abstract

Whether it is a closed-end fund or an open-end fund; Regardless of active management or passive management, Huaxia Fund Management Company has achieved good results.

If we simply look at this fund, it is actually an open-end fund. An open-end fund with a closed period of one year.

Part I Product Introduction

Fund Name: Huaxia Fuxing Stock Fund

Sales outlets: china galaxy Securities, etc.

Registration and settlement institution: Huaxia Fund Management Company

Custody Bank: Agricultural Bank of China

Issue date: September 5 to September 2, 20071.

Subscription rate:

Subscription amount (including subscription fee)

Subscription rate

1 less than 10,000 yuan 1.2%

1 10,000 yuan or more (including 1 10,000 yuan)-0.9% below 5 million yuan

More than 5 million yuan (including 5 million yuan)-/kloc-0.6% below 0/100 million yuan

100000 yuan (including100000 yuan)1000 yuan each.

Issuance scale: The approved issuance scale of the Fund is 5 billion copies. If more than 5 billion valid subscription applications are accepted during the recruitment period, the "doomsday proportional placement" will be adopted.

Redemption rate: 0.5%

Management ratio: 1.5%

Operation mode: The Fund operates as a closed-end fund within one year from the effective date of the fund contract, as an open-end fund from the closed date, and is open for subscription and redemption within 1 month after closing.

Investment objective: adhering to the idea of long-term investment and selecting individual stocks, we will examine the growth prospects of China's economy, industries and individual stocks from a long-term and global perspective, focus on the two basic evaluation dimensions of the company's external environment and internal quality, build a high-quality investment portfolio through a multi-layer screening mechanism, pursue the continuous appreciation of fund assets, and strive to create excess returns for investors.

Investment concept: Adhering to the long-term investment concept, we will examine the growth prospects of China's economy, industries and individual stocks from a long-term and global perspective, and fully share the development achievements of China's sustained economic growth, increasingly improved securities market and significantly improved company quality. With the deepening of market economic system reform, China's economy has entered a new stage of development, showing a good momentum of sustained and steady growth. At the same time, various systems in the securities market have been continuously improved, investment tools have been increasingly enriched, the quality and governance structure of domestic listed companies have been significantly improved, the ranks of institutional investors have gradually expanded, and the investment concept has changed to the direction of value investment. Under the above background, long-term investment has gradually become the most effective investment method, which can obtain stable investment income on the basis of effectively reducing investment risks. Sticking to the idea of stock selection and building a high-quality portfolio through an all-round and multi-level stock selection mechanism can create excess returns for investors. Due to the influence of the securities market system, information transmission mechanism, information search cost and other factors, the securities market is not completely effective, especially for the China securities market, which is currently in the development stage. In view of the characteristics of incomplete market efficiency, with the help of the company's powerful investment and research platform, efficient investment team and diversified external information channels, through professional research and active management, the temporary deviation between the market price and intrinsic value of individual stocks can be effectively utilized to seize investment opportunities and obtain excess returns.

Asset allocation ratio: (1) During the fund's closed period, the proportion of stock investment in the fund's assets is 60% to 100%, the proportion of asset-backed securities investment in the fund's net asset value is 0% to 20%, and the proportion of warrant investment in the fund's net asset value is 0% to 3%. (2) After the closure period expires, the proportion of stock investment in the fund's assets is 60% to 95%, the proportion of asset-backed securities investment in the fund's net asset value is 0% to 20%, the proportion of warrant investment in the fund's net asset value is 0% to 3%, and the cash and government bonds with maturity within one year are not less than 5% of the fund's net asset value.

Asset allocation strategy: The Fund adopts a "top-down" multi-factor analysis decision support system, which integrates qualitative analysis and quantitative analysis. According to the judgment of the global economic development situation and China's economic development trend (including macroeconomic operation cycle, fiscal and monetary policies, capital supply and demand, and the valuation level of the securities market, etc.), we make a reasonable prediction on the risk-return characteristics of the future stock market and bond market. So as to determine the investment proportion of fund assets in three categories of assets: stocks, bonds and cash, and adjust the investment proportion of stocks, bonds and money market instruments in a timely and dynamic manner with the relative changes of risk-return characteristics of various assets, so as to avoid or control market risks and improve the fund income level.

Stock investment strategy: Starting from the long-term law of economic growth and the global perspective, the Fund adopts a value-based investment strategy to select stocks with long-term competitiveness, steady growth and expected valuation below the market or industry average, as well as stocks that have passed the fundamental inflection point and expected valuation below their long-term average.

Time limit for opening positions: within 6 months after the fund contract takes effect, make the proportion of the fund's investment portfolio conform to the agreement of the fund contract.

