes All experienced declines to varying degrees.
data shows that the current overall valuation of A-shares is at a historically low level and has medium and long-term allocation value. From the perspective of price-to-earnings ratio, the valuations of CSI 300, GEM Index, SZSE Component Index, SZSE Composite Index, Windquan A, A-share index, Shanghai Composite Index , Science and Technology Innovation 50 and other indexes are at historical lows ( Note 1). After the early correction of the MSCI China A50 Interconnection Index, the overall PE (TTM) has also fallen back to 10.59 times (as of May 6, 2022), and is at the 47% percentile in the past ten years and the 37% percentile level in the past five years. , the 4% quantile level in the past two years, is within a reasonable range of valuation, and has strong layout value. (Data source: Wind)
At the same time, factors that suppressed the market, such as the Federal Reserve's expected rate hikes, the domestic epidemic being controlled, and the financial reporting season settling down, have eased. Coupled with the continued policy efforts and other positive factors, industry insiders said that the market is expected to Step out of the gloom in stages and start the market restoration.
CITIC Securities pointed out that the improvement trend of this round of domestic epidemic situation is clear, the epidemic situation in Shanghai continues to improve steadily, and the resumption of work and production is gradual; after the Politburo meeting comprehensively set the tone, the policy has entered a period of accelerated implementation, and domestic macro data in April are expected to bottom out during the year. , there will be marginal improvement in May. Secondly, the Fed extreme tightening expectations have basically been realized, and the probability of subsequent tightening beyond expectations is low. The main reason for the depreciation of the RMB is the weakening of economic expectations, and the window for the greatest depreciation pressure has passed. Finally, after the extreme pessimism in the market has been fully released, profit expectations, index valuations, and institutional positions have all been fully revised downwards. The response to negative factors has been blunted, and the market has become more sensitive to positive signals. A-share mid-term recovery is approaching (Note 2 ).
CITIC Securities believes that the Shanghai Stock Index near 2900 points is this year’s gold pit. Taking into account factors such as China's economic steady growth logic is strengthening and U.S. inflation data seems to be reaching its peak, there is a high probability that the overall internal and external environment will improve in the next quarter. Strategically, we can gradually turn to optimism, and tactically, we should plan for dips, and point out that "the best opportunity this year is now (Note 3)."
Take the high-quality leader with one finger, and be a powerful tool for medium- and long-term investment in A-shares.
Every squat in the market Adjustments have accumulated energy and opened up space for the rise. For investors, it also means a good time to bend down to pick up chips and buy high-quality targets with "high quality and low price". MSCI China A50 ETF and its feeder fund is a product that meets the current needs of investors.
It is understood that the MSCI China A50 Interoperability Index adopts the compilation concept of "preferred leaders and balanced allocation" and adopts an industry-neutral approach in compilation. The index MSCI China A-Share Index, within the scope of interconnection, first selects the two stocks with the largest free floating market capitalization in 11 major industries, and then selects the 28 stocks with the largest free floating market capitalization in the remaining range until Index constituent stocks reach 50. The innovative compilation rules of
ensure that the index covers the leaders of various industries representing the Chinese economy, allowing international and domestic investors to track China's industry leaders, including high-quality stocks in key industry sectors.MSCI data shows that the regular adjustment of the index will take effect on March 1. The top ten constituent stocks are CATL, Kweichow Moutai , Longi Holdings , China Merchants Bank , Luxshare Precision , Wanhua Chemical , BYD , China Duty Free, Zijin Mining , Enjie Holdings , with a total weight of 46.1%. (Data source: MSCI, as of 2022/3/1, index constituent stocks do not represent individual stock recommendations)
On the basis of selecting leading companies, the index has achieved a relatively balanced industry allocation. Compared with the traditional broad base, the financial weight is reduced, while the weight reflecting the new economy and new industry direction is increased. The industry structure is closer to the overall position structure of institutional investors such as mainland investors.
