This year, due to the interference of various factors, global stock markets have fallen into turmoil.
As Feder starts a new round of interest rate hike cycle, U.S. stock has entered a downward mode. Whether it is the growing technology stock or the relatively stable consumer stocks, they have experienced considerable declines.
As of September 13, the S&P 500 and Nasdaq index fell by 13.76% and 21.60% respectively in the year, and it fell for seven consecutive weeks from April to May, setting the longest consecutive week in the past decade.
In fact, in the minds of most domestic investors, in addition to A shares , the US stock market is also an important focus on the market, and will take action as long as the opportunity arises.
Although the US stock market experienced a sharp decline from June to August, many people in China continued to buy the bottom of through QDII fund , and they bought the lower the more they fell.
Statistics show that many domestic ETFs invested in US stocks have achieved counter-trend growth since this year. Among them, the Nasdaq 100 ETF (code 513300) is also an important tool for investors to buy at the bottom. The total share has increased from 400 million shares at the beginning of the year to 1.1 billion now, more than doubled.
From this we can see that investors are very enthusiastic about buying bottom-up US stocks.
Why do investors favor US stocks so much?
funds are like water, and their sense of smell is the most sensitive. will immediately "spread" the investment opportunities that appear in the market. At present, there are actually profound reasons why so many investors are buying bottom-line US stocks.
First of all, it is the excellent performance of the US stock market in the past.
As the saying goes, go to a place where there are fish. Because there are many fish in places, you have a better chance to catch more fish.
Looking around the world, compared with the global stock market, it is difficult for the US stock market to match it. It has performed very well in a long-term historical performance, especially since 2009, it has experienced the longest bull market increase record in history.
Wind data shows that US stocks represented by Nasdaq and S&P 500 have performed relatively well in the past five years, ten years and twenty years, and have significantly outperformed mature market indices such as Germany's DAX and France's CAC, and this excess is very huge.
However, the reason why the US stock market is so excellent may be that many people may think it is the reason why the Fed is liberalizing. Of course, this is an important reason, but the profit growth behind listed US stock companies is actually a more critical factor.
The long bull market in the US stock market is mainly driven by profits.
When measuring whether a certain type of asset has investment value, return on net assets (ROE) and investment capital return on return (ROIC) are two important indicators. They can reflect whether a company has the ability to return shareholders and also determine whether the company's intrinsic value can continue to improve.
Peking University Guanghua School of Management Dean Liu Qiao , in the book "From Big to Great 2.0: Reshaping the Micro Foundation of China's High-Quality Development", a special statistics were made on the ROICs of listed American companies. From 1998 to 2017, the average value of this indicator was between 10% and 12%, which can create relatively good investment returns for shareholders, far higher than A-shares in the same period.
Secondly, the US stock market has high allocation value.
The texture of the asset is one aspect, and the grasp of the timing is more critical, because compared with the selling price, the buying price is actually more important. "the moment of buying" has already decided whether this transaction can make money.
Due to the sharp decline in the index in the first half of the year, the valuation of US stocks has also fallen back. It has become more reasonable and has a high allocation value.
Wind data shows that the latest dynamic price-to-earnings ratio (TTM-PE) of S&P 500 index is 21.04 times, and is currently at the percentage point of 42.34% in the past decade, at a reasonable level, comparable to the low point at the end of 2018.
It is precisely because of the excellent performance of the United States in the past and the current valuation has fallen sharply, so domestic investors hope to get on the car at the low level and continue to buy the bottom of the US stock market.
In fact, in the first half of this year, Buffett was also buying bottom-line US stocks.
According to the data released, in the first quarter of this year, Berkshire 's holdings added 8 stocks and increased their holdings 7 stocks. Buffett previously revealed at the shareholders' meeting that the company bought a total of US$51.8 billion in stocks in the first quarter,
re-recognizes S&P 500
At present, with the continuous enrichment of products, there are still quite a lot of domestic products investing in US stocks. Among the passive index funds, there are both industry-themed index funds and broad-based indexes such as Nasdaq and S&P 500.