Performance benchmark: Shanghai and Shenzhen 300 (5360.333, -58.84,-1.09%) index yield ×80%+ Shanghai Stock Exchange government bond index yield ×20%.

Risk-return characteristics: This fund is a stock fund, with higher risk than money market funds, bond funds and hybrid funds, and belongs to a high-risk and high-return variety.

Fund Manager: Mr. Tong Ting: Master of Economics, graduate department, Head Office of China People's Bank, with 6 years of securities experience. He has been an industry researcher, strategy researcher and assistant fund manager of southern fund Management Co., Ltd., and joined Huaxia Fund Management Co., Ltd. in 2007. He is currently the fund manager of Xinghe Securities Investment Fund (since April 2007).

Income distribution policy: (1) During the closed period of the Fund, the annual income distribution shall not be less than 1 time, and the annual income distribution shall be completed within four months after the end of the fiscal year of the Fund, and the annual income distribution ratio shall not be less than 90% of the annual distributable income of the Fund. The fund contract shall not be distributed before six months. (2) After the fund is closed, the annual income distribution shall not exceed 4 times, and the income distribution ratio of the fund shall not be less than 20% of the distributable income that meets the above-mentioned fund dividend conditions. (3) The closed period of the Fund adopts cash dividends. (4) After the closure period expires, the fund share holders can choose cash dividend or dividend reinvestment. If dividend reinvestment is selected, dividend funds will be converted into corresponding fund shares according to the net value of fund shares on the dividend payment date; If the fund share holder does not choose the income distribution method, it defaults to the cash dividend method.

The above contents are extracted from the prospectus and issuance announcement of the Fund.

The second part is comprehensive analysis.

(1) company background

Huaxia Fund Management Co., Ltd. was established on April 9 1998. It is not only a domestic fund management company, but also one of the old 10 fund management companies. The registered capital of the company is1380,000 yuan, and its office is in Beijing. The shareholding structure of the company is: CITIC Securities (87.05, -3.95, -4.34%) Co., Ltd., with a shareholding ratio of 60.725%; Southwest Securities Co., Ltd., holding 35.725%; China Science and Technology Securities Co., Ltd., 3.55%. Huaxia Fund Management Company is one of the relatively stable fund management companies in the current market since its establishment, which provides a good foundation for the company to have a stable investment and operation environment.

Table 1: List of annual stock investment management capabilities of Huaxia Fund Management Company.

Annual serial number

Rank position

Secondary

Number of funds

Regular stock investment

Weighted average yield

Participate in ranking

Number of companies

1999 4 1 4 1.45% 5

2000 9 2 53.47% 10

200 1 1 3 -7.7 1% 10

2002 1 5 -8.56% 13

2003 6 6 26.90% 17

2004 1 1 7 -2. 15% 23

2005 24 8 -0.05% 33

2006 20 8 138. 18% 45

Source: (1) Fund Research Center of china galaxy Securities Co., Ltd. (2) Deadline for statistics: February 65438+3 1 2006. (3) See china securities journal, April 2007, 18.

Table 2: Summary of Fund Performance of Huaxia Fund Management Company

Source: (1) Fund Research Center of china galaxy Securities Co., Ltd. (2) Deadline for statistics: August 3, 20071day (china securities journal, September 3, 2007).

Since its establishment, the company's stock investment management ability has undergone great changes. At first, it was in a backward position in the market, and then it led for two consecutive years. After that, it experienced a certain degree of decline and is currently in the process of the second round of rising cycle. As an established company, this company has established a relatively complete fund product line, including three closed-end funds, 13 open-end funds, 1 Asian bond funds and various national social security fund portfolios. From low-risk funds to high-risk funds, from publicly raised funds to private equity funds serving specific customers, this company's funds can meet the various needs of various investors and are domestic managed funds.

Whether it is a closed-end fund or an open-end fund; Whether active or passive management, the company has achieved good results. As of August 3, 2007, the net growth rate of Xinghua in closed-end funds has reached 1024.34%. Among the open-end funds, the net growth rate of Huaxia market has reached 200.63% this year and 306.64% in the past year, both of which are far ahead of the market.

(2) New product analysis

According to the rules of fund classification system of china galaxy Securities Fund Research Center, Huaxia Fuxing Fund belongs to stock funds in the first category, stock funds in the second category and standard stock funds in the third category. Stock fund is the most popular fund in the current fund issuance market. For the revival of China, we can understand it from the following five aspects:

1. The Fund operates in two stages, namely, "The Fund operates as a closed-end fund within one year from the effective date of the fund contract, and as an open-end fund from the closed date, and the subscription and redemption will be open within 1 month after the closed period expires". If we simply look at this fund, it is actually an open-end fund. In the past, the subscription and redemption period of open-end funds was usually within three months after the fund contract came into effect, but this fund is an open-end fund with the closed period extended to one year, which belongs to the same type as the dividend stock fund of ICBC Credit Suisse Bank issued in the previous period, that is, although it is called an innovative closed-end fund, it is actually an open-end fund.

