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天赐良基
wrote a column · Nov 9, 2020 17:19

Stock Picker: Huitianfu China-Hong Kong Strategy Fund Guides You Through the Bull Market

According to the '2020 Out of the Fog: Survey Report of a Hundred Fund Managers' jointly released by Tencent Wealth Management, Morningstar, Tencent Finance, and others in the first half of the year, over 90% of fund managers believe that the domestic economy will recover in the second half of the year.
In the stock market, more than 70% of fund managers believe that the overall valuation of Hong Kong stocks is currently undervalued or severely undervalued, leaving substantial room for growth. Investors may consider long-term strategic investments at lower levels.
Nearly half of the fund managers consider the current overall valuation of A-shares to be normal, while over 30% believe it is undervalued or severely undervalued.
In the first half of the year, a report titled '2020 Out of the Fog: Survey of 100 Fund Managers,' jointly released by Tencent Licaitong, Morningstar, and Tencent Finance, showed that over 90% of fund managers believed that the domestic economy would recover in the second half of the year. In the stock market, more than 70% of fund managers believed that the overall valuation of Hong Kong stocks is currently low or severely low, with significant room for growth. Investors could consider long-term strategic investments at lower levels. Nearly 50% of fund managers believed that the current overall valuation of A-shares is normal, while more than 30% considered it to be low or severely low. The reasons for undervaluation are obvious. Hong Kong's stock market was severely affected by the pandemic this year, with many value stocks being unfairly punished. As of October 23, the Hang Seng Index had fallen by 11.6% over the past several months and is now in a phase of bottom recovery, presenting a good opportunity for strategic investment. For A-shares, fundamentals are gradually improving, and in the remaining months of the year, or even into the first quarter of next year, data may show quarter-on-quarter and sequential organic improvement. Positioning Low-Valuation Potential Markets In these two potential markets, Hong Kong and A-shares, many investors are evidently eager to act but remain uncertain about when to enter. Buying a single lot of Moutai shares is so expensive—how can one invest in desirable targets with relatively less capital? Indeed, there is a solution: buy a fund that invests in these stocks. Huitianfu China-Hong Kong Strategy Fund (hereinafter referred to as the 'Fund') prefers large-cap growth stocks in its portfolio. As of September 30, 2020, the top three sectors were discretionary consumer goods (31.9%), healthcare (30...
The reasons for the undervaluation are evident: Hong Kong stocks have been severely impacted by the pandemic this year, with many value stocks being unjustly sold off. As of October 23, the Hang Seng Index has fallen 11.6% over the past several months and is now in a phase of low-level recovery, presenting an excellent opportunity for strategic investment. For A-shares, the fundamentals are gradually improving, and in the remaining months of the year and potentially into the first quarter of next year, we may see quarter-on-quarter and sequential intrinsic improvements in various data points.
Positioning in low-valuation potential markets
These two promising markets, Hong Kong and A-shares, have attracted significant interest from investors. However, while industries may seem appealing, many investors remain uncertain about when to enter. Given the high cost of purchasing premium stocks like Moutai, is there a way to gain exposure to relatively more desired investment targets with less capital?
Indeed, there is: investing in a fund that holds these stocks.
The Huitianfu China-Hong Kong Strategy Fund (hereinafter referred to as the 'Fund') prefers large-cap growth stocks. As of September 30, 2020, its top three sectors wereDiscretionary Consumer Goods (31.9%)、Healthcare (30.9%) and Essential Consumer Goods (21.4%)。
In the first half of the year, a report titled '2020 Out of the Fog: Survey of 100 Fund Managers,' jointly released by Tencent Licaitong, Morningstar, and Tencent Finance, showed that over 90% of fund managers believed that the domestic economy would recover in the second half of the year. In the stock market, more than 70% of fund managers believed that the overall valuation of Hong Kong stocks is currently low or severely low, with significant room for growth. Investors could consider long-term strategic investments at lower levels. Nearly 50% of fund managers believed that the current overall valuation of A-shares is normal, while more than 30% considered it to be low or severely low. The reasons for undervaluation are obvious. Hong Kong's stock market was severely affected by the pandemic this year, with many value stocks being unfairly punished. As of October 23, the Hang Seng Index had fallen by 11.6% over the past several months and is now in a phase of bottom recovery, presenting a good opportunity for strategic investment. For A-shares, fundamentals are gradually improving, and in the remaining months of the year, or even into the first quarter of next year, data may show quarter-on-quarter and sequential organic improvement. Positioning Low-Valuation Potential Markets In these two potential markets, Hong Kong and A-shares, many investors are evidently eager to act but remain uncertain about when to enter. Buying a single lot of Moutai shares is so expensive—how can one invest in desirable targets with relatively less capital? Indeed, there is a solution: buy a fund that invests in these stocks. Huitianfu China-Hong Kong Strategy Fund (hereinafter referred to as the 'Fund') prefers large-cap growth stocks in its portfolio. As of September 30, 2020, the top three sectors were discretionary consumer goods (31.9%), healthcare (30...
