Putting all funds in a basket of A-shares or spreading money among funds of different countries is a new question.
When A-share funds were shot down, the highest return of QDII funds has exceeded that of A-share funds by 23%. In the last month, when the star fund managers who had amassed A-shares generally lost more than 15%, they invested in Japan and India. And Vietnam’s QDII funds are laughing.
There has even been a phenomenon in which technology stocks heavily held by QDII funds have used bargaining power to suspend heavy holdings of A-share funds. The hatred is that Shin-Etsu Chemical, the largest heavyweight stock of the China Investment JP Morgan Japan Equity Select Fund, announced on March 3 that its external price increase was 10% to 20%, resulting in the A-share semiconductor index on March 4 to March 9. The continuous decline has caused the A-share semiconductor stocks that are heavily invested by the fund to lie down. Shin-Etsu Chemical is the world’s largest semiconductor material manufacturer, focusing on semiconductor wafers and photoresist, and has a very high market voice and bargaining power, while more than 90% of semiconductor wafers of related Chinese companies rely on imports.
QDII yields have crushed A-share funds
Wind data shows that as of March 9, 2021, QDII funds have the highest yield this year, which has exceeded 50%, which is 23 percentage points behind A-share funds.
Calculated separately by fund shares, the data shows that there are currently 17 QDII funds with a yield of more than 30% this year. Among them, the highest yield of the Huabao S&P Oil and Gas USD Fund has a yield of more than 50%. In addition, the GF Dow Jones U.S. Petroleum Fund, a subsidiary of GF Funds, has a yield of 44% this year, and the Lion’s Oil and Gas Energy Fund, a subsidiary of Lions Fund, has a yield of 36% this year. Cathay Pacific Commodities Fund also has a yield this year. Nearly 33%.
Compared with QDII funds that invest overseas, A-share funds have the highest yield this year at 27%, which is 23 percentage points behind QDII funds in the same period. According to wind data, as of March 9, 2021, the highest rate of return on A-share funds was ABC-Agricultural Consumer-Themed Fund, with a year-to-date rate of 27.72%, followed by Anxin Xinfa Optimal Fund, with a year-to-date rate of return 25.15%.
QDII’s achievement in the top rankings is largely due to the performance of overseas oil and gas markets. Morgan Stanley issued a report on March 5, stating that the oil market is expected to have a short supply of 1.4 million to 1.9 million barrels per day in the second and third quarters of 2021, reiterating that the price of Brent crude oil in the third quarter of 2021 will reach The forecast of 70 US dollars / barrel, and is expected to reach 80 US dollars / barrel in the case of a bull market.
Goldman Sachs also raised its oil price forecast recently. The agency stated in a report that it has increased its Brent oil price forecasts for the second and third quarters of this year by US$5 to US$75 and US$80 per barrel. Prior to this, Saudi Arabia and OPEC+ allies Decided to extend the crude oil production limit. The report said, “Although members discussed the risk of epidemic demand, the information we got from the press conference is that self-discipline of shale producers may be behind the slowdown in production growth.” Goldman Sachs lowered its OPEC+ production forecast for the next six months by 900,000 barrels per day. The bank also raised its forecast for the fourth quarter and 2022 by US$5 to US$75/barrel respectively, and raised its forecast for US shale oil production in 2022 by 300,000 barrels/day.
QDII funds increase the attractiveness of investment in the three major countries
The fact that QDII funds crush A-share funds is not all because of the crude oil market. For example, the three public fund products launched by mainland fund companies in Vietnam, India, and Japan reflect the attractiveness of the stock markets for investment in these three countries.
“I have seven or eight funds in my hands. Recently, only foreign QDII funds are still making money.” A Christian in southern China told a brokerage China reporter. Fortunately, when I bought the funds, not all of them were invested in A. In the stock fund, I also bought a Vietnam QDII fund.
Brokerage China reporters noticed that the recent one-month plunge in the A-share market has caused heavy losses for fund managers who hold A-share stocks. Many fund investors have begun to consider not putting eggs in a fund basket. Obviously, country-specific investment is a major factor. This decentralized strategy is very important to the Christians.
Statistics show that as of March 9th, a total of 1069 funds have fallen by more than 15% in their net worth in the most recent month, and 171 funds have fallen by more than 20% in their net worth in the most recent month. Among them, funds with heavy holdings of A-share assets have fallen the most. The highest is close to 26%.
Compared with the funds that have heavily invested in A-shares in the past month, funds in India, Vietnam, and Japan have performed well.
The main index of the Indian stock market, the Mumbai 30 Index, rose from 46810 points in early February to 50,696 points on March 9. The index rose by about 8% during the period. Brokers China reporter noticed that ICBC Credit Suisse India Market Fund, a fund of ICBC Credit Suisse Fund Co., Ltd., which is the main printing market, has also received a positive return of 1.44% in the most recent month.