Second, in the one-year closed operation stage of the Fund, its stock investment position can be as high as 100%, that is, in theory, all the funds can be invested in the stock market. When the current stock market is bullish, such an investment strategy may create more generous returns for investors. At the same time, on the one hand, due to the good performance of innovative closed-end funds before, and on the other hand, due to the remarkable performance of funds under Huaxia Fund Management Company this year, the issuance of this fund can bring rich imagination to investors and provide an investment opportunity that is expected to get rich returns.

Third, there is another noteworthy aspect of this fund, that is, its fundraising scale is only 5 billion. Compared with other funds' previous raising targets of 654.38+0 billion shares and 654.38+0.5 billion shares, this fund's appetite is only half and one third of other funds. The emergence of this situation is not that Huaxia Fund Management Company has no boldness of vision, but actually shows that the company has a long-term development strategy: starting from the scale of 5 billion, the fund will be in an optimal operation state from the beginning of operation, unlike a large group of other new10 billion funds, which will falter in the initial operation. In this way, the fund can grow slowly in the closed period of one year, keep the scale in step with the performance, let the performance shine slowly until it reaches a very high level one year later, and then conquer investors with irrefutable performance when opening the subscription.

Fourth, from the investment design of products, this fund is not complicated. The Fund believes that (1) adhering to the long-term investment concept and examining the growth prospects of China's economy, industries and individual stocks from a long-term and global perspective can fully share the development achievements of China's sustained economic growth, increasingly perfect securities market and remarkable improvement of company quality. With the deepening of market economic system reform, China's economy has entered a new stage of development, showing a good momentum of sustained and steady growth. At the same time, various systems in the securities market have been continuously improved, investment tools have been increasingly enriched, the quality and governance structure of domestic listed companies have been significantly improved, the ranks of institutional investors have gradually expanded, and the investment concept has changed to the direction of value investment. Under the above background, long-term investment has gradually become the most effective investment method, which can obtain stable investment income on the basis of effectively reducing investment risks. (2) Sticking to the idea of stock selection and building a high-quality portfolio through an all-round and multi-level stock selection mechanism can create excess returns for investors. Due to the influence of the securities market system, information transmission mechanism, information search cost and other factors, the securities market is not completely effective, especially for the China securities market, which is currently in the development stage. In view of the characteristics of incomplete market efficiency, with the help of the company's powerful investment and research platform, efficient investment team and diversified external information channels, through professional research and active management, the temporary deviation between the market price and intrinsic value of individual stocks can be effectively utilized to seize investment opportunities and obtain excess returns.

Fifth, from the perspective of product design, this simple design fund can invest in all-market stocks, which is different from the relatively clear investment scope restrictions of funds such as Huaxia Market, Huaxia Bonus and Huaxia Small and Medium-sized Board, and will bring more investment and profit opportunities to this fund. At the same time, the future investment direction of this fund will be biased towards large-cap blue-chip stocks to some extent. After all, large-cap blue-chip stocks represent the backbone of the market and can bring steady returns to investors.

(3) Risk warning

1. This fund mainly invests in the stock market. Due to the high risk of the basic market, the future performance characteristics of the fund will be closely related to the oscillation of the stock market, and the net value of the fund may fluctuate greatly.

2. The redemption fee of the Fund is unified at 0.5%, and there is no setting of decreasing rate with the extension of holding time. Investors who intend to invest in this fund for a long time should pay attention to the slight increase in this cost.

The maximum size of the fund is set at 5 billion shares. Investors who are interested in subscribing to this fund should subscribe in advance.

4. This fund is actually an open-end fund, and the longest closed period is one year. Investors who intend to make short-term investments are not suitable for buying this fund.

The third part is the comprehensive star rating.

According to the comprehensive evaluation system of new fund products of china galaxy Securities Fund Research Center, the comprehensive evaluation results of Huaxia Fuxing Equity Fund are as follows:

Table 2: New Product Star Rating Table

-Evaluate the results of project evaluation.

Basic market expectation of new products

★★★★

charging standards

★★★

Innovation degree

★★★

Fund manager's fund performance (one year)

★★★

Fund performance (two years)

★★★

Fund performance (three years)

★★★

fund manager

not have

Source: (1) china galaxy Securities Fund Research Center; (2) Deadline for statistics: August 3, 20071. (3) The star rating of its fund refers to the data of one-year performance.