Data source: Fund Monthly Report, as of October 31, 2020
Among the top five holdings, there are several large-cap stocks with outstanding performance, ranked by shareholding percentage as follows:Kweichow Maotai（10.2%），Yibin Wuliangye（10.0%）, JD.com (9.8%), Tencent (9.8%), and China Travel Service Group (9.5%)。
In the first half of the year, a report titled '2020 Out of the Fog: Survey of 100 Fund Managers,' jointly released by Tencent Licaitong, Morningstar, and Tencent Finance, showed that over 90% of fund managers believed that the domestic economy would recover in the second half of the year. In the stock market, more than 70% of fund managers believed that the overall valuation of Hong Kong stocks is currently low or severely low, with significant room for growth. Investors could consider long-term strategic investments at lower levels. Nearly 50% of fund managers believed that the current overall valuation of A-shares is normal, while more than 30% considered it to be low or severely low. The reasons for undervaluation are obvious. Hong Kong's stock market was severely affected by the pandemic this year, with many value stocks being unfairly punished. As of October 23, the Hang Seng Index had fallen by 11.6% over the past several months and is now in a phase of bottom recovery, presenting a good opportunity for strategic investment. For A-shares, fundamentals are gradually improving, and in the remaining months of the year, or even into the first quarter of next year, data may show quarter-on-quarter and sequential organic improvement. Positioning Low-Valuation Potential Markets In these two potential markets, Hong Kong and A-shares, many investors are evidently eager to act but remain uncertain about when to enter. Buying a single lot of Moutai shares is so expensive—how can one invest in desirable targets with relatively less capital? Indeed, there is a solution: buy a fund that invests in these stocks. Huitianfu China-Hong Kong Strategy Fund (hereinafter referred to as the 'Fund') prefers large-cap growth stocks in its portfolio. As of September 30, 2020, the top three sectors were discretionary consumer goods (31.9%), healthcare (30...
Data source: Fund Monthly Report, as of October 31, 2020
It is worth noting that in the first half of 2020, technology, pharmaceuticals, and consumer stocks were among the top gainers in both A-shares and Hong Kong stocks.
In particular, pharmaceutical stocks benefited from the pandemic-driven demand for medical supplies, showing the strongest momentum. The pharmaceutical sector in the A-share market rose by 42%, while in Hong Kong it increased by 22%. (Data source: Wind, covering the period from January 1, 2020 to June 30, 2020)
Percentage change in Hong Kong stock market sectors in the first half of the year
In the first half of the year, a report titled '2020 Out of the Fog: Survey of 100 Fund Managers,' jointly released by Tencent Licaitong, Morningstar, and Tencent Finance, showed that over 90% of fund managers believed that the domestic economy would recover in the second half of the year. In the stock market, more than 70% of fund managers believed that the overall valuation of Hong Kong stocks is currently low or severely low, with significant room for growth. Investors could consider long-term strategic investments at lower levels. Nearly 50% of fund managers believed that the current overall valuation of A-shares is normal, while more than 30% considered it to be low or severely low. The reasons for undervaluation are obvious. Hong Kong's stock market was severely affected by the pandemic this year, with many value stocks being unfairly punished. As of October 23, the Hang Seng Index had fallen by 11.6% over the past several months and is now in a phase of bottom recovery, presenting a good opportunity for strategic investment. For A-shares, fundamentals are gradually improving, and in the remaining months of the year, or even into the first quarter of next year, data may show quarter-on-quarter and sequential organic improvement. Positioning Low-Valuation Potential Markets In these two potential markets, Hong Kong and A-shares, many investors are evidently eager to act but remain uncertain about when to enter. Buying a single lot of Moutai shares is so expensive—how can one invest in desirable targets with relatively less capital? Indeed, there is a solution: buy a fund that invests in these stocks. Huitianfu China-Hong Kong Strategy Fund (hereinafter referred to as the 'Fund') prefers large-cap growth stocks in its portfolio. As of September 30, 2020, the top three sectors were discretionary consumer goods (31.9%), healthcare (30...
