So, how can we make the absolute return positive? Through the product design manual of Huaxia Return Fund, we know that Huaxia Fund Company will provide guarantee for the fund to seek positive returns through the following four ways and means.
Flexible asset allocation strategy
One of the guarantees for Huaxia Return Fund to pursue absolute return is to adopt flexible asset allocation strategy. The proportion of its investment products is set as follows: the proportion of stock investment is between 0 and 80%, the proportion of bond investment is between 20 and 100%, and the rest is cash, with the proportion of 0 to 20%. This will be the first stock fund in China to set the lower limit of its shareholding ratio to zero. In the past, stock funds generally stipulated in the contract that they should hold at least a certain proportion of stock positions.
This broad asset allocation ratio provides fund managers with the greatest flexibility in asset allocation. When the stock market is risky or uncertain, fund managers will reduce their stock positions or even not invest in stocks to avoid stock market risks. Once the stock market becomes stronger, it will increase stock positions and earn the highest expected annualized income for investors. In fact, according to our empirical research results, historically, more than 88% of the changes in fund net value in different quarters can be explained by strategic asset allocation factors, which shows that the control of fund stock and bond positions is an important performance composition. Therefore, if this strategy is used properly, it can provide a lot of room for capital appreciation.
Of course, the key prerequisite for the proper use of flexible asset allocation strategy is that fund managers must have the ability to grasp the opportunity of asset allocation and accurately predict the average expected annualized rate of return in the future bond and stock markets. Few domestic funds can continuously demonstrate this ability, and Xinghua Fund under Huaxia is one of the few outstanding ones.
Value-based investment stock selection strategy
Another guarantee for pursuing absolute returns is stock selection. Huaxia Return Fund will adopt a value-based stock selection strategy, focusing on stocks with large total share capital and circulating share capital and stocks with low expected dynamic P/E ratio.
Value-based stock selection strategy is usually considered as a defensive portfolio strategy. However, the outstanding performance of the value-based market launched by fund-based institutional investors has profoundly affected the investment concept and profit model of China securities market, and completely abandoned the view that the value-based investment strategy is useless. Facts have proved that value investment is not only a defensive portfolio investment strategy, but also can earn excess profits for investors. Once this concept is established, it will affect the stock price trend for a long time. One of our empirical studies shows that after February 2000, the profit model of China stock market began to change from growth stock portfolio to value stock portfolio. Investment value stock portfolio can not only obtain excess returns, but also bear no increased risks. We believe that the outstanding performance of large-cap value stocks represents the future investment trend. Taking value investment as a stock selection strategy has laid the foundation for Huaxia Return Fund to obtain higher absolute expected annualized income.
Ace fund managers are superior in ability
Another outstanding feature of Huaxia Return Fund is the choice of fund managers. After nearly two years of investment practice, a number of star fund managers have emerged in the fund market. Mr. Kong Fai, the current fund manager of Xinghua Fund, is undoubtedly recognized as one of the trump card fund managers in the market by virtue of his outstanding investment performance.
Mr. Kong Fai has 10 years experience in securities investment, and has achieved good investment performance since 1998 joined Huaxia Fund Company. In the past three and a half years, the cumulative expected annualized rate of return of funds managed by Kong Fai has reached 58%, far exceeding the expected annualized rate of return of the market index and bank deposits in the same period: 200 1, and the fund managed by Kong Fai ranks third in the net growth rate of 48 funds; Xinghua, a fund managed by Kong Fai in 2002, ranked first among 54 funds; In the first half of this year, the investment performance of Xinghua Fund ranked second among 73 funds.
A brand fund manager will be a powerful guarantee for Huaxia return fund to obtain absolute income. After all, no matter how good the asset allocation strategy and stock selection strategy are, it depends on the ability of specific operators to achieve it. The investigation of historical data shows that Kong Fai's outstanding investment performance over the years is mainly due to its good judgment on the general trend, strong timing and asset allocation ability. From 200 1 to 2003, we can see that the increase and decrease of Xinghua stock position of the Fund is basically consistent with the increase and decrease of Shanghai Stock Index, which fully shows Kong Fai's excellent timing ability and excellent asset allocation ability.
In addition, Kong Fai's investment style is also very consistent with the product style of Huaxia Return Fund. Its stock picking style advocates value investment. In the fourth quarter of 2002, it increased its holdings of large-cap stocks such as Baoshan Iron and Steel, China Merchants Bank and China Unicom, which played an important role in the net increase of 65,438+09,438+02% in the first half of 2003.
It should be said that at the beginning of the design, Huaxia Return Fund considered how to combine the advantages of fund managers with the characteristics of the product itself. Therefore, it will be a product tailored for specific fund managers, and the perfect combination of the two will be unique in the domestic fund market.
The overall strength of fund companies is outstanding.
Good investment performance must be achieved on the basis of teamwork, and an excellent fund manager is only an outstanding representative of this team, and this team relies on the company's strong research platform and the close cooperation of various departments. The outstanding strength of Huaxia Fund Company as a whole provides another important guarantee for Huaxia Return Fund to pursue absolute return.
First, the assets are huge. As of June 2003, Huaxia Company * * * managed two open-end funds and five closed-end funds, with total assets of over 654.38+07 billion yuan. It is one of the fund management companies with the largest number of funds managed, the widest business scope and the largest assets in China.
Second, the performance of the fund is excellent. Since its establishment, five closed-end funds have been in the forefront of the fund industry in the same period. The company's first open-end fund, Huaxia Growth Fund, has achieved excellent performance for more than a year and paid dividends twice.
Third, the market image is good. Huaxia Bond Fund, the second domestic open-end fund, was established on October 23rd, 2002, with an initial share of 565,438+33 million, ranking first among all domestic open-end funds at that time. June 65438+February 65438+March 2002, the company became the first batch of national social security fund investment managers; In April 2000, 17, the first postdoctoral workstation in China fund industry was approved by the Ministry of Personnel.
Fourth, the management system is perfect. The company advocates the investment concept of "research creates value", establishes a scientific investment decision-making and risk control system, and has a group of high-quality professionals, forming a professional research system in macroeconomics, industries and listed companies, financial engineering and risk control, which provides a guarantee for achieving excellent investment performance.
As an open-end fund with outstanding characteristics and obvious advantages, Huaxia Return Fund has reason to live up to expectations and repay investors with excellent performance.