Judging from the index performance, compared with ordinary stock funds, the MSCI China A50 Interconnect Index has an annualized return rate of 9.47% in the past five years, which is better than the stock fund index (7.66%). At the same time, the annualized volatility of the index in the past three, five, and seven years has been lower than that of most ordinary stock funds, further confirming that the risk-adjusted return performance of the MSCI China A50 Interconnect Index is better.
Source: Haitong Securities, "A New Chapter in the Internationalization Process of A-Shares—Analysis of Investment Value of Universal MSCI China A50 Connectivity ETF", 2022/3/11. The past performance of the index does not predict the future, nor does it represent the performance of the fund.
Fund managers of MSCI China A50 ETF and its feeder funds Wu Zhenxiang and Le Wuqiong believe that for now, what is relatively certain is the improvement of China's economic aggregate caused by steady growth. Therefore, what we are facing is a better time to invest in the equity market in the medium and long term. The MSCI China A50 ETF and its feeder funds that invest in A-share market high-quality assets in a balanced manner may be a relatively safe choice for the majority of investors. We also hope to be able to provide investors with Providing suitable medium and long-term investment tools now.
Note 1: Data source: Galaxy Securities , "A-share market valuations adjust to low levels, periodic market trends can be expected", 2022/5/4
Note 2: Data source: CITIC Securities, "The peak of internal and external suppression has passed, and active "Four Main Lines of Layout", 2022/5/8
Note 3: Source: CITIC Securities, "This year's golden pit is around 2900, low-level layout, win in Q3", 2022/4/26
Risk warning: Funds are risky , investment needs to be cautious. This information is only promotional material and does not serve as any legal document. The fund manager promises to manage and use the fund assets in accordance with the principles of good faith and diligence, but does not guarantee that the fund will be profitable, nor does it guarantee a minimum return. The operation time of my country's funds is short and cannot reflect all stages of stock market development. Any securities research reports or comments contained in this promotional material may not be forwarded in any form without the prior written permission of the issuing organization. The views or opinions in the relevant research reports are for reference only and do not constitute any investment advice or consultation, or any express or implied guarantee or commitment. Readers should carefully read or refer to the relevant views and opinions on their own. The past performance of the fund does not predict future performance. The performance of other funds managed by the fund manager and the past performance achieved by its investment personnel do not constitute a guarantee of fund performance. Investors should carefully read the "Fund Contract", "Prospectus" and "Product Information Summary" and other legal documents to learn more about product information. MSCI China A50 ETF and its feeder funds are issued and managed by China Universal Fund Management Co., Ltd. . The agency does not assume the responsibility for investment, redemption and risk management of the products. MSCI China A50 ETF and its feeder funds are medium risk level (R3) products and are suitable for investors who are balanced (C3) and above after the customer risk tolerance level assessment. For details on the customer-product risk level matching rules, please see Huitian Rich official website. When subscribing from an agency, the risk rating rules of the agency should prevail. The funds or securities referred to in this material are not sponsored, endorsed or promoted by MSCI, and MSCI does not assume any liability with respect to any such funds or securities or any index on which such funds or securities are based.For a more detailed description of the limited relationship between MSCI and China Universal Fund Management Co., Ltd. and any related funds, please refer to the issuance documents of China Universal MSCI China A50 Interconnect Trading Open-ended Index Securities Investment Fund and its feeder funds. The fund’s underlying index name is MSCI China A50 Interconnect RMB Index . The underlying index does not fully represent the entire stock market. The average return of the underlying index constituents may deviate from the average return of the stock market as a whole. Although China Universal MSCI China A50 Connect ETF is linked to the feeder fund of the target ETF, there is no guarantee that the performance of the fund will be completely consistent with the performance of the target index and target ETF. The annual performance of the MSCI China A50 Connectivity RMB Index from 2016 to 2021 are: -3.88%, 38.37%, -22.80%, 35.10%, 38.43%, -3.29%. Data source: Wind, as of 2021/12/31, The historical performance of the index does not predict the future, nor does it predict the performance of the fund. (CIS)