According to reports, ICBC Credit Suisse India Market Fund mainly invests in related funds (including ETFs) that track the Indian market overseas, using CITIC Securities India ETP Index yield × 90% + RMB demand deposit yield (after tax) × 10% as the performance comparison benchmark , And strive to achieve effective tracking of the trend of the Indian stock market. In terms of investment ratio, the fund’s assets invested in funds (including ETFs) are no less than 80% of the fund’s assets, and the proportion of funds invested in related funds tracking the Indian market is no less than 80% of non-cash fund assets.
The Vietnamese stock market has also performed extremely well in the last month, having recovered all the ground lost in the crash in January this year.
On January 19 this year, Vietnam’s benchmark stock index, the Ho Chi Minh Index (VN INDEX) plummeted 5.11%. Due to the sharp increase in sell orders within a short period of time, the trading system of the Ho Chi Minh Stock Exchange was once squeezed to a halt, and the market suddenly fell into chaos. The statistics of transactions and individual stocks stagnated for a while, and the duration was close to 20 minutes. After that, within half a month, the index fell sharply from around 1187 to around 990, and the index fell by as much as 17% in half a month.
Since the beginning of February, the Vietnamese stock market has rebounded strongly, rising from around 990 points to around 1187 points, which means that the Ho Chi Minh stock market index in Vietnam has risen close to 20% in the most recent month.
Celestica Vietnam Fund, a QDII fund of Celestial Fund Company which focuses on Vietnamese stocks, has also achieved positive returns in the last month. Compared with the A-share funds managed by many star fund managers, Celestica has plummeted by about 20%. Vietnam equity funds rose 3.5% over the same period.
As of the end of 2020, the largest holding of the Celestial Vietnam Fund managed by Hu Chao is Hoa P, a Vietnamese blue chip stock engaged in the steel business, accounting for 9.23% of the Celestial Vietnam Equity Fund’s position, and the stock’s trend performance Strong, with an increase of more than 130% since 2020.
The Japanese stock market has also been extremely defensive in recent times. On February 15 this year, the Nikkei 225 Index hit 30,000 points, the first time since August 1990. This is a sign of Japan’s domestic economic recovery and it also benefits from the US economy. The stimulus plan made progress. Prior to this, the wider coverage of the Topix Index (Topix) also hit a record high, rising to the highest point in the past 30 years.
Based on the recovery of the Japanese stock market, the China Investment JP Morgan Japan Selected Equity QDII Fund, which focuses on Japanese stock investment, has experienced ups and downs during the period, but the net value of this QDII fund that invests in Japanese stocks has fallen by only 1.3% in the most recent month. The ability to guarantee income has been significantly ahead of many A-share funds. China International Investment JP Morgan Japan Selected Equity QDII Fund is managed by Zhang Jun, Director of Fund Investment Department of China International Investment JP Morgan Fund.
Why did QDII’s heavy holdings scare down the A-share fund’s heavy holdings?
It is worth mentioning that the first largest stock in Japanese stocks selected by fund manager Zhang Jun is Shin-Etsu Chemical. As of the end of last year, this stock accounted for 5.05% of the fund’s position.
Shin-Etsu Chemical, a Japanese stock that has typically benefited from the development of China’s semiconductors, is a core supplier of China’s semiconductor industry and has a monopoly to some extent.
For example, in the field of photoresist and semiconductor wafers, Shin-Etsu Chemical has a higher market voice and bargaining power in the Chinese market. According to statistics from research institutions, as of September 2020, Shin-Etsu Chemical has been manufacturing silicon wafers globally. The market share is as high as 29.4%, ranking first in the world.
On March 3, Shin-Etsu Chemical, the world’s largest semiconductor wafer manufacturer, issued an announcement on its official website, announcing that the sales price of all its silicon products will increase by 10% to 20% from April. Shin-Etsu Chemical said through its official website that the cost of silicon metal, the main raw material for silicone, is rising, coupled with the strong growth in demand in the Chinese market, which has led to supply shortages and rising production costs.
Shin-Etsu Chemical’s increase in the ex-factory price of semiconductor wafers is considered a semiconductor concept stock that is bad for China’s A-shares. China’s domestic semiconductor wafer manufacturers mainly rely on imports for wafers, and the degree of localization is low. Semiconductor wafers are in the manufacturing of integrated circuits. The most fundamental source material is widely used in new industries such as 5G, new energy vehicles, and the Internet of Things. Related Chinese companies mainly import these products from Japanese manufacturers such as Shin-Etsu Chemical.
Since the first major stock of the Shanghai Investment JPMorgan Japan Select Fund announced its price increase on March 3, the A-share semiconductor index immediately began to plummet, falling 4.56% on March 4, 0.39% on March 5, and March 8. The daily decline was 5.17%. On March 9, the semiconductor index fell again by 4.93%, exacerbating the losses of funds holding A-share semiconductor stocks.