Taking advantage of the current US stock market pullback, we will focus on the S&P 500.
S&P 500 index was compiled by S&P in 1957. It is widely regarded as the only best indicator to measure the US large-cap stock market. It covers 500 representative listed companies in the US stock market. It is an ideal index representing the entire US market and is widely used in the measurement of the US stock market.
Since this index is calculated based on the prices of most common stocks listed on New York Stock Exchange , it can be adjusted flexibly in time with events that cause price changes such as new stock subscription, stock dividends and divisions.
Therefore, the index value is more accurate and has good continuity, and is often better representative than the US Dow Jones Index .
From the perspective of industry distribution, compared with Nasdaq's concentrated in information technology sectors such as technology, the S&P 500 index has a wider range of industries, covering 11 industry sectors in the United States, not only covering leading companies in various fields such as industry, transportation, utilities, and finance, but also health care, finance, optional consumption, communication services, etc.
has both growth and traditional industries, and is more balanced.
From the individual stocks selected, the S&P 500 index is a typical blue chip index, which mostly covers top listed companies in the US stock market, covering leading companies such as Apple , Microsoft , Google , Amazon , Tesla and other leading companies. The top ten components have a total weight of 28.30%.
Compared with the Dow Jones Index, the Standard 500 index contains more companies, so the risks are more diversified and can reflect market changes more widely.
In addition, in terms of entering the exit mechanism, individual stocks qualified to enter the S&P 500 index must be industry leaders, and the individual stock targets will be selected by a committee and will be replaced regularly, and the company at the end will be replaced. Therefore, the S&P 500 index can always ensure the market value level of its constituent stocks.
From a historical perspective, since the base date on January 3, 1928, the cumulative increase of the S&P 500 index has exceeded 221 times, which is very excellent. In the past 10 years, the annualized return of the S&P 500 has been 12.18%, and the total return is 186.13%, better than the broad-based index of developed countries such as Nikkei 225, the UK FTSE 100, and the German DAX.
It is precisely because the S&P 500 includes most high-quality leaders in the US stock market, which can better characterize the performance of US stocks and have good returns.
Therefore, in the letter to shareholders, Buffett recommended the Standard 500 index to investors many times. He believes that for ordinary investors who do not know how to select stocks, the S&P 500 Index fund is the best choice.
Whether a certain type of target can be included in the combination is actually in addition to the excellent texture or not, correlation is also an important consideration, because low correlation can better disperse the risk of the combination.
From the perspective of correlation, S&P 500 has a low correlation with domestic assets, effectively reducing the dependence and risks of the portfolio on a single market, thereby improving the resilience of the portfolio. Data shows that the correlation between S&P 500 and the Shanghai and Shenzhen 300 is only 0.14, and it is negatively correlated with the Shanghai Stock Exchange's 5-year Treasury bonds, which can well hedge against risks.
For those who are making asset allocation worldwide, the US stock market is an absolutely indispensable market. Among them, the S&P 500, which has excellent performance and better representativeness, has a low correlation with other domestic equity assets such as and gold. It is an indispensable target for balanced combination allocation and deserves our attention.
As a major domestic ETF manufacturer, it is also the only one that won the " passive investment in Taurus Fund Company" award for seven consecutive years. Huaxia Fund is currently issuing an ETF that tracks S&P - S&P ETF (code 159655). This is also the second index fund to invest in the US stock market.
This fund is managed by Zhao Zongting. He is the senior vice president of the Quantity Investment Department of Huaxia Fund. The scale of public funds under management has reached 64.794 billion yuan, and he has rich experience in managing equity ETF.
Finally, I would like to remind you that although the current valuation of US stocks has fallen a lot and is in a relatively reasonable position, it is likely to continue to fall in the context of hike rate . Therefore, if you want to invest in S&P 500, it is best to invest in batches, so you can diversify risks.
This article is information sharing and does not constitute any investment advice. The market is risky, so be cautious when investing.