Percentage change in A-share market sectors in the first half of the year
In the first half of the year, a report titled '2020 Out of the Fog: Survey of 100 Fund Managers,' jointly released by Tencent Licaitong, Morningstar, and Tencent Finance, showed that over 90% of fund managers believed that the domestic economy would recover in the second half of the year. In the stock market, more than 70% of fund managers believed that the overall valuation of Hong Kong stocks is currently low or severely low, with significant room for growth. Investors could consider long-term strategic investments at lower levels. Nearly 50% of fund managers believed that the current overall valuation of A-shares is normal, while more than 30% considered it to be low or severely low. The reasons for undervaluation are obvious. Hong Kong's stock market was severely affected by the pandemic this year, with many value stocks being unfairly punished. As of October 23, the Hang Seng Index had fallen by 11.6% over the past several months and is now in a phase of bottom recovery, presenting a good opportunity for strategic investment. For A-shares, fundamentals are gradually improving, and in the remaining months of the year, or even into the first quarter of next year, data may show quarter-on-quarter and sequential organic improvement. Positioning Low-Valuation Potential Markets In these two potential markets, Hong Kong and A-shares, many investors are evidently eager to act but remain uncertain about when to enter. Buying a single lot of Moutai shares is so expensive—how can one invest in desirable targets with relatively less capital? Indeed, there is a solution: buy a fund that invests in these stocks. Huitianfu China-Hong Kong Strategy Fund (hereinafter referred to as the 'Fund') prefers large-cap growth stocks in its portfolio. As of September 30, 2020, the top three sectors were discretionary consumer goods (31.9%), healthcare (30...
Data source: Wind, covering the period from January 1, 2020 to June 30, 2020
Technology stocks listed online, impacted by the pandemic, saw a collective surge led by Tencent and Alibaba. Notably, Tencent Holdings (0700.HK) delivered an outstanding performance, benefiting from growth in its online gaming business and global monetary easing. Investors' preference for high-quality assets drove the stock to new highs, briefly making it the largest company by market capitalization on the Hong Kong Stock Exchange.
The consumer sector is gradually recovering as the pandemic comes under control. Kweichow Maotai, a star enterprise in the A-share market, has repeatedly hit new highs. By early October, Kweichow Maotai had 'soared' again, with its share price nearing 1,700 yuan per share and its market value exceeding 2 trillion yuan. According to Wind data for October, there are only three companies in the global food and beverage sector with a market value surpassing 1 trillion yuan, and Kweichow Maotai, as one of them, undoubtedly holds a leading position in the A-share consumer sector.
In summary, several of these top-performing stocks have been captured by the Huitianfu China-Hong Kong Strategy Fund.
For those uncertain about how to select individual stocks, opting for a fund with exceptional stock-picking capabilities could be a prudent consideration.
Consistently outperforming the Hang Seng Index over the long term, demonstrating sustained leadership in Hong Kong equity investments.
Of course, when evaluating a fund, attention should be paid to its long-term performance, as time is the best testament to ability.
The Huitianfu China-Hong Kong Strategy Fund was established on November 16, 2012. Its performance has consistently outperformed both the Hang Seng Index and the Hang Seng China Enterprises Index. Even amid the pandemic's impact this year, which severely affected the broader A-share and Hong Kong markets, the fund still achieved remarkable results, delivering a total return of 57.16% year-to-date.
