This year's performance is sluggish, the industry rotation is too fast, and the market hotspots are difficult to chase, so that many people are confused about choosing the base.
Afraid of choosing the wrong **, and reluctant to give up the layout of a good time, so everyone began to flock to the index **, especially the CSI 300, quite a bit of enthusiasm to buy more and more.
Not only the people, but also Huijin after the ** ETF was released, according to the share change data, it should be mainly based on the CSI 300.
As one of the core broad-based indices of A-shares, the CSI 300 can be said to be the "barometer" of China's ** market, and the CSI 300 Index** is also a must-have product in the portfolio of many investors.
However, although the CSI 300 index has a balanced industry allocation, the fly in the ointment is that the drawdown is not low, and as a passive index type, it cannot obtain a relatively stable alpha.
So, can we find some ** that can not only maintain the balance of industry positions like the CSI 300 index, but also better control the drawdown, and also have a relatively stable alpha?
Aim to navigate through the bottom of market volatility**
The bottom position type product is the "ballast stone" in the portfolio configuration, usually does not bet on a single industry or track, through a balanced allocation of diversification and reduce investment risks, and strive to achieve the effect of stabilizing the mind when the wind and waves come, and seeking opportunities to increase income after the wind and waves.
In my opinion, there are several distinguishable characteristics that a bottom-based product needs to have:High Sharp, low drawdown, and good stability of performance rankings
So I used the following dimensions to do a comprehensive screening in the active equity class of choice (partial stock hybrid** + ordinary** + flexible allocation**):
1. Outperformed the CSI 300 Index and the Stock-biased ** Index for 3 consecutive years
2. The maximum drawdown in the past 3 years cannot exceed 25%.
3. The manager has rich experience in the industry and has experienced at least one round of bulls and bears
4. Long-term performance ranks relatively high
After screening layer by layer, I think the return of the Guofu strategy is more in line with the "bottom position" standard in my mind.
From the perspective of returns, the return of Guofu Strategy has steadily outperformed the CSI 300 and CSI Stock** Index in the past three years.
* The ability to control risks is not weak.
According to Choice data, the largest drawdown since 2021 is much better than the CSI 300 Index and the Partial Equity Mixed Index, and the annualized Sharpe ratio is also the highest among the three.
I also compared the return of the Guofu strategy with the CSI 300 index, and found that in the confrontation with the CSI 300 index, the Guofu strategy returned in 15 quarters of 17 quarters, beating the CSI 300 index, with a winning rate of 8824% (as of 2023.)9.30）。
Data**: Choice, as of 20239.30）
If compared with the CSI 300 Index Enhanced**, the return of Guofu Strategy has outperformed all CSI 300 Index Enhanced** in the past 3 years. Data**: Choice, as of November 30, 2023).
The relatively small drawdown, relatively stable returns, and high win rate relative to broad-based indices make the Guofu strategy return very suitable as a base position for portfolio allocation.
We note that the scale of Guofu's strategic return A has grown rapidly in the second half of this year, reaching 28 as of the third quarter9.4 billion yuan, an increase of about 1 from the previous quarter7 times. At the same time, it is also favored by institutions, with institutional investors holding 93% of the size as of mid-2023, compared to less than 20% at the end of 2019, according to regular reports.
Balanced allocation, relying on the industry to choose stocks to win
So, is the relatively stable return performance of the Guofu strategy sustainable?We base our analysis on the data disclosed in this periodic report, as well as on the manager's public reports.
First of all, from the perspective of industry allocation, the distribution of industries in the return of the Guofu strategy is relatively balanced, and the proportion of industries in the broad-based index is relatively close
Data**: wind
From the perspective of shareholding concentration, the proportion of the top 10 heavy stocks in the return of Guofu Strategy has declined as a whole in the past five years, and it has basically been below 30% since 2021, which is lower than the industry average.
Data**: wind
Industry balance and diversification are the characteristics of many stable types, and the return of the Guofu strategy can maintain a high winning rate compared to the broad-based index, what is unique?
We noticed a very interesting point, according to public reports, based on the attribution analysis of historical performance, as well as the strength endowment of companies and individuals, from the third quarter of 2019, Wang Xiaoning changed the management idea of Guofu strategic return"Exponential enhancement of active management".Ideas.
"Active management index enhancement", generally speaking, refers to the active ** manager, will benchmark the portfolio against a more representative mainstream index, such as the CSI 300, and pursue stability to beat the index.
One might ask, what's the difference between this and passive exponential enhancement
Passive index enhancement is typically benchmarked against a market index, and the manager makes some adjustments in the constituents of the benchmark index in order to achieve returns that exceed the benchmark while maintaining a similar level of risk to the benchmark index.
Actively managed index enhancement strategies are inherently actively managed**. It is to benchmark the index in the industry allocation, but it will make more flexible dynamic adjustments on the premise of not excessive deviation, and at the more specific selection level, it will give full play to the ability of active managers to take care of the house - the ability to select stocks in the industry, and at the same time benchmark the broad-based index, there is more room to play.
Therefore, there are two core points of this strategy: balance and stock selection.
First, the portfolio allocation level, relying on industry balance.
Relying on the advantages of the team, Wang Xiaoning divided Shenwan's 31 industries into 7 major industries: midstream manufacturing, cycle, consumption, deep value, TMT, brokerage and pharmaceutical.
Judging from the historical industry allocation of Guofu's strategic returns, the allocation is balanced and dispersed, and it is not overexposed in any industry. In addition, while retaining the advantages of broad-based index diversification and equilibrium, it is not a pure market capitalization weighting, but a full optimization of stock selection in the industry.
Second, the selection of the target relies on active stock selection.
Abandoning top-down industry rotation, the pressure to obtain excess returns has given stock selection.
Wang Xiaoning belongs to a balanced investment style, and mainly looks at three factors in stock selection: texture, prosperity and valuation.
1. Texture(market space, business model, company competitiveness, human ability), which is a prerequisite for stock selection and is of decisive significance for stock selection.
2. Prosperity(life cycle position, 1-3 years of industry growth, etc.), Wang Xiaoning is a growth style, and texture + prosperity is also what he values.
3. Valuationas a means of risk assessment.
Write at the end
Wang Xiaoning once said in an interview a very interesting rule: the more times the market rotates every year, the higher the ranking of the same kind he manages.
In fact, there is a simple truth behind thisIn fact, most people do not have the excess profitability of industry rotation, but the faster the rotation, the easier it is to make mistakes.
It's the same for us, instead of tossing hard in this unfriendly market, it's better to take the bottom warehouse products, not making mistakes is victory, slowly collect chips, and wait for the inflection point.
Maybe it's the right choice.