In the first half of the year, a report titled '2020 Out of the Fog: Survey of 100 Fund Managers,' jointly released by Tencent Licaitong, Morningstar, and Tencent Finance, showed that over 90% of fund managers believed that the domestic economy would recover in the second half of the year. In the stock market, more than 70% of fund managers believed that the overall valuation of Hong Kong stocks is currently low or severely low, with significant room for growth. Investors could consider long-term strategic investments at lower levels. Nearly 50% of fund managers believed that the current overall valuation of A-shares is normal, while more than 30% considered it to be low or severely low. The reasons for undervaluation are obvious. Hong Kong's stock market was severely affected by the pandemic this year, with many value stocks being unfairly punished. As of October 23, the Hang Seng Index had fallen by 11.6% over the past several months and is now in a phase of bottom recovery, presenting a good opportunity for strategic investment. For A-shares, fundamentals are gradually improving, and in the remaining months of the year, or even into the first quarter of next year, data may show quarter-on-quarter and sequential organic improvement. Positioning Low-Valuation Potential Markets In these two potential markets, Hong Kong and A-shares, many investors are evidently eager to act but remain uncertain about when to enter. Buying a single lot of Moutai shares is so expensive—how can one invest in desirable targets with relatively less capital? Indeed, there is a solution: buy a fund that invests in these stocks. Huitianfu China-Hong Kong Strategy Fund (hereinafter referred to as the 'Fund') prefers large-cap growth stocks in its portfolio. As of September 30, 2020, the top three sectors were discretionary consumer goods (31.9%), healthcare (30...
Data source: Fund Class A HKD shares; Morningstar Category: Hong Kong Equity; as of October 7, 2020. Index performance is for reference only and does not represent a benchmark.
The fund ranks first among similar funds in terms of year-to-date, three-year, and five-year performance. It has received 5-star ratings from Morningstar for its 3-year, 5-year, and overall performance*, earning recognition from authoritative institutions.
The investment landscape in the Hong Kong and A-share markets is vast, and identifying opportunities in Hong Kong-listed stocks requires a higher level of expertise. In cases where investors lack certainty, they may consider entrusting their investments to professional institutions with a proven track record of consistent performance to benefit from the upside potential in the Hong Kong and A-share markets.
*According to Morningstar data, as of June 30, 2020, the Huatai-PineBridge Hong Kong-China Strategy Fund Class A HKD, Class I HKD, and Class A USD received a 5-star rating.*
Disclaimer
Risk and Disclaimer Notice: This document is not and should not be considered an offer, solicitation, invitation, or recommendation to buy or sell any investment products or to make any investment decisions, nor should it be interpreted as professional advice. In any jurisdiction where the distribution of the information contained in this document is prohibited, the information herein does not constitute an offer to sell, a solicitation to buy, or an invitation to trade any securities in that jurisdiction. Individuals who browse this document should pay attention to and comply with any relevant restrictions. Those reading this document or making any investment decisions should fully understand the risks and the characteristics and consequences related to the relevant laws, taxes, and accounting, and decide based on their personal circumstances whether the investment is suitable for their financial situation and investment objectives, as well as whether they can bear the associated risks, and should seek appropriate professional advice if necessary. Investment involves risks, and investors should carefully read the fund prospectus, product information summary, and related documents to understand the details of the fund (including its risk factors). Investors should pay particular attention to the risks associated with investing in emerging markets. Please note that the prices of fund products can rise or fall and may fluctuate significantly in a short period, and investors may not be able to recover the amount they invested in the fund. Past performance of the fund does not guarantee future performance. If there are any forward-looking statements in this document, such statements should not be construed as guarantees of any future performance, and actual circumstances or developments may differ significantly from those statements. This document is published by Futu Securities International (Hong Kong) Limited and has not been reviewed by the Hong Kong Securities and Futures Commission.
The fund may partially invest in assets quoted in currencies other than its base currency. In addition, the categories of units may be named in currencies other than the fund's base currency. Therefore, the fund's performance and net asset value will be adversely affected by fluctuations in exchange rates between those currencies and the fund's base currency, as well as changes in exchange rate controls